GENERAL COMMENTS:
June cattle and May feeders are down from Friday's higher closes, showing caution as they start a new week. June lean hogs are modestly lower Monday, pulled down by new contract lows in the April contract.
LIVE CATTLE:
Starting a new week, live cattle futures are lower at midmorning Monday with the June contract down $1.17 at $161.10, down from Friday's new contract high close of $162.12. Last week's cash trade was roughly $3 to $4 higher for live cattle in the South and dressed trade was roughly $5 higher in the North. USDA will have new weighted averages out a little later Monday. Boxed beef prices finished last week $2.29 higher for choice and $1.97 higher for selects, good indications of retail demand, despite concerns about the economy. Monday morning, choice boxed beef was up $1.89 at $283.96 and selects were up $1.48 at $272.20 on 32 total loads.
The weekend saw deadly storms in the Midwest and South as it is the time of year when tornado activity is starting to pick up. The Northern Plains remain stuck in winter with more heavy snow over the weekend and even more on the way Tuesday and Wednesday. Meanwhile, the Southern Plains remains painfully dry with windy weather and temperatures in the 70s and 80s early this week. Red flag warnings are posted around the Texas Panhandle.
Dow Jones estimates Monday's cattle slaughter at 127,000, up from 125,000 a week ago. So far in 2023, cattle slaughter is down 2.3% from a year ago, but beef production is down 4.0%, due to lighter weights.
FEEDER CATTLE:
More heavy snow expected across the Northern Plains Tuesday and Wednesday will add to the difficulties of raising cattle this time of year and adds to flooding risks this spring. For many areas in the North, it should also mean greener pastures ahead, in contrast to the intense drought of the southwestern Plains. For now, retail beef demand has held up well, and, as long as it does, the trend in May feeder cattle remains up. The latest CME Feeder Cattle Index was up 99 cents at $193.34 for Thursday, March 30.
LEAN HOGS:
At midmorning Monday, June hog futures are trading up 45 cents at $92.07, finding support after a lower start, but still struggling after Thursday afternoon's Hogs and Pigs report revised previous inventory totals higher and confirmed ample supplies of hogs currently available. April hogs are trading down 27 cents, at a new contract low of $74.90.
To review, Thursday afternoon's Hogs and Pigs report was neutral on the surface, but bearish for nearby prices and a little supportive for back months. USDA revised the December 1 inventory up 1.28 million head and said available hogs weighing 180 pounds or more were up 2% from a year ago. On the supportive side, March-May farrowing intentions were down 1% from a year ago and a little less than expected. June-August farrowing intentions were down 3% from a year ago.
Here on Monday, Dow Jones estimated Monday's hog slaughter at 485,000, up from 480,000 last week. So far in 2022-23, hog slaughter is up 1.7%, but pork production is only up 1.1%. Judging by the poor performance of cash hog prices in the first quarter, available hogs have been easy to obtain and demand has not been brisk enough to accommodate supplies.
Cash hog prices in Monday morning's Daily Direct Hog report remain under pressure with national negotiated trades averaging 72.66 cents per pound and the swine formula base averaging 73.06 cents. Pork cutouts were up $2.90 at $80.18 Monday morning, helped especially by higher prices of bellies and picnics. CME's most recent lean hog index was projected down 31 cents at $75.46 for Thursday, March 30.
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