GENERAL COMMENTS:
After Tuesday's surge, livestock futures have been left high and dry without a stitch of support to be found from traders. Cattle futures are looking for support from the cash cattle market, but thus far packers have distanced themselves from the market and aren't wanting to participate just yet. Meanwhile the lean hog market doesn't have much fundamental support to stand on given Tuesday's double-digit lower pork cutout close. July corn is up 4 cents per bushel and July soybean meal is down $8.00. The Dow Jones Industrial Average is down 21.08 points and NASDAQ is up 21.14 points.
LIVE CATTLE:
Movement in the live cattle market is painful to watch as the speed is slow as molasses. The futures market is having a difficult time finding any support after Tuesday's higher close. Without seeing much interest in the cash cattle market, the complex feels left high and dry not knowing what to do. August live cattle are down $0.75 at $122.42, October live cattle are down $0.50 at $127.87 and December live cattle are down $1.12 at $131.25. The countryside is seeing bids pop up of $197 to $202 in parts of Nebraska, but largely the cash cattle market is quiet -- very, very quiet. Asking prices are around $124 in the South and $204 in the North. Trade should begin to develop at any time now.
The Fed Cattle Exchange Auction listed a total of 5,844 head, of which 64 actually sold; 226 were scratched from the auction; 5,554 head were listed as unsold, as they did not meet the reserve prices, which ranged from $118 to $124. Opening prices ranged from $118 to $120, one lot at $90; high bids ranged from $120 to $122. The state-by-state breakdown looks like this: Texas 4,449 total head, all of which went unsold; Kansas 341 total head, with 64 head sold at $122, 170 head went unsold and 107 head were scratched from the auction; Oklahoma 1,054 total head, none of which sold, 935 went head unsold and 119 head were scratched from the auction.
Boxed beef prices are lower: choice down $3.04 ($312.71) and select down $4.93 ($274.82) with a movement of 81 loads (42.92 loads of choice, 20.73 loads of select, 10.77 loads of trim and 6.93 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures aren't performing with the same gusto the market carried earlier in the week. Even with the corn market trading lower in all contracts (other than spot July which is only trading a timid $0.04 higher) the complex can't spring out of the doggish tone that's encompassed Wednesday's trade. But that feeder cattle contracts have made an aggressive rally over the last week, it's not that surprising to see the pause and for traders to want to gauge fundamental support before rallying onward. August feeders are down $1.95 at $156.40, September feeders are down $1.87 at $158.47 and October feeders are down $1.92 at $160.20.
LEAN HOGS:
Its looking like Tuesday's slightly higher close was just a freebie given to the lean hog market as Wednesday's trade is back to its downward nosedive. July lean hogs are down $3.00 at $104.52, August lean hogs are down $3.00 at $100.700 and October lean hogs are down $2.12 at $83.27. With Tuesday's pork cutout coming in at a new record for the biggest loss in one day, the attitude surrounding the lean hog market is fully lower. Now that may seem hard to fathom as cash hog prices are still scaling higher, but that stems from the fact that hog supplies are still thin and packers are having to dive into that market to keep their chain speeds running. With pork cutout prices seeing such an immense amount of pressure, monitoring processing speeds is going to be incredibly important moving forward.
The projected CME Lean Hog Index for 6/22/2021 is down $1.20 at $119.49, and the actual index for 6/21/2021 is up $0.06 at $120.69. Hog prices are higher on the National Direct Morning Hog Report, up $2.60 with a weighted average of $122.94, ranging from $115.00 to $137.50 on 3,605 head and a five-day rolling average of $119.82. Pork cutouts total 206.96 loads with 172.10 loads of pork cuts and 34.87 loads of trim. Pork cutout values: up $2.50, $110.33.
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