GENERAL COMMENTS:
Once again, the cattle contracts walked hand in hand with traders and saw a higher close by Wednesday's end. Meanwhile, the lean hog market didn't have as much technical success, though packers are still chasing the cash market to ensure that needs are met at the retail counter. Hog prices closed higher on the National Direct Afternoon Hog Report, up $5.73 on 10,000 head with a weighted average of $128.45. July corn is up 5 1/2 cents per bushel and July soybean meal is up $6.80. The Dow Jones Industrial Average is down 265.66 points and NASDAQ is down 33.18 points.
LIVE CATTLE:
The live cattle contracts rallied throughout Wednesday's trade and stormed by the fact that boxed beef prices are lower and relished in the delight that trader support and higher cash cattle prices brought. June live cattle closed $1.07 higher at $122.30, August live cattle closed $1.02 higher at $124.92 and October live cattle closed $1.35 higher at $129.97. There was a little bit of trade throughout Wednesday's hours, and mostly steady prices with the week's trend. Northern dressed cattle this week have sold for $193 to $197, though mostly at $195, which is $4.00 higher. Southern live cattle have traded for $122 to $123, but mostly at $122, which is easily $2.00 higher than last week. Looking to Thursday, the market hopes to find support on the weekly export report and cattle pray that processing speeds stay elevated so that later down the road there aren't backed up supplies to work through. Wednesday's slaughter is estimated at 120,000 head, steady with a week ago and 1,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 6,049 head, of which 889 actually sold, 712 head were scratched from the auction and 4,448 head were listed as unsold, as they did not meet the reserve prices that ranged from $120 to $122.50. Opening prices ranged from $118 to $120, high bids ranged from $119.25 to $122.50. The state-by-state breakdown looks like this: Texas 5,585 total head, with 793 head sold at $121 to $122.50, 678 head were scratched from the auction and 4,114 head went unsold; Kansas 339 total head, with 27 head sold at $119.25, 34 head were scratched from the auction and 27 head went unsold; Oklahoma 125 total head, with 61 head sold at $122, 64 head went unsold.
Boxed beef prices closed lower: choice down $5.26 ($329.17) and select down $8.32 ($289.96) with a movement of 141 loads (76.10 loads of choice, 35.07 loads of select, 21.24 loads of trim and 8.67 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week. Seeing that there has been trade in both the North and the South most likely means that any trade that develops later in the week will be for steady prices.
FEEDER CATTLE:
The corn market traded higher throughout most of the day, but as the day neared closing, the complex lost all its momentum, other than in the spot July contract, and let the complex close lower. Many were worried that the corn market's rally would derail the feeder cattle contracts like it has done in the past, but thankfully the feeder cattle market is stronger this week and closed fully higher. August feeders closed $0.87 higher at $157.70, September feeders closed $1.15 higher at $159.80 and October feeders closed $1.30 higher at $161.32. The market is anxious to see how Superior's Corn Belt Classic fares come Thursday, as the market will see roughly 51,000 head sell and it will be a great showing of how cattle buyers feel about the market moving forward. At Winter Livestock at Dodge City, Kansas, compared to last week, feeder steers weighing 650 to 1,000 pounds sold $4.00 to $6.00 higher. There wasn't a good recent trend to compare on steers weighing 450 to 650 pounds, but a lower trend was noted. Feeder heifers weighing 600 to 800 pounds sold $4.00 to $5.00 higher. Heifers weighing 800 to 850 pounds sold $10.00 higher. Slaughter cows and bulls both sold $2.00 lower. The CME Feeder Cattle Index for June 15: up $0.13, $140.35.
LEAN HOGS:
The lean hog market wasn't blessed with ample support Wednesday, but the market did continue to see strong packer interest in the cash market despite a weaker futures complex. July lean hogs closed $3.00 lower at $115.50, August lean hogs closed $3.00 lower at $111.70 and October lean hogs closed $3.00 lower at $91.02. It may seem odd that packers are continuing to support the cash hog market amid a lower pork cutout prices, all while traders are backing away from the market. But it's important to understand that even though the pork cutout value is regressing from the top it recently made, it was exactly a year ago on June 16, 2020, when pork cutouts closed at $64.67. Wednesday's close is exactly $55.82 higher than what prices were a year ago, so even though prices are waning lower, packers still have phenomenal money to be made at the meat counter and that's why they are working the cash market so vigorously. Pork cutouts total 378.53 loads with 336.57 loads of pork cuts and 41.97 loads of trim. Pork cutout values: down $1.99, $120.52. Wednesday's slaughter is estimated at 483,000 head, 2,000 head less than a week ago and 19,000 head more than a year ago. The CME Lean Hog Index for June 14: up $0.79, $122.68.
THURSDAY'S CASH HOG CALL: Steady to somewhat higher. Packers have too much money on the line to step back from the cash hog market and let production levels slide while demand and prices are high.
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