GENERAL COMMENTS:
The cattle market surpassed all expectations and had a robust day where the futures market traded $2 to $3 higher in the live cattle complex, and cash cattle traded anywhere from $1 to $4 higher. The dynamic trade that spurred the live cattle market higher spilled over into the feeder cattle market and pushed its contracts higher and invigorated buyers in sale barns. The lean hog market wasn't as fortunate, and with pork cutout values closing over $3 lower, the board erred on the side of caution and closed lower. Hog prices closed $0.43 higher on the Daily Direct Afternoon Hog Report, with a weighted average of $117.28 on 9,758 head.
LIVE CATTLE:
What a day! The futures market bolted higher, cash cattle surpassed the market's expectations of trading steady and jumped $1 higher in the South and $3-$4 higher in the North, and slaughter speeds continue to run like a bandit who just robbed a bank. June live cattle closed $3.10 higher at $136.82, August live cattle closed $3.40 higher at $137.52, and October live cattle closed $2.67 higher at $142.75. The market's tremendous performance pushed the spot August contract well above the 40-day and 100-day moving averages and pushed the market well outside of its sideways trading range. Feedlots knew that they stood on solid ground, demanding steady money, but as the market absorbs the understanding that packers are working through cattle faster than anticipated -- optimism brewed. Southern cattle traded for $136 ($1 higher than last week's trade), and Northern dressed cattle traded for $225 to $226 ($3 to $4 higher than last week's business).
Wednesday's slaughter is estimated at 126,000 head -- 1,000 head more than a week ago and 5,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $0.32 ($271.74) and select down $0.15 ($249.41) with a movement of 121 loads (74.55 loads of choice, 24.42 loads of select, 12.15 loads of trim and 9.42 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week. Given that cattle have traded in both regions, prices will likely hold steady with the week's trend.
FEEDER CATTLE:
The corn complex closed just slightly higher, but it wasn't enough to rattle the excitement out of the feeder cattle market. Upon seeing the live cattle contracts grab gears and shoot higher all while cash cattle began to trade $1 to $4 stronger, the feeder cattle market wasn't about to miss out on an opportunity to rally alongside its cattle counterpart. August live cattle closed $3.20 higher at $175.65, September feeder cattle closed $2.50 higher at $177.25 and October feeders closed $2.07 higher at $178.92. The market's good news didn't stop there, as the momentum charged buyers in sale barns Wednesday afternoon to wave their hand a couple more times. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, steers weighing 400 to 950 pounds sold $10 to $13 higher, and heifers weighing 400 to 940 pounds traded $7 to $12 higher. Slaughter cows sold $10 to $12 higher, and slaughter bulls traded $2 to $3 stronger. The CME feeder cattle index 6/7/2022: up $0.19, $158.68.
LEAN HOGS:
The lean hog contracts struggled throughout Wednesday afternoon, and aside from a few contracts in 2023, the market closed lower. Largely, it seemed like the excitement throughout the cattle market sucked traders' focus away from the hog market. Not helping matters, however, was that pork cutout values closed over $3 lower -- with the belly taking a $27.95 lower dive on the day. July lean hogs closed $1.32 lower at $107.95, August lean hogs closed $1.20 lower at $105.90 and October lean hogs closed $0.62 lower at $93.02. Pork cutouts total 268.01 loads with 246.62 loads of pork cuts and 21.39 loads of trim. Pork cutout values: down $3.36, $104.47. Wednesday's slaughter is estimated at 477,000 head -- steady with a week ago 7,000 head less than a year ago. The CME lean hog index 6/6/2022: up $0.46, $107.80.
THURSDAY'S CASH HOG CALL: Lower. Given that pork cutout values closed over $3 lower, the cash market won't likely see higher prices, but it could still see a sizeable volume trade.
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