GENERAL COMMENTS:
It was a good day for the lean hog complex as pork cutout values finally found support and the board worked its way higher again. The cattle contracts have stalled out and seem to be facing some resistance, which is limiting their upward abilities. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $4.90 with a weighted average of $103.57 on 4,596 head. July corn is up 3 1/4 cents per bushel and July soybean meal is up $1.70. The Dow Jones Industrial Average is down 1,063.09 points.
LIVE CATTLE:
Watching boxed beef prices has been interesting, as inflation is undeniably putting the kibosh to higher beef prices. As consumers make summer plans and drag out their grills, it's evident that buyers are being conscience about the price they're paying at the store. Choice cuts took a digger in Thursday's market as they fell $4.56 from Wednesday's prices which thinned the choice/select spread to now sit at $9.37. The board was pressured throughout most of Thursday's trade and closed fully lower. June live cattle closed $1.05 lower at $133.77, August live cattle closed $1.05 lower at $136.02 and October live cattle closed $1.10 lower at $143.40. The cash cattle market didn't see much interest, and of the trade that did develop, prices remained steady with the week's average. Throughout the week live cattle have traded for mostly $140 and dressed cattle have traded for mostly $232, both fully steady with last week's prices.
Beef net sales of 14,600 mt for 2022 were up 28% from the previous week and 1% from the prior four-week average. The three largest buyers were Japan (4,100 mt), South Korea (3,200 mt) and Taiwan (1,800 mt).
Thursday's actual slaughter data shared that for the week ending April 23, steers averaged 906 (down 3 pounds from the week before) and heifers averaged 837 pounds (up 2 pounds).
Boxed beef prices closed lower: choice down $4.56 ($255.18) and select down $1.87 ($245.81) with a movement of 159 loads (100.27 loads of choice, 25.80 loads of select, 9.42 loads of trim and 23.71 loads of ground beef). The choice/select spread now sits at $9.37.
FRIDAY'S CASH CATTLE CALL: Steady. Given that packers have bought close to 100,000 head again this week, prices will likely remain steady as the week's trend is established.
FEEDER CATTLE:
As the corn market grew stronger throughout the day, the feeder cattle contracts solidified their descend through Thursday's afternoon. The nearby corn contracts were able to regain $0.03 to $0.05, and that was just enough to push the nearby feeder cattle contracts to trade with losses greater than $1.00. May feeders closed $1.92 lower at $160.32, August feeders closed $1.82 lower at $174.37 and September feeders closed $1.20 lower at $177.45. Sales are still relatively thin throughout the countryside as new spring born calves aren't being met with much interest and the yearlings that the market would like to see have largely already worked their way through sale barns. The CME Feeder Cattle Index for May 4: down $0.16, $155.59.
LEAN HOGS:
It was another prosperous day for the lean hog complex as the market traded $1.00 to $2.00 stronger and pork cutouts rounded out the day higher too. June lean hogs closed $1.97 higher at $107.07, July lean hogs closed $2.37 higher at $109.42 and August lean hogs closed $2.27 higher at $109.15. It's been a while since the pork cutout values has closed higher and l that's what packers have been yearning for as they hope to move more product. The pork cutout value was able to close higher as the rib, ham and belly helped push prices higher while the loin and butt tried pulling the average lower. In the days head packers will be closely watching pork prices as they need consumers to show consistent interest in the product to deem higher cash prices appropriate. Pork cutouts totaled 265.43 loads with 238.22 loads of pork cuts and 27.21 loads of trim. Pork cutout values: up $2.44, $106.27. Thursday's slaughter is estimated at 478,000 head, 2,000 head more than a week ago and 1,000 head less than a year ago. The CME Lean Hog Index for May 3: down $0.11, $101.04.
Thursday's actual slaughter data shared that for the week ending April 23 live hogs averaged 293 pounds (up 1 pound from the week before) and dressed weights averaged 218 pounds (steady with the previous week). Pork net sales of 23,800 mt for 2022 were down 24% from the previous week and 13% from the prior four-week average. The three largest buyers were Mexico (11,300 mt), South Korea (3,700 mt) and Japan (3,400 mt).
FRIDAY'S CASH HOG CALL: Steady to somewhat lower. Give the sheer volume of hogs that pacers have picked up this week, I don't foresee packers being wildly aggressive in Friday's market.
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