GENERAL COMMENTS:
USDA's Acreage report crushed the confidence in the feeder cattle market, but it didn't stir up too much emotion in the live cattle and lean hog markets. There's been a light movement of cash cattle thus far and, unfortunately, it's been for mostly lower prices than a week ago. December corn is up 36 1/2 cents per bushel and December soybean meal is up $24.40. The Dow Jones Industrial Average is up 180.86 points and NASDAQ is down 20.28 points.
LIVE CATTLE:
Live cattle futures are trading mostly higher as seeing packer interest drift into the market is refreshing and midday boxed beef prices are mixed as opposed to fully lower. Yes, packers are bidding on cattle, but it's at lower prices than a week ago! With packers buying less than 50,000 head last week, one would have hoped feedlots would have stuck to their guns this week and made packers pay up after last week's pathetic trade. But packers play a smart, strategic psychological game and they knew feedlots would be chomping at the bit to move cattle ahead of the holiday as some would be worried about carrying them into next week. Thus far there's been a light to moderate trade in the South at $122, which is $2.00 lower than last week, and even some cattle have traded in Nebraska for $122. Bids of $196 to $198 are being offered for dressed cattle in the North. August live cattle are steady at $121.87, October live cattle are up $0.05 at $127.72 and December live cattle are up $0.22 at $132.00.
The Fed Cattle Exchange Auction listed a total of 5,362 head, of which 608 actually sold, 407 head were scratched from the auction and 4,347 head were listed as unsold, as they did not meet the reserve prices which ranged from $95 to $126. Opening prices ranged from $90 to $121, high bids ranged from $119 to $124. The state-by-state breakdown looks like this: Texas 4,391 total head, with 447 head sold at $212.50-$122, 3,572 head went unsold, 372 head were scratched of those 149 head were scratched due to being sold via private treaty at $122; Oklahoma 753 total head, with 51 head sold at $120, 702 head went unsold; Kansas 218 total head, with 110 head sold at $124, 73 head went unsold and 35 head were scratched.
Boxed beef prices are mixed: choice up $0.46 ($292.80) and select down $1.22 ($269.18) with a movement of 85 loads (58.69 loads of choice, 15.96 loads of select, 4.40 loads of trim and 5.78 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts knew Wednesday's USDA Acreage Report could throw a curve ball in the day's trade and it most certainly did. The USDA estimated 92.7 million acres of corn were planted in 2021, which is less than expected but up from the 90.82 million acres a year ago. DTN's Lead Analyst Todd Hultman said, "Overall USDA's plantings estimates are bullish for new-crop corn and new-crop soybeans, but slightly bearish for wheat." Nevertheless, the corn market's rally came at the cost of the feeder cattle contract's rally as feeders are trading $2.00 to $3.00 lower while nearby corn contracts flirt with trading limit higher. Without the countryside having much action to offset the acreage report, the contracts will most likely continue to trade in this doggish manner as the report comes ahead of the slow Fourth of July week. August feeders are down $2.75 at $154.65, September feeders are down $2.42 at $157.37 and October feeders are down $2.32 at $159.25.
LEAN HOGS:
Lean hog futures stuttered into Wednesday's trade initially, but as the day nears the noon hour the contracts are once again growing in confidence. July lean hogs are up $0.65 at $107.62, August lean hogs are up $0.62 at $104.25 and October lean hogs are up $0.80 at $88.60. Wednesday's slaughter is only estimated to be around 462,000 head, which again doesn't bode well for the cash hog market or consumer demand amid a thinly stocked meat counter. Until the market is past the Fourth of July, volatile swings are highly anticipated as the market has to dance around fewer workers being present at plants, traders being out for a long week and little interest in the cash market amid slower chain speeds.
The projected two-day CME Lean Hog Index for 6/29/2021 is down $0.81 at $112.13, and the actual index 6/28/2021 is down $1.12 at $112.94. Hog prices are unavailable on the National Direct Morning Hog Reported due to confidentiality with only 3,415 head being reported. Pork cutouts total 177.03 loads with 151.19 loads of pork cuts and 25.84 loads of trim. Pork cutout values: up $1.02, $115.24.
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