GENERAL COMMENTS:
The livestock contracts leaned into the last stretch of the week with ambition and closed Friday fully higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.62 with a weighted average of $115.72 on 5,009 head. July corn is down 3 3/4 cents per bushel and July soybean meal is up $8.40. The Dow Jones Industrial Average is down 38.29 points.
From Friday to Friday, livestock futures scored the following changes: June live cattle up $1.83, August live cattle up $0.38; August feeder cattle down $1.52, September feeder cattle down $1.25; July lean hogs up $5.53, August lean hogs up $4.13; July corn up $0.11, September corn up $0.05.
LIVE CATTLE:
If there's one thing we are still learning about 2022, it's that seasonalities aren't written in stone and anything can happen. Usually when the market traipses into June, folks become disinterested with the cash cattle market because, until late August/early September, prices tend to be soft. While we sit with record on feed numbers and astonishing throughput in both the fed cattle and beef cow slaughter markets, the industry is in a different realm that normal. Showlists are extremely current and the cash cattle market has been able to regain leverage at a time when its used to accepting any bid that comes around. Throughout the week, live cattle traded for $136 to $140, which is $4.00 higher than a week ago, and Northern dressed cattle traded for $223 to $236, but mostly at $230, which is roughly $4.00 higher than a week ago. In the North, where supplies of cattle are the thinnest and the cash cattle market is the most active, prices did top out at $149, which is a new high for the year. Some of the dressed cattle were bought with time, but given how thinly bought packers are on cattle, it's going to take them a couple weeks of aggressively buying before their arsenal is packed and they can then back off the cash market. June live cattle closed $0.27 higher at $130.02, August live cattle closed $0.27 higher at $136.57 and October live cattle closed $0.35 higher at $142.42.
Friday's slaughter is estimated at 124,000 head, steady with a week ago and 6,000 head more than a year ago. Saturday's slaughter is projected to be 48,000 head. This week's slaughter is estimated at 667,000 head, 7,000 head less than a week ago and 3,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.90 ($266.26) and select up $1.15 ($246.53) and with a movement of 106 loads (70.76 loads of choice, 19.62 loads of select, 8.38 loads of trim and 7.64 loads of ground beef). Throughout the week choice cuts averaged $268.32 (down $2.71 from last week) and select cuts averaged $246.38 (down $3.34 from last week) and total movement of cuts, grinds, and trim of 596 loads.
MONDAY'S CASH CATTLE CALL: Steady to somewhat higher. Given the losses that occurred last weekend in Kansas due to extreme weather circumstances, there are fewer cattle on showlists than either packers or feedlots assumed there would be. And, as packers continue to run swift chain speeds, their need for cattle continues.
FEEDER CATTLE:
The corn market lost its luster near the end of Friday, closing $0.03 to $0.04 lower, and the feeder cattle contracts pushed higher ahead of Friday's close, trading mostly $1.00 higher in all the contracts. August feeders closed $1.65 higher at $172.95, September feeders closed $1.57 higher at $174.80 and October feeders closed $1.55 higher at $176.52. With the power that's behind the live cattle market right now, tremendous technical support and aggressive interest from packers, feeder cattle buyers look at the promise that's grown back into the deferred live cattle contracts and are pleased with what they're seeing. Currently, the April 2023 live cattle contract sits at $155.02. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, feeder steers weighing 850 to 1,000 pounds sold steady to $4.00 higher, steers weighing 1,150 to $1,200 pounds traded $4.00 higher. A steady undertone was noted on heifers up to 800 pounds, but heifers weighing 800 pounds to 1,000 pounds traded $1.00 to $4.00 higher. The CME Feeder Cattle Index for June 16: up $1.61, $162.17
LEAN HOGS:
It was a stellar week for the lean hog contracts as the market saw continuous support from traders and strong fundamental support by midweek. July lean hogs closed $1.42 higher at $111.00, August lean hogs closed $1.85 higher at $107.87 and October lean hogs closed $0.62 higher at $93.70. Given that pre-fourth of July buying is going on, the heightened demand from consumers could carry into next week and help encourage traders to stay engaged in the market. Bellies again led the pork cutout values higher with a $16.70 gain and then was followed next by a $7.5 gain in the rib. Friday's slaughter is estimated at 458,000 head, 12,000 head more than a week ago and 9,000 head less than a year ago. Saturday's slaughter is anticipated to be 47,0000 head. Pork cutouts totaled 223.33 loads with 202.94 loads of pork cuts and 20.39 loads of trim. Pork cutout values: up $3.25, $114.61. The CME Lean Hog Index for June 16: up $0.18, $108.75.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. Packers have been showing the lean hog market support come Tuesday through Thursday, so it's unlikely that they'll be overly aggressive in Monday's market.
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