GENERAL COMMENTS:
The market hasn't changed much from Tuesday as the cattle contracts continue to rally higher and the lean hog market continues to veer lower. But what has been interesting is watching the market's confidence in the cattle rally grow throughout the week. Even with corn prices trending higher, the feeder cattle contracts are standing firm in their rally and cattlemen hope this positive roll is seen in this week's Superior sale. July corn is up 11 1/2 cents per bushel and July soybean meal is up $9.20. The Dow Jones Industrial Average is down 66.53 points and NASDAQ is down 22.79 points.
LIVE CATTLE:
Live cattle futures have broken out and are taking Wednesday by charge as traders are willing to invest and the higher prices seen throughout the cash market are invigorating the surge. June live cattle are up $1.07 at $122.30, August live cattle are up $1.27 at $125.17 and October live cattle are up $1.15 at $129.77. This rally comes at a perplexing time as the boxed beef market is veering lower. But its momentum is so strong that a number of the contracts have made new contract highs. As we mentioned before, it will be vital for the long-term health of the cattle market to see vigorous processing speeds throughout the entire month of June. If the market can kick production into high gear and far surpass what it's been doing as of late, then optimism could continue to build. There's been a light trade of cattle in parts of Nebraska for $124 live and $195 dressed, along with some cattle in Kansas for $122 live.
The Fed Cattle Exchange Auction listed a total of 6,049 head; 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, which 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 are lower: choice down $2.92 ($331.51) and select down $6.56 ($291.72) with a movement of 92 loads (47.82 loads of choice, 20.12 loads of select, 17.11 loads of trim and 6.93 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market is serious about its rally this week and is rallying despite the corn market's strength which has come with Wednesday's favorable weather for this year's corn crop. Cow-calf producers are praying the market's strength is able to sustain throughout the end of the week and can encourage the large feeder cattle sales to push for higher prices. Feedlots, more than anything, want input costs to become more manageable as selling cattle at $120 to $122 amid $6.00 corn isn't a winning equation. August feeders are up $0.72 at $157.55, September feeders are up $0.85 at $159.50 and October feeders are up $0.87 at $160.90.
LEAN HOGS:
The pressure continues to build in the lean hog market as the market endures losses of $2.00 to $3.00 in its nearby contracts. With the regression seen over the last six days in the afternoon pork cutout value, traders aren't willing to rally the complex amid weaker demand. July lean hogs are down $3.00 at $115.50, August lean hogs are down $3.00 at $111.70 and October lean hogs are down $3.00 at $91.02. Seeing the market trade lower isn't something we've seen in quite some time; but understanding that prices eventually top and supplies are still thin needs to be stressed as the market isn't battling an overabundance of hogs by any means.
The projected CME Lean Hog Index for 6/15/2021 is down $0.07 at $122.59 and the actual index for 6/14/2021 is up $0.75 at $122.66. Hog prices are higher on the National Direct Morning Hog Report, up $0.76 with a weighted average of $122.14, ranging from $113.09 to $136.00 on 5,320 head and a five-day rolling average of $117.20. Pork cutouts total 219.23 loads with 197.37 loads of pork cuts and 21.85 loads of trim. Pork cutout values: up $2.11, $124.62.
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