GENERAL COMMENTS:
Friday was recovering day for the lean hog and feeder cattle contracts, but the live cattle market wasn't easily persuaded into thinking the same. The live cattle market has grown concerned about the market's wavering tone of beef demand as feedlots sit with record numbers on feed and the summer low has yet to be established. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $4.89 with a weighted average of $101.47 on 2,867 head. July corn is down 10 1/4 cents per bushel and July soybean meal is up $13.30. The Dow Jones Industrial Average is up 466.36 points.
From Friday to Friday, livestock futures scored the following changes: June live cattle off $0.68, August live cattle off $3.00; May feeder cattle off $1.68, August feeder cattle off $6.67; June lean hogs off $3.35, July lean hogs off $5.85.
LIVE CATTLE:
Even though the spot June contract was able to close slightly higher, the live cattle market still closed with bearish tones as the rest of the contracts closed lower, and with record on feed numbers and wavering boxed beef interest, the upcoming summer months could see starkly lower prices. June live cattle closed $0.42 higher at $132.07, August live cattle closed $0.42 lower at $132.35 and October live cattle closed $0.72 lower at $139.12. The cash cattle market didn't see much interest following the last three weeks when over 100,000 head traded each week in the cash market. Throughout the week, Southern live cattle traded steady at $140, and Northern dressed cattle sold $0.50 cheaper at $230.
Friday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 4,000 head more than a year ago. Saturday's slaughter is projected to be 42,000 head, 7,000 head less than a week ago and 21,000 head less than a year ago. This week's slaughter is estimated at 657,000 head, steady with a week ago and 13,000 head more than a week ago.
Boxed beef prices closed mixed: choice up $1.75 ($258.95) and select down $0.46 ($243.90) with a movement of 92 loads (51.29 loads of choice, 19.60 loads of select, 13.53 loads of trim and 7.54 loads of ground beef). Throughout the week choice cuts averaged $256.95 (down $1.34 from last week) and select cuts averaged $243.18 (down $3.64 from last week) and the total movement of cuts, grinds and trim totaled 746 loads.
MONDAY'S CASH CATTLE CALL: Lower. As packers strategically bought cattle over the last month with time, it's unlikely that they show the cash market much support in the weeks ahead.
FEEDER CATTLE:
The feeder cattle contracts shot higher as the corn market rounded out the week $0.10 to $0.19 lower in its nearby contracts, and after a week of steep losses, thanks to the corn market's advancement, feeders were ready to charge higher as the corn market's expense. May feeders closed $1.00 higher at $157.87, August feeders closed $1.50 higher at $168.02 and September feeders closed $1.00 higher at $170.67. Looking ahead to what next week may bring, the feeder cattle market is going to watch the corn sector again closely, as any uptick in price, regardless the size, is bothersome to the market when all feed prices are as high as they are. Oklahoma's Weekly Cattle Auction Summary shared that, compared to last week, throughout the state, feeder steers and heifers traded steady to $2.00 lower. Demand was touch and go for feeder cattle throughout the week as the corn complex moved higher. Demand continues to be strong for heavier weighted cattle as it's cheaper to buy them bigger than buy them and try to put the pounds on them. Steer calves sold steady to $3.00 lower and heifer calves traded steady to $3.00 higher. The CME Feeder Cattle Index for May 12: down $0.25, $156.36.
LEAN HOGS:
The lean hog complex jumped to Friday's willingness to trade higher and walked away with over a $3.00 advancement in its nearby contracts and a minor $0.30 advancement in the deferred contracts. Thursday's WASDE report was eye opening for the market as no one can deny that supplies are going to begin to build, and with questionable consumer demand, the market is sweating the difference. June lean hogs closed $3.27 higher at $100.75, July lean hogs closed $3.35 higher at $101.20 and August lean hogs closed $2.47 higher at $101.45. Pork cutouts did close higher as bellies helped pull the average up with its $13.17 gain on the day. Pork cutouts totaled 309.01 loads with 280.86 loads of pork cuts and 28.15 loads of trim. Pork cutout values: up $2.57, $101.17. Friday's slaughter is estimated at 438,000 head, 6,000 head less than a week ago and 24,000 head less than a year ago. Saturday's kill is projected to be around 48,000 head. Thursday's slaughter was revised to 472,000 head, 5,000 head less than what was originally stated. The CME Lean Hog Index for May 11: down $0.22, $101.04.
MONDAY'S CASH HOG CALL: Steady to somewhat higher. Given that packers have been doing their buying in the beginning half of the week, it's likely that the cash market could see sizeable interest come Monday.
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