GENERAL COMMENTS:
The cash cattle market saw another price jump as packers tallied up their purchases and had to give back into the Southern feedlots to shore up their needs. With carcass weights dwindling and showlists incredibly green, the cash cattle market could be setting itself up for a strong rally. Hog prices closed $2.52 lower on the Daily Direct Afternoon Hog Report, equating to a weighted average of $117.34 on 6,999 head. July corn is up 14 1/4 cents per bushel and July soybean meal is up $12.20. The Dow Jones Industrial Average is down 741.46 points.
LIVE CATTLE:
For two weeks in a row now the cash cattle market has stronger bids and higher prices come later in the week, as packers have scrambled to get the cattle bought that they need. There was a light trade that developed throughout the South for $140, which is $4.00 higher than a week ago and mostly $2.00 higher than the cattle sold earlier this week. With the cattle that were lost in Kansas due to extreme weather conditions (high humidity, no wind) front-end supplies of market-ready cattle just got greener and thinner, which will mean that packers have to pull on calf fed fats more aggressively. The live cattle contracts didn't do much throughout Thursday's market, ultimately ended up closing steady with Wednesday's top. June live cattle closed $0.20 higher at $137.75, August live cattle closed $0.50 lower at $136.30 and October live cattle closed $0.15 lower at $142.07. Thursday's slaughter is estimated at 127,000 head, 1,000 head more than a week ago and 6,000 head more than a year ago.
Beef net sales of 17,400 mt for 2022 were down 2% from the previous week and 12% from the prior four-week average. The three largest buyers were Japan (5,200 mt), China (4,600 mt) and South Korea (3,500 mt).
Thursday's actual slaughter data shared that for the week ending June 4, steer's averaged 882 pounds, which is 6 pounds lighter than the previous week and 9 pounds lighter than a year ago. For the same week heifers averaged 814 pounds, which is seven pounds lighter than the previous week but two pounds heavier than the same week a year ago.
Boxed beef prices closed lower: choice down $1.06 ($267.16) and select down $0.30 ($245.38) with a movement of 128 loads (90.17 loads of choice, 16.57 loads of select, 9.55 loads of trim and 11.75 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. Given that packers had to do some aggressive clean-up trade Thursday, it's likely that the week's business is now done with and prices are fully established.
FEEDER CATTLE:
The feeder cattle contracts grew leery as the corn market posted a $0.12 to $0.14 rally, but that didn't derail the rally throughout the countryside. Whether you look at the prices from Pratt, Kansas, below, or you tuned into Superior's Corn Belt Classic, feeder cattle sold with excellent demand and buyers weren't shy about their needs. Input costs are still a gamble, but it's almost as if the market is starting to realize just how few of feeder cattle the market will have to sort through later this year. August feeders closed $1.97 lower at $171.30, September feeders closed $1.87 lower at $173.22 and October feeders closed $1.82 lower at $174.97. At Winter Livestock Auction in Pratt, Kansas, compared to last week feeder steers weighing 725 to 900 pounds traded $5.00 to $10.00 higher. Feeder heifers weighing 800 to 900 pounds traded $3.00 to $4.00 higher. For both steers and heifers weighing 500 to 800 pounds, there weren't enough to establish a true trend. Slaughter cows sold $10.00 lower and slaughter bulls traded $3.00 to $4.00 lower. The CME Feeder Cattle Index for June 15: not available at this time.
LEAN HOGS:
With the day's encouraging export report and strong close in pork cutout values, the lean hog complex was encouraged to keep its momentum throughout the futures complex through closing. July lean hogs closed $1.30 higher at $109.57, August lean hogs closed $1.70 higher at $106.02 and October lean hogs closed $1.37 higher at $93.07. Pork cutout values saw substantial gains throughout most of the cuts, but belly cuts led the with a $10.48 jump, followed by a $5.70 jump in butt cuts. Pork cutouts total 207.99 loads with 189.81 loads of pork cuts and 18.18 loads of trim. Pork cutout values: up $5.57, $111.36. Thursday's slaughter is estimated at 466,000 head, 10,000 head less than a week ago and 15,000 head less than a year ago. The CME Lean Hog Index for June 14: up $0.44, $108.57.
Pork net sales of 27,600 mt for 2022 were up 65% from the previous week and up 1% from the prior four-week average. The three largest buyers were Mexico (14,700 mt), China (3,800 mt) and Japan (3,700 mt).
FRIDAY'S CASH HOG CALL: Lower. It was expected that prices would be lower Thursday afternoon, but it was impressive to see the market still move close to 7,000 head. Friday's market will likely see lower prices and thinner volumes traded.
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