GENERAL COMMENTS:
As if the markets weren't busy enough with a rally pushing cattle contracts higher and cash cattle prices anywhere from $2.00 to $4.00 higher, the highly anticipated interest rate jump came Wednesday afternoon as Feds hiked the benchmark rate up by 0.75 percent -- the biggest increase since 1994. While this might seem like bearish news, the market's seemed to have reacted to Fed Chairman Jerome Powell's statement of, "Clearly today's 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common," as a reassuring promise. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.61 with a weighted average of $119.86 on 15,571 head. July corn is up 5 3/4 cents per bushel and July soybean meal is up $6.50. The Dow Jones Industrial Average is up 303.70 points.
LIVE CATTLE:
The live cattle market had a thrilling day as the contracts closed $2.00 higher in the nearby months, cash cattle continued to see interest from packers at premiums to last week's market and Wednesday's slaughter was back up to 126,000 head -- all bullish news for the marketplace. June live cattle closed $2.35 higher at $137.55, August live cattle closed $2.72 higher at $136.80 and October live cattle closed $2.07 higher at $142.22. Wednesday's move throughout the contracts was significant as it helped close the chart gap made earlier in the week and pushed the spot August contract back above the market's 100-day moving average of $136.59. However, the real champion of this week's market is again the cash cattle sector. Prices have trended anywhere from $2.00 to $4.00 higher this week as packers continue to dive into feedlots hoping to get cattle bought as they're caught short bought. Throughout the week thus far, Southern live cattle have traded from $136 to $139, which is steady to $2.00 higher. Northern dressed cattle have traded from $223 to $230, roughly $4.00 higher. A percentage of the dressed sales have been committed for the deferred delivery for the weeks of June 27 and July 4.
Wednesday's slaughter is estimated at 126,000 head, steady with a week ago but 5,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.22 ($268.22) and select down $1.14 ($245.68) with a movement of 134 loads (83.95 loads of choice, 31.18 loads of select, 6.24 loads of trim and 12.50 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week. Given that packers have bought in both regions, it's unlikely that prices change.
FEEDER CATTLE:
The feeder cattle complex didn't hold back come Wednesday and the market proudly shot higher as traders were willing to move the market higher amid sound fundamental support. August feeders closed $1.97 higher at $173.27, September feeders closed $1.75 higher at $175.10 and October feeders closed $1.52 higher at $176.80. The market saw tremendous support throughout the countryside as sale barns reported mostly stronger sales and it appeared like the Corn Belt Classic fared well through their first day of sales. Helping push the feeder cattle market higher was the fact that the live cattle complex is seeing a rally throughout its futures contracts and in the cash market. As long as the corn market doesn't jolt higher and flood the market with more concerns about inputs, feeders stand a fair chance at keeping this momentum. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 650 to 950 pounds traded $4.00 to $6.00 higher. Feeder heifers weighing 650 to 850 pounds traded $2.00 to $5.00 higher. One fancy load of heifers weighing 731 pounds traded for $1.5985 which is $10.00 higher than last week. Slaughter cows traded $2.00 to $3.00 lower and slaughter bulls traded $4.00 to $5.00 higher. The CME Feeder Cattle Index for June 14: down $0.10, $160.08.
LEAN HOGS:
Even though the lean hog contracts flirted with the idea of trending lower, as the outside markets grew stronger the market absorbed its counter parts positive morale and rounded the day out higher. July lean hogs closed $1.65 higher at $108.27, August lean hogs closed $0.77 higher at $104.32 and October lean hogs closed $0.20 higher at $91.70. While it's uncomforting to see pork slaughter speeds wane and pork cutout values lag, at least the cash market championed the day with a stellar close as prices added another $0.61 on top of Tuesday's jump and traded 15,571 head. Thursday's export report could help the market keep its slightly higher tone but understanding that weakening processing speeds and dwindling consumer interest is no easy roadblock to get around. Pork cutouts totaled 287.40 loads with 265.53 loads of pork cuts and 21.87 loads of trim. Pork cutout values: down $2.88, $105.79. Wednesday's slaughter is estimated at 472,000 head, 5,000 head less than a week and year ago. Tuesday's slaughter was revised to 469,000 head, 5,000 head less than what was originally stated. The CME Lean Hog Index for June 13: up $0.73, $108.13.
THURSDAY'S CASH HOG CALL: Lower. Given that for two days now the cash hog market has seen interest, it's unlikely that Thursday's market will see much attention from packers as they most likely already have their needs met
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