GENERAL COMMENTS:
As the stock market gave way to the market's pressures, the live cattle and feeder cattle markets jumped on board and road the ship lower. Meanwhile, the lean hog complex was able to rely on its strong fundamentals and keep its complex trading green despite the rest of the market's weakness. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.31 with a weighted average of $111.69 on 15,581 head. July corn is down 19 1/4 cents per bushel and July soybeans closed 15 1/4 cents lower. The Dow Jones Industrial Average is down 1,164.52 points.
LIVE CATTLE:
Wednesday was a sellout day for the live cattle market as traders jumped ship to the point where all the 2022 live cattle contracts withered away to new lows for the year expect the June contract. June live cattle closed $1.50 lower at $131.50, August live cattle closed $1.77 lower at $131.70 and October live cattle closed $1.60 lower at $137.92. Mix the board's weakness with the fact that come Friday the market will unveil another Cattle on Feed report, the live cattle market had little hope of keeping bear spreaders away. The cash cattle market saw some more trade in the North where prices ranged from $223 to $228, and Southern live cattle traded for $136 to $137.
Wednesday's slaughter is estimated at 125,000 head, steady with a week ago and 5,000 head less than a year ago.
Boxed beef prices closed lower: choice down $0.01 ($260.47) and select down $2.17 ($246.02) with a movement of 136 loads (84.07 loads of choice, 23.52 loads of select, 12.53 loads of trim and 15.75 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. At this point, the market is more concerned with volumes and seeing how many cattle trade this week as prices are established in both regions.
FEEDER CATTLE:
It's a depressing day for the cattle contracts as the both the live cattle and feeder cattle contracts trade lower despite a corn market that's also seeing vast erosion. August feeders closed $0.97 lower at $165.80, September feeders closed $0.77 lower at $168.45 and October feeders closed $0.65 lower at $170.72. With the pressure looming over the live cattle market to the point where all the 2022 live cattle contracts, except June, made new lows for the year, the feeder cattle markets had no choice but to turn bearish and set sail for lower price points. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, steers weighing 500 to 975 pounds traded $5.00 to $8.00 lower. Feeder heifers weighing 600 to 975 pounds traded $7.00 to $11.00 lower. Heifers weighing 450 to 600 pounds traded steady to $3.00 higher. Slaughter cows sold steady and slaughter bulls sold steady to $2.00 higher. The CME Feeder Cattle Index for May 17: down $0.22, $155.05.
LEAN HOGS:
The lean hog contracts teetered around the noon hour trying to decide if their market would yield to the bearish pressures that crippled the rest of the livestock complex and stock market, but upon sober evaluation, traders looked at the support that pork cutouts have been receiving, the day's strong slaughter pace and the market's strong cash interest and deemed higher prices was the move that needed to be made. June lean hogs closed $0.95 higher at $106.10, July lean hogs closed $0.77 higher at $108.52 and August live cattle closed $0.60 higher at $107.85. If the futures market and the market's fundamentals continue to walk hand in hand, then there's a strong chance that the market sees steady to higher trade in the later part of the week. Thursday's export report won't likely do much for the hog market, but that's a reality that all have come to accept at this point in the year. Pork cutouts total 287.26 loads with 253.97 loads of pork cuts and 33.29 loads of trim. Pork cutout values: up $1.50, $103.61. Wednesday's slaughter is estimated at 479,000 head, 3,000 head more than a week ago and 1,000 head more than a year ago. The CME Lean Hog Index for May 16: down $0.17, $99.90.
THURSDAY'S CASH HOG CALL: Lower. Given that 37,577 head have sold in the cash market over the past two days, I'd tend to bet that packers have their needs met for the week and come Thursday that prices are lower.
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