GENERAL COMMENTS:
Heading into Thursday, all eyes will be on the hog market to see if it can keep with Wednesday's bullish tone. The cash cattle market saw trade develop throughout Wednesday in both the North and South and in heading to Thursday trade is expected to keep with the week's trend. Hogs were higher on the Daily Direct Afternoon Hog Report, up $8.34 with a weighted average of $108.47 on 17,691 head. July corn is up 1 1/4 cents per bushel and July soybean meal is down $5.70. The Dow Jones Industrial Average is up 932.27 points.
LIVE CATTLE:
It was a mixed day for the live cattle complex as the futures market closed with the nearby contract lower and the deferred higher, and the cash cattle market traded cattle at steady money with last week's business, but some of the cattle were committed for the end of the month. June live cattle closed $0.50 lower at $134.82, August live cattle closed $0.25 lower at $137.07 and October live cattle closed $0.02 lower at $144.50. The market continues to trade in a sideways chopping manner as the market balances the constrains of resistant/support levels and a teetering cash market. Northern dressed cattle sold for mostly $232, and Southern live cattle sold for mostly $140 -- both of which are steady with last week's business. Of the cattle that sold in the North some are committed for next week's delivery, and others are committed for the weeks of May 16 and May 23, which again is a move made by packers to strategically manage their inventory and keep them from having to dive into the cash market in the weeks ahead.
Wednesday's slaughter is estimated at 126,000 head, 1,000 head more than a week ago and 7,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 3,013 head, of which 530 actually sold, none were scratched from the auction and 2,483 head were listed as unsold, as they did not meet the reserve prices that ranged from $136 to $148. Opening prices ranged from $134 to $144, high bids ranged from $135 to $146.25. The state-by-state breakdown looks like this: Texas 2,131 total head, of which none actually sold; Iowa 882 total head, with 530 head sold at $146.25, 352 head went unsold.
Boxed beef prices closed higher: choice up $0.19 ($259.74) and select up $0.34 ($247.68) with a movement of 131 loads (71.20 loads of choice, 20.88 loads of select, 9.68 loads of trim and 29.44 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions its likely that the rest of the week's trade holds steady with the market's set tone.
FEEDER CATTLE:
The feeder cattle complex kept its eyes glued to the corn market for all of Wednesday's trade, ready to jump in either direction if the corn market took off and ran higher or if it jolted lower. By Wednesday's end, the corn market closed steady to $0.02 higher, which kept the nearby feeder cattle contracts depressed but allowed for the deferred months to accomplish a mild rally ahead of the day's close. May feeders closed $0.15 lower at $162.25, August feeders closed $0.07 lower at $176.20 and September feeders closed $0.30 higher at $178.65. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, on a run of 2,433 head feeder steers weighing 700 to 950 pounds traded $2.00 to $3.00 higher and steer calves weighing 500 to 700 pounds traded $8.00 to $9.00 higher. Feeder heifers weighing 700 to 925 pounds traded $2.00 to $4.00 stronger, and heifer calves weighing 500 to 700 pounds traded $4.00 to $6.00 lower. The CME Feeder Cattle Index for May 3: down $0.02, $155.75.
LEAN HOGS:
If you didn't see anything else about the hog market, make sure that you caught that cash prices jumped $8.34 Wednesday afternoon and that 17,691 head traded. It was a dynamic day for lean hog market as the futures market finally found support after trading painfully lower for most of last week and during the first part of this week as well. June lean hogs closed $2.90 higher at $105.10, July lean hogs closed $3.20 higher at $107.05 and August lean hogs closed $2.52 higher at $106.87. Pork cutout values weren't the reason for the market's drastic turn of events, as prices still closed lower. It appears that, as the market traded down to levels not seen since January, traders finally became comfortable with the market's price point given that market ready supplies are indeed thin. Pork cutouts totaled 243.70 loads with 214.72 loads of pork cuts and 29.98 loads of trim. Pork cutout values: down $1.73, $103.83. Wednesday's slaughter is estimated at 482,000 head, steady with a week ago and 3,000 head less than a year ago. The CME Lean Hog Index for May 2: down $0.44, $101.15.
THURSDAY'S CASH HOG CALL: Lower. I'm truly baffled by Wednesday's cash hog performance: $8.00 higher is one thing, but seeing 17,691 head trade in a single day? That's rare. With that being said, it's like that Thursday's cash market trades lower as packers were aggressive like none other in Wednesday's trade.
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