GENERAL COMMENTS:
It was a mixed day for the livestock complex. The lean hog market saw substantial gains throughout its contracts, but the live cattle and feeder cattle contracts can't say the same. Given that Monday is a holiday, the market is expecting a quiet Friday ahead of the long weekend. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.27 with a weighted average of $111.35 on 7,515 head. July corn is down 7 1/4 cents per bushel and July soybean meal is up $4.00. The Dow Jones Industrial Average is up 516.91 points.
LIVE CATTLE:
From a technical sense Thursday, the market traded about as steady as it could. The nearby contracts closed the day with minor advancements while the deferred contracts closed just slightly lower. With corn prices being as expensive as they are, feeders are having a hard time justifying the cost of gains these cattle will take with what the board is portraying fats will be in the months ahead. June live cattle closed $0.10 higher at $132.40, August live cattle closed $0.07 higher at $132.60 and October live cattle closed $0.02 lower at $138.17. The cash cattle market saw a little more trade develop but it's looking like the bulk of this week's business is done with and that packers aren't going to buy many cattle this week. So far this week, Southern live business has been marked at mostly $137, $1 lower than last week's weighted averages. Northern dressed deals were at mostly $223, generally $3 lower than last week's weighted averages basis Nebraska. Thursday's slaughter is estimated at 124,000 head, 1,000 head less than a week ago and 3,000 head more than a year ago.
Thursday's actual slaughter data shared that for the week ending steers averaged 891 pounds (down 7 pounds from the week before, and 3 pounds less than a year ago) and heifers averaged 821 pounds (down 10 pounds from the previous week, and 2 pounds less than a year ago).
Beef net sales of 20,000 mt for 2022 were down 14% from the previous week, but up 3% from the prior four-week average. The three largest buyers were Japan (8,400 mt), South Korea (3,900 mt) and China (2,500 mt).
Boxed beef prices closed higher: choice up $1.04 ($263.97) and select up $0.37 ($244.43) with a movement of 134 loads (75.20 loads of choice, 19.67 loads of select, 12.64 loads of trim and 26.51 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Any more cattle that do trade will like be at steady money with the week's trend.
FEEDER CATTLE:
It was a depressing day for the feeder cattle contracts as the thinly traded market couldn't seem to must any support ahead of the day's close. August feeders closed $1.27 lower at $166.67, September feeders closed $1.32 lower at $169.72 and October feeders closed $1.10 lower at $172.55. The corn market wasn't to blame for Thursday's weaker tone as it too closed lower, but instead the market traded softer as traders watched the premiums in the deferred live cattle contracts fade away once again. Thankfully, sales throughout the countryside carried on with their business and saw excellent demand for heavier weighted feeders. At Winter Livestock Auction in Pratt, Kansas, on a run of 2,153 head, compared to last week, feeder steers weighing 650 to 950 pounds traded $8.00 to $12.00 higher. Feeder heifers weighing 750 to 950 pounds traded $2.00 to $4.00 higher. Heifers weighing 600 to 750 pounds sold $3.00 to $4.00 weaker. The CME Feeder Cattle Index for May 25: up $0.45, $153.80.
LEAN HOGS:
It was a dynamite day for the lean hog complex. First, the market opened Thursday's export data and was surprised to see a bullish report where sales were up big, and China was even an active buyer. From there, the contracts jumped $2.00 to $3.00 higher in the nearby months, while the deferred months followed closely behind. Heading into the afternoon, the market was hoping and praying that follow-through consumer support would be noted in the day's pork cutout report, and indeed it was with a $1.06 increase from Wednesday's value thanks to the $3.31 increase in hams, the $3.04 increase in butts and a $2.05 increase in bellies. Pork cutouts total 233.51 loads with 211.20 loads of pork cuts and 22.31 loads of trim. Pork cutout values: up $1.06, $108.13. Thursday's slaughter is estimated at 475,000 head, 2,000 head more than a week ago and 8,000 head less than a year ago. Wednesday's hog slaughter was revised to 472,000 head, which is 6,000 head more than what was originally stated. The CME Lean Hog Index for May 24: up $0.84, $103.87.
Thursday's actual slaughter data shared that for the week ending live hog weights averaged 291 pounds (down 2 pounds from the week before) and dressed hog weights averaged 218 pounds (down 1 pound from the previous week).
Pork net sales of 36,700 mt for 2022 were up 52% from the previous week and 39% from the prior four-week average. The three largest buyers were Mexico (15,100 mt), Canada (5,700 mt) and China (5,300 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that the market is preparing for a long weekend, it's likely that packers pay the cash market little attention ahead of the week and get back to buying hogs come Tuesday.
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