GENERAL COMMENTS:
Once again, the unpresented demand in the hog market, combined with the market's short supply of market-ready hogs, has allowed the complex to close higher. Unfortunately, the same luck wasn't seen throughout the cattle market as cash cattle trade steady and traders are leery of the cattle contracts. Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.66 with a weighted average of $115.00 on 6,120 head. July corn is up 10 3/4 cents per bushel and July soybean meal is down $3.40. The Dow Jones Industrial Average is down 152.68 points and NASDAQ is down 13.17 points.
LIVE CATTLE:
Watching the live cattle contracts trade was uneventful as the market continues to trade in a back and forth, uncertain manner and traders are extremely cautious about their positions. June live cattle closed $0.67 higher at $117.40, August live cattle closed $0.45 higher at $118.27 and October live cattle closed $0.05 higher at $123.97. The market had high hopes of seeing this week's slaughter post a lofty kill of upward of 670,000 head, but with Monday's slaughter revised lower, it's going to be a tough feat. The cash cattle market continues to trade in a lackadaisical manner as packers buy enough cattle to show interest, but the market hasn't seen any true interest, any true price discovery in a long time. Thus far throughout the week, live cattle have traded for $118 to $120, which is fully steady with last week and dressed cattle have traded for mostly $190 to $191, which is steady as well. Wednesday's slaughter is estimated at 120,000 head, 115,000 head more than a week ago and 4,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 10,170 head, of which 2,772 actually sold, 1,892 head were scratched from the auction and 5,506 head were listed as unsold, as they did not meet the reserve prices that ranged from $118 to $120. Opening prices ranged from $115 to $119, high bids ranged from $116 to $120. The state-by-state breakdown looks like this: Texas 9,954 total head, with 2,772 head sold at $116-$120, 1,853 head were scratched from the auction, and 5,329 head went unsold; Kansas 216 total head, with 39 head scratched from the auction and rest 177 head went unsold.
Boxed beef prices closed higher: choice up $0.04 ($338.65) and select up $1.69 ($307.87) with a movement of 102 loads (64.66 loads of choice, 16.71 loads of select, 11.63 loads of trim and 9.20 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. With trade having been reported in both the North and the South, Thursday's business will most likely be steady and minimal in its volume.
FEEDER CATTLE:
The corn market was finicky throughout the day, trading both higher and lower ahead of Thursday's WASDE report, but by the day's close, the corn market hailed higher, which sent feeders lower. August feeders closed $0.97 lower at $148.27, September feeders closed $1.20 lower at $150.75 and October feeders closed $1.32 lower at $152.92. It's been interesting to watch the feeder cattle market over the last week and see what weights are beckoning buyers' attention. In regions where rain has recently passed through, some sales are seeing fairly strong interest. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 875 to 950 pounds sold $3.00 to $4.00 higher. Steer weighing 500 to 875 pounds sold $3.00 to $4.00 pounds lower. Feeder heifers weighing 400 to 850 pounds sold steady to $3.00 higher. Slaughter cows sold steady and slaughter bulls sold $5.00 higher. The CME Feeder Cattle Index for June 8: down $0.08, $140.04.
LEAN HOGS:
Lean hog futures gave into the market's robust fundamental performance despite worrying about how much more upside there is to the technical side and ultimately ended up closing higher. June lean hogs closed $1.25 higher at $121.95, July lean hogs closed $0.30 lower at $121.50 and August lean hogs closed $0.07 higher at $118.75. The cash hog market continues to surprise us all as packers are hunting for supplies and willing to pay shiny prices to keep a comfortable inventory. Pork cutouts totaled 262.73 loads with 224.86 loads of pork cuts and 37.87 loads of trim. Pork cutout: down $0.56, $134.38. Wednesday's slaughter is estimated at 485,000 head, 46,000 head more than a week ago and 37,000 head more than a year ago. The hog market obviously hopes to see china as one of the biggest buyers in Thursday's export report, but with supplies as thin as they are, keeping the nation's domestic coolers filled is a high priority as well. The CME Lean Hog Index for June 7: up $1.26, $117.77.
THURSDAY'S CASH HOG CALL: Steady to somewhat higher. Supplies of market=ready hogs are exceptionally thin, and in order to keep processing speeds running at desired levels, packers are going to have to keep supporting the cash market.
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