GENERAL COMMENTS:
Thursday wasn't a supportive day for the livestock complex. The nearby live cattle contracts were able to post a mild recovery, but the deferred contracts still closed lower as consumer demand remains questionable. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.18 with a weighted average of $110.51 on 7,997 head. July corn is up 1 3/4 cents per bushel and July soybean meal is up $11.30. The Dow Jones Industrial Average is down 236.94 points.
LIVE CATTLE:
Thursday served as a recovery day for the nearby live cattle contracts, but the deferred contracts continued to see their premiums melt away. June live cattle closed steady at $131.50, August live cattle closed $0.32 higher at $132.02 and October live cattle closed $0.07 higher at $138.00. The fourth quarter usually serves as a time when fat cattle prices see a price jump, as supplies of market-ready cattle become thin and consumer support is strong. But with the consumer base in the U.S. showing that they're financially struggling, the premiums in the winter 2022 months have lessened significantly. There was a light movement of trade here and there in Thursday's cash cattle market but largely the week's trade is done with. Throughout the week, Southern live cattle have sold for $136 to $138 and Northern dressed cattle have traded for $223 to $228. Thursday's slaughter is estimated at 125,000 head, 1,000 head more than a week ago and 5,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending May 7, steer averaged 898 pounds (down 3 pounds) and heifers averaged 831 pounds (down 2 pounds).
Beef net sales of 23,300 mt for 2022 were down 18% from the previous week, but up 35% from the prior four-week average. The three largest buyers were Japan (7,900 mt), South Korea (7,400 mt) and China (2,900 mt).
Boxed beef prices closed higher: choice up $1.23 ($261.70) and select up $0.04 ($246.06) with a movement of 86 loads (61.38 loads of choice, 13.73 loads of select, 2.54 loads of trim and 8.79 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. It's looking like the bulk of this week's business is done with and prices most likely won't fluctuate ahead of the week's end.
FEEDER CATTLE:
Nothing fantastic came out of Thursday for the feeder cattle market, as all its contracts closed lower and it watched the premiums in the live cattle market wither away. August feeders closed $0.60 lower at $165.20, September feeders closed $0.55 lower at $167.90 and October feeders closed $0.52 lower at $170.20. Its likely that Friday's trade sees the exact same kind of pressure, as the market isn't overly confident in anything as the economy declines. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week on a run of 2,693 head, a lower tone was noted on steers up to 900 pounds, steers weighing 900 to 1,050 pounds traded $3.00 to $5.00 lower and heifers weighing 800 to 1,000 pounds sold steady to $4.00 cheaper. The CME Feeder Cattle Index for May 18: down $1.59, $153.46.
LEAN HOGS:
After four days of stronger trade, the lean hog complex finally waived its flag and took a breather for the day. Not helping matters was that the fundamental side of the market also closed lower as pork cutouts saw a slight dip and cash prices were softer too. June lean hogs closed $0.80 lower at $105.30, July lean hogs closed $1.55 lower at $106.97 and August lean hogs closed $1.72 lower at $106.12. It wouldn't be surprising to see Friday's market trade mostly steady, as the entire marketplace sees a recession looming. Thursday's slaughter is estimated at 473,000 head - 1,000 head more than a week ago and 6,000 head less than a year ago. Pork cutouts totaled 220.69 loads with 187.25 loads of pork cuts and 33.45 loads of trim. Pork cutouts closed lower: down $0.15, $103.46. The CME Lean Hog Index for May 17: up $0.18, $100.08.
Pork net sales of 24,100 mt for 2022 were down 8% from the previous week, but up 2% from the prior four-week average. The three largest buyers were Mexico (8,400 mt), South Korea (4,300 mt) and Colombia (2,400 mt).
FRIDAY'S CASH HOG CALL: Steady. Even though prices closed lower, the market still saw a considerable volume trade. Given that packers were willing to buy 7,997 head, it wouldn't be surprising to see the exact same theme develop in Friday's market -- sizeable volume, weaker prices.
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