GENERAL COMMENTS:
Both the live cattle and lean hog contracts saw pushback develop ahead of Wednesday's close. In looking to Thursday's market, lower tones could find their way into the marketplace unless stronger fundamental support comes first. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.04 with a weighted average of $112.62 on 9,684 head. July corn is up 1/2 cent per bushel and July soybean meal is down $2.90. The Dow Jones Industrial Average is up 191.66 points.
LIVE CATTLE:
A swing and a miss comes with Wednesday's close as the live cattle contracts closed mostly lower, boxed beef prices closed lower and cash cattle traded lower too. June live cattle closed $0.42 lower at $132.30, August live cattle closed $0.22 lower at $132.52 and October live cattle closed $0.42 lower at $138.20. After Monday's impressive move, the market has stalled out technically and hasn't gotten the fundamental support it's needed in order to charge forward. There was a light trade reported in the North where dressed cattle sold for $223 to $225, mostly at $223, which is $3.00 lower. There were a few more deals reported in the South at $137, which is steady with Tuesday's business but $1.00 lower than last week.
Wednesday's slaughter is estimated at 125,000 head, steady with a week ago and 4,000 head more than a year ago.
Boxed beef prices closed lower: choice down $0.72 ($262.93) and select down $1.29 ($244.06) with a movement of 102 loads (64.30 loads of choice, 19.63 loads of select, 6.60 loads of trim and 11.24 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Tuesday established prices in the South, and Wednesday established the week's prices in the North. Given that both regions have had cattle trade it's likely that any more cattle that trade trend steady with the week's tone.
FEEDER CATTLE:
The feeder cattle contracts closed mostly higher, although the August and September contracts both rounded out the day lower slightly lower. Feeders were able to keep their momentum through closing, as the corn market posed no real threat throughout Wednesday's market. The live cattle market was interesting to watch from a feeder perspective as the cash cattle market has yet to really trade a substantial volume of cattle, especially in the North. Given how complex the market's environment is (war in Ukraine, crop progress, inflation, questionable boxed beef demand), no one is falling asleep behind the wheel as the market is seeming to tread water until a clear trajectory is established. August feeders closed $0.20 lower at $167.95, September feeders closed $0.02 lower at $171.05 and October feeders closed $0.17 higher at $173.65. At Winter Livestock Auction in Dodge City, Kansas compared to a week ago feeder steers weighing 550 to 975 pounds traded $4.00 to $8.00 higher. There weren't enough steer calves to accurately test the market but of those weighing 400 to 550 pounds, a lower trend was obvious. Feeder heifers weighing 750 to 900 pounds sold steady to $2.00 higher. Heifers weighing 400 to 750 pounds traded unevenly steady. Demand was noted as good for cattle weighing more than 700 pounds, but moderate for those weighing under 700 pounds. Slaughter cows traded $1.00 to $2.00 lower and slaughter bulls sold $5.00 lower. The CME Feeder Cattle Index for May 24: up $0.18, $153.35.
LEAN HOGS:
Wednesday's market leaves an unsettled feeling for Thursday to either piece together and take higher or send lower. June lean hogs closed $0.02 higher at $109.05, July lean hogs closed $1.10 lower at $107.95 and August lean hogs closed $1.30 lower at $107.70. The front months of June, July and August hold a considerable premium to those of October 2022 and beyond, but in order for traders to feel comfortable continuing to support the nearby contracts, they're going to need to see stronger consumer demand. Cash prices did close slightly higher and on a considerable volume, but with the fact that Wednesday's slaughter speed was slower and that pork cutout prices closed weaker -- the market looks hesitantly toward Thursday. Pork cutouts totaled 244.00 loads with 220.57 loads of pork cuts and 23.44 loads of trim. Pork cutout values closed lower: down $1.17, $107.07. Wednesday's slaughter is estimated at 466,000 head - 13,000 head less than a week ago and 21,000 head less than a year ago. The CME Lean Hog Index for May 23: up $0.95, $103.03.
THURSDAY'S CASH HOG CALL: Steady. Packers are going to be active buyers in Thursday's market as they've not gotten a plethora of hogs committed this week, but prices could swing either way as supplies are still thin.
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