GENERAL COMMENTS:
While the live cattle and lean hog contracts drifted lower Thursday, the feeder cattle market wasted no time in capitalizing on the corn market's weakness. Hog prices on the Daily Direct Afternoon Hog Report closed lower, down $1.63 with a weighted average of $120.82 on 8,761 head. July corn is down 21 1/4 cents per bushel and July soybean meal is down $5.70. The Dow Jones Industrial Average is up 147.18 points.
On Thursday's Cold Storage report, red meat supplies in freezers were down slightly from a month ago but up 20% from last year. Total pounds of beef in freezers were down 2% from the previous month but up 25% from last year. Frozen pork supplies were up 2% from the previous month and up 17% from last year. Stocks of pork bellies were down 3% from last month but up 55% from last year.
LIVE CATTLE:
Even with the cards being stacked against them with a weaker trading board and softer boxed beef prices, Northern feedlots clung to the fact that packers need cattle and that showlists are manageable in their region, which helped them drive prices $4.00 higher by Thursday's afternoon. Cattle in the North sold for mostly $234, which is $4.00 higher than a week ago, but there were some regional sales to packers in Nebraska for prices upward of $238. A large portion of these sales are committed for delivery for the weeks of July 4 and July 11. The South traded some more cattle for mostly $138, which is steady with the week and $2.00 lower than last week. June live cattle closed $0.87 lower at $135.25, August live cattle closed $1.05 lower at $133.87 and October live cattle closed $1.07 lower at $140.00. Thursday's slaughter totaled 122,000 head, 5,000 head less than a week ago but 4,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending June 11, steers averaged 879 pounds, which is 3 pounds less than both a week and year ago. Heifers averaged 814 pounds, which was steady with the previous week but 3 pounds more than a year ago.
Boxed beef prices closed lower: choice down $1.91 ($264.66) and select down $1.05 ($244.94) with a movement of 104 loads (60.89 loads of choice, 17.75 loads of select, 16.63 loads of trim and 8.92 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Packers may have to do a little bit of clean-up business in Friday's market, but prices will likely remain steady with what the week has developed.
FEEDER CATTLE:
While the rest of the livestock complex traded lower, the feeder cattle market wasn't going to waste a perfectly good day where corn traded $0.21 to $0.38 lower, and countryside saw robust demand. August feeders closed $1.70 higher at $174.85, September feeders closed $1.55 higher at $176.85 and October feeders closed $1.32 higher at $178.62. The live cattle market may have run into some technical pushback this past week, but the feeder cattle market has only grown stronger as traders and cattlemen alike understand that the market's low inventory is going to propel prices higher this year. On Northern Livestock Video Auction's Early Summer sale, roughly 13,000 head of feeder cattle sold Thursday and their prices were incredibly strong. Steers weighing 500 to 549 pounds averaged $216.50, steers weighing 550 to 599 pounds averaged $197.00, steers weighing 600 to 649 pounds averaged $199.65, steers weighing 650 to 699 pounds averaged $198.11, and steers weighing 700 to 750 pounds averaged $195.38. Heifers weighing 500 to 549 pounds averaged $187.00, heifers weighing 550 to 599 pounds averaged $179.17, heifers weighing 600 to 649 pounds averaged $173.00, and heifers weighing 650 to 699 pounds averaged $170.88. The CME Feeder Cattle Index for June 22: up $0.02, $165.23.
LEAN HOGS:
Well, if Thursday wasn't a roundhouse kick right to the ol' kisser -- I don't know what would be. Sure, the commodity markets struggled throughout the day, but to see the lean hog contracts plummet $2.00 to $4.00 seems a little extreme. July lean hogs closed $3.30 lower at $108.55, August lean hogs closed $4.65 lower at $103.67 and October lean hogs closed $3.70 lower at $90.25. The cash market held its own throughout the day as prices were only $1.63 softer following Wednesday's $3.46 advancement. However, with pork cutout prices showing push back and slaughter speeds lagging, the market took a turn for lower prices and never looked back. Pork cutouts total 241.66 loads with 215.96 loads of pork cuts and 25.71 loads of trim. Pork cutout values: down $1.38, $109.77. Pork cutout prices faired relatively well throughout the day, but given the $14.69 drop in bellies, the overall carcass cutout price was sucked lower. Thursday's slaughter is estimated at 465,000 head, 1,000 head less than a week ago and 7,000 head less than a year ago. The CME Lean Hog Index for June 21: up $0.29, $110.74.
FRIDAY'S CASH HOG CALL: Lower. Given the board's weak performance throughout Thursday, Friday's trade isn't expected to be much considering the board's pushback and the fact that packers have already been active for two days.
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