GENERAL COMMENTS:
Wednesday's market was a mixed bag for the livestock complex. The feeder cattle market was pushed lower by the onset of modest rally in the corn complex. The live cattle market closed higher but boxed beef prices rounded out the day lower and the cash market didn't see much interest, and the lean hog complex had another day of good sales in the cash market, but both the board and pork cutout values neglected to find support ahead of closing. Heading into Thursday's market be prepared for a busy day with export sales, the latest WASDE report and carcass weights all being released. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.81 with a weighted average of $108.29 on 9,156 head. July corn is up 13 1/4 cents per bushel and July soybean meal is down $3.60. The Dow Jones Industrial Average is down 326.63 points.
LIVE CATTLE:
The live cattle complex saw an uptick in prices throughout Wednesday's trade, but the day didn't amount to much as the market simply chopped sideways with its trend. June live cattle closed $1.17 higher at $133.57, August live cattle closed $0.55 higher at $134.65 and October live cattle closed $0.55 higher at $141.92. The market's questioning tone is highlighted by the boxed beef market's inability to gain ground ahead of the nation's prime grilling season. As consumers are feeling the squeeze of a weaker economy that's taking more of their hard-earned dollar to operate, boxed beef prices could be facing a correction in price after a record setting two years. The cash cattle market saw some faint interest at steady money with the week's trend. Throughout the week, live cattle have traded for $140 (steady with last week) and Northern dressed cattle have traded for $230 ($0.05 cheaper than last week). Wednesday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago and 6,000 head more than a year ago.
The Fed Cattle Exchange Auction on Wednesday listed a total of 1,317 head, of which 246 actually sold, none were scratched from the auction and 1,071 head were listed as unsold as they did not meet the reserve prices that ranged from $134 to $141. Opening prices ranged from $132 to $138, high bids ranged from $137 to $140. The state-by-state breakdown looks like this: Texas 1,177 total head, with 246 head sold at $137, 931 head went unsold; Kansas 140 total head, of which none sold.
Boxed beef prices closed lower: choice down $0.16 ($255.08) and select down $0.17 ($242.18) with a movement of 185 loads (101.80 loads of choice, 33.89 loads of select, 8.32 loads of trim and 40.61 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions, prices are realistically set for the week, but the bigger question is: How many head will trade this week?
FEEDER CATTLE:
As the corn market stole the day's show with a $0.13 to $0.17 advancement in its nearby contracts, the feeder cattle contracts set sail to lower prices and didn't look back. Yes, the live cattle complex did close higher, which theoretically should help strengthen the feeder cattle market, but with inputs being as outrageous as they corn's higher close trumped everything else. May feeders closed $0.77 lower at $158.15, August feeders closed $1.85 lower at $170.00 and September feeders closed $1.77 lower at $173.17. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, on a run of 2,781 head steers under 600 pounds, traded $2.00 to $4.00 higher and steers over 600 pounds traded with a firm undertone though exact comparisons couldn't be made. Feeder heifers traded mostly steady to $4.00 higher, but five-weight heifers traded up to $7.00 higher. The CME Feeder Cattle Index for May 10: down $0.09, $156.24.
LEAN HOGS:
The lean hog complex continues to stairstep it's way lower as the market can't seem to muster any substantial support. Pork cutout values continue to erode, and even though the cash market is seeing steady packer interest, the cash market's interest isn't compelling enough to turn the board's demeanor. June lean hogs closed $0.72 lower at $100.85, July lean hogs closed $1.42 lower at $101.55 and August lean hogs closed $1.40 lower at $101.95. Pork cutouts totaled 261.72 loads with 234.01 loads of pork cuts and 27.72 loads of trim. Pork cutout values: down $0.70, $99.49. Wednesday's slaughter is estimated at 482,000 head, steady with a week ago and 10,000 head more than a year ago. The CME Lean Hog Index for May 9: steady, $101.09.
THURSDAY'S CASH HOG CALL: Steady. Given that packers have been extremely aggressive in procuring hogs early in the week, it wouldn't be surprising if the back off the cash market in the second half, as they've bought a lot of hogs this week already.
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