GENERAL COMMENTS:
The livestock contracts have seemed to take Wednesday's higher close as a bullish signal and are charging through Thursday's market while adding even more to their contracts. The cash cattle market hasn't seen much business develop throughout the day, and unless the week's trade is going to be thin again packers will need to get busy. July corn is down 1 3/4 cents per bushel and July soybean meal is up $2.10. The Dow Jones Industrial Average is up 140.05 points.
LIVE CATTLE:
The live cattle market has taken Wednesday's impressive close and launched the complex out of its sideways trading range and pushed the market to new territory for time being. June live cattle are up $0.77 at $133.57, August live cattle are up $1.22 at $134.12 and October live cattle are up $1.72 at $139.62. Traders are keenly aware that a record number of cattle sit inside feedlots in the U.S., but they're also keenly aware of how strong the market's export demand continues to be, and once these supplies of cattle are worked through, the market will likely face a complete 180-degree different reality with starkly fewer feeders to refill feedlots with. Nevertheless, the futures market is seeming to take into account the market's long-term reality, although the dog days of summer must still be worked through. The cash cattle market hasn't seen much more business develop as Northern feedlots aren't interest in giving their cattle away with showlists still giving them some leverage. A bid of $222 sits on the table in Nebraska, but otherwise the market has yet to see any renewed interest. Throughout the week, Southern live cattle have traded for $135 ($2.00 lower) and Northern dressed cattle have traded for $222 ($2.00 lower).
Boxed beef prices are mixed: choice down $0.67 ($266.75) and select up $1.28 ($250.19) with a movement of 79 loads (48.92 loads of choice, 14.40 loads of select, 7.29 loads of trim and 8.40 loads of ground beef).
FEEDER CATTLE:
With the corn crop being 86% planted and grasslands getting steady moisture throughout the week, the feeder cattle market has launched a rally and is demanding attention. August feeders are up $3.17 at $172.90, September feeders are up $3.12 at $175.55 and October feeders are up $2.85 at $177.62. The spot August contract is a big player for feeders. Historically, the August feeder cattle contract has been used to help set the market's early tone for summertime sales, which, believe it or not, will be happening in a mere two weeks. With that being said, cow-calf producers are watching the board meticulously, as any strength the market can muster between now and then will only help producers in marketing their calves.
LEAN HOGS:
Upon continued interest in the cash market come Thursday morning, and upon analyzing Wednesday's supportive close, traders have taken the lean hog complex and pushed it even higher as the cash and cutout values continue to work in sync to propel the complex higher. June lean hogs are up $1.35 at $111.05, July lean hogs are up $1.10 at $113.52 and August lean hogs are up $1.95 at $110.87. What's been incredibly interesting to watch has been packers' interest in the cash market. As supplies of market-ready hogs continue to be thin, the market is looking at a fancy top bid of $119.50! If pork cutout values can remain strong and continue to move product, then the market stands a fair chance at keeping its higher morale.
The projected lean hog index for June 1 is up $0.12 at $105.03 and the actual index for May 31 is down $0.24 at 104.91. Hog prices are higher again on the Daily Direct Morning Hog Report, up $0.96 with a weighted average of $113.85, ranging from $111.00 to $119.50 on 5,662 head and a five-day rolling average of $111.77. Pork cutouts total 153.42 loads with 133.44 loads of pork cuts and 19.99 loads of trim. Pork cutout values: up $4.19, $114.21.
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