GENERAL COMMENTS:
Heading into Friday afternoon, the cattle contracts are seeing slight pushback from traders, but the lean hog contracts are seeing a bit of recovery. The cash cattle market is seeing some more business develop in the South at $137 -- which is $1.00 higher than the business earlier this week and $2.00 higher than last week's average. July corn is down 3 1/4 cents per bushel and July soybean meal is down $0.30. The Dow Jones Industrial Average is down 760.07 points.
LIVE CATTLE:
It's been interesting to see some trade developing in the South again as packers evidently didn't have enough cattle bought. Low and behold, prices have even gotten stronger in the South as cattle are selling now for $137, which is $1.00 higher than the rest of the week's Southern trade and $2.00 higher than last week's business. The cash market sales this morning truly came down to packers not having enough cattle bought as the board lent no support given that it's trading with slightly weaker tones. June live cattle are down $0.45 at $136.50, August live cattle are down $0.65 at $136.57, and October live cattle are down $0.52 at $142.17.
In Friday's WASDE report, beef production for 2022 has been raised by 65 million pounds as fed cattle slaughter and beef cow slaughter have far surpassed earlier expectations. Quarterly steer prices didn't change from last month, which seems odd given that beef production did increase, and export demand was raised as well. Beef exports grew by 65 million pounds, and imports fell by 30 million pounds.
Boxed beef prices are mixed: choice up $0.94 ($272.04) and select down $0.18 ($249.43) and with a movement of 62 loads (33.43 loads of choice, 12.33 loads of select, 9.12 loads of trim and 7.54 loads of ground beef).
FEEDER CATTLE:
After a full-steam ahead approach taken earlier this week, the feeder cattle contracts are trading lower as the market looks for Friday's end. August feeders are down $0.52 at $175.47, September feeders are down $0.55 at $176.82 and October feeders are down $0.50 at $178.20. The technical push for this week's market has seemed to run its course as traders have become stagnant ahead of the weekend. But sales are continuing to see tremendous support in the countryside as buyers have gotten some good moisture and the supportive nature of this week's live cattle market has helped spur on buying ambition in the market.
LEAN HOGS:
After having a rough time earlier this week, the lean hog market has found some support Friday and the contracts are all higher. July lean hogs are up $0.65 at $105.65, August lean hogs are up $0.80 at $103.92, and October lean hogs are up $0.47 at $92.57. Along with modestly interested traders helping push the complex higher, the market is also leaning on the fact that pork cutout values closed $4.62 higher Thursday afternoon. It's likely the contracts keep these mild gains through the day's close but then must muster true support and a sense of direction come Monday.
Friday's WASDE report shared that 2022 pork production grew by 180 million pounds as the second quarter has seen increased slaughter speeds. The June 29 Quarterly Hogs and Pigs Report should give more clarity to what pork supply and demand fundamentals look like for the third and fourth quarter. The quarterly price projections for barrows and gilts only saw a $2.00 reduction in the second quarter to average $75.00 while the other quarters remained unchanged. Pork exports grew by 40 million pounds, and pork imports grew by 35 million pounds from last month's report.
The projected CME Lean Hog Index for 6/9/2022 is down $0.12 at $107.19, and the actual index for 6/8/2022 is down $0.17 at$107.31. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.62 with a weighted average of $115.32, ranging from $113.00 to $120.00 on 3,065 head and a five-day rolling average of $115.94. Pork cutouts total 145.53 loads with 134.21 loads of pork cuts and 11.32 loads of trim. Pork cutout values: up $2.50, $111.59.
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