GENERAL COMMENTS:
Lean hog futures would love to continue their upward quest, but convincing traders there's more upside to the market has been a challenge throughout Wednesday morning. Meanwhile, cattle futures are skeptical of their trajectory and the market obviously shows it, given its back-and-forth trade. July corn is up 7 3/4 cents per bushel and July soybean meal is down $4.40. The Dow Jones Industrial Average is down 52.23 points and NASDAQ is up 37.57 points.
LIVE CATTLE:
Live cattle futures are mixed in nearby contracts while the deferred contracts face losses upwards of $1.00. June live cattle are up $0.20 at $116.92, August live cattle are up $0.02 at $117.85 and October live cattle are down $0.32 at $123.60. The market's biggest underlying signal is that of uncertainty. Producers pray processing lines see faster speeds in June, but don't know if that will realistically happen or not amid labor challenges. The cash cattle market knows its fate is unfriendly as soon as boxed beef prices top. Pinpointing exactly when boxed beef prices will top continues to challenge the market -- but most agree it will be sooner rather than later. There's been a light movement of trade again Wednesday morning in the South at $120, which is fully steady with last week's business.
The Fed Cattle Exchange Auction listed a total of 10,170 head; 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, which 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; 2,772 head sold at $116-$120; 1,853 head scratched from the auction; and 5,329 head went unsold. Kansas 216 total head; 39 head scratched from the auction; and 177 head went unsold.
Boxed beef prices are higher: choice up $0.88 ($339.49) and select up $1.82 ($308.00) with a movement of 65 loads (41.40 loads of choice, 11.25 loads of select, 8.77 loads of trim and 3.62 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are struggling as the market again neglects to find any essence of support from the live cattle market. Oddly enough, one would think the corn market's lower trend would add some gusto to feeders' sail, but it hasn't happened, thus far anyway. August feeder cattle are down $1.57 at $147.67, September feeders are down $1.62 at $150.32 and October feeders are down $1.60 at $152.65. Technical pressures aren't a concern at this point for the market as the spot August contract is trading well below the 100-day moving average, and also below the 40-day moving average. The fact that cash cattle are selling for basically steady prices for the seventh week in a row could be adding dreary pressures to the market.
LEAN HOGS:
Lean hog futures want to trade higher, but are having a hard time convincing traders there's more upside to be had in this market. June lean hogs are up $0.80 at $121.50, July lean hogs are down $0.60 at $121.20 and August lean hogs are down $0.37 at $118.32. The biggest supporting factor producers have on their side is the industry is tight for supplies. With that being said, it is vital to continue to watch processing speeds as producers need sufficient throughput in order to keep this level of currentness -- not to mention consumers desperately want the product!
The projected CME Lean Hog Index for 6/8/2021 is up $0.94 at $118.71, and the actual index for 6/7/2021 is up $1.26 at $117.77. Hog prices are unavailable on the National Direct Morning Hog Report given packer submission problems. Pork cutouts total 164.27 loads with 139.49 loads of pork cuts and 24.78 loads of trim. Pork cutout values: up $0.12, $135.06.
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