GENERAL COMMENTS:
It's been a tough, slow start to the day for the livestock contracts as the market can't seem to summon any substantial support. The board's weakness is boding well for packers as they're aiming to get cattle bought cheaper this week, but at this point, feedlots aren't seeming concerned about the weaker bids and appear to be willing to sit and wait until better money rolls around. July corn is up 5 cents per bushel and July soybean meal is up $2.90. The Dow Jones Industrial Average is up 45.32 points.
LIVE CATTLE:
Packers are playing tough ball Wednesday morning as substantially lower bids have been thrown around. Showlists this week are larger in all major feeding states and packers are looking to drive prices lower as they've gotten some cattle committed for the deferred delivery. However, the question that's yet to be answered is: Do packers have enough cattle committed to wipe their hands of the market and hold out if feedlots won't accept these weaker bids? I tend to lean on the side of thinking not, as throughput has continued to run aggressively, and over the last two weeks, packers have had to jump at the cash market wildly to get the cattle that they've needed. As always, time will tell. August live cattle are down $1.75 at $173.55, September feeders are down $1.67 at $175.60 and October feeders are down $1.47 at $177.50. Some Southern cattle have traded at $138 in the South, which is $2.00 lower than last week, and bids of $230 to $237 are being offered in Nebraska, but thus far feedlots have yet to accept any of them.
The Fed Cattle Exchange Auction held Wednesday reported 9 lots, totaling 1,195 head of cattle. It was yet another week of which no cattle sold.
Boxed beef prices are lower: choice down $0.97 ($266.59) and select down $0.01 ($246.69) with a movement of 97 loads (60.72 loads of choice, 15.30 loads of select, 13.20 loads of trim and 7.76 loads of ground beef).
FEEDER CATTLE:
The grain market is attempting to regain some of what Tuesday's market threw away, but as the noon hour approaches, the corn market is trading convulsively and dancing on both sides of steady. Unfortunately, the feeder cattle contracts are trending lower as the market neglects to find the technical support it had Tuesday, and with the live cattle market trending lower too, a doggish tone has overcome Wednesday's futures market in the cattle complex. August feeders are down $1.55 at $173.75, September feeders are down $1.37 at $175.90 and October feeders are down $1.30 at $177.67.
LEAN HOGS:
The lean hog contracts haven't been able to keep with Tuesday's momentum and have seemed to stall out Wednesday. July lean hogs are down $0.52 at $112.20, August lean hogs are down $0.22 at $109.57 and October lean hogs are down $0.27 at $94.30. It's positive to see both cash and pork cutout values higher, and it's likely that cash prices stay elevated through the afternoon as packers look to gather up numbers, but the pork cutout value is a wildcard. Demand could be strong through the day's end, as retailers finalize any last-minute holiday buying needs, but prices have been tippy as late.
The projected lean hog index for June 21 is up $0.29 at $110.74, and the actual index for June 20 is up $1.29 at $110.45. Hog prices are higher on the Daily Direct Morning Hog Report, up $2.52 with a weighted average of $117.33, ranging from $112.50 to $124.50 on 4,520 head and a five-day rolling average of $115.88. Pork cutouts total 145.18 loads with 132.32 loads of pork cuts and 12.87 loads of trim. Pork cutout values: up $2.08, $112.94.
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