GENERAL COMMENTS:
The live cattle complex rounded out the week strong while the lean hog and feeder cattle markets both closed lower. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.77 with a weighted average of $75.69 on 4,185 head. July corn is up 13 1/4 cents per bushel and July soybean meal is up $5.00. The Dow Jones Industrial Average is up 328.69 points.
From Friday to Friday, livestock futures scored the following changes: June live cattle up $1.63, August live cattle up $0.88; August feeder cattle down $1.17, September feeder cattle down $0.85; June lean hogs down $6.95, July lean hogs down $8.35; July corn up $0.50, September corn up $0.35.
**The markets will be closed on Monday, May 29, for Memorial Day. Regular DTN commentary will resume on Tuesday, May 30.**
LIVE CATTLE:
Between new contract highs throughout the futures market, a rallying cash cattle complex and continued support from consumers -- it was a near perfect week for cattlemen. More than anything, the two factors that continue to drive this market higher are tight supplies and unwavering beef demand. When looking to the second half the year, supplies will likely grow even thinner and demand should continue to be a strong supporter. June live cattle closed $0.05 higher at $167.35, August live cattle closed $0.40 higher at $165.17 and October live cattle closed $0.57 higher at $169.60. Throughout the week, Southern live cattle traded for $171 which is mostly steady in Kansas but $1.00 higher in Texas, and Northern dressed cattle traded for $285 to $286, which is $4.00 to $5.00 higher than last week's weighted averages.
Friday's slaughter is estimated at 118,000 head, 4,000 head less than week go and 2,000 head less than a year ago. Saturday's slaughter is projected to be around 9,000 head. This week's slaughter is estimated at 625,000 head, 17,000 head less than a week ago and 16,000 head less than a year ago.
Boxed beef prices closed lower: choice up $3.99 ($303.93) and select up $0.38 ($284.92) with a movement of 89 loads (61.80 loads of choice, 12.38 loads of select, 7.43 loads of trim and 7.60 loads of ground beef). Throughout the week choice cuts averaged $301.36 (up $1.56 from last week) and select cuts averaged $283.59 (down $0.31 from last week) and the week's total movement of cuts, grinds and trim totaled 546 loads.
TUESDAY'S CATTLE CALL: Higher. Front-end supplies of market-ready cattle are thin and that could likely mean that packers need to be active and aggressive in next week's market.
FEEDER CATTLE:
With the nearby corn contracts closing $0.13 to $0.18 higher it's not surprising to see that the feeder cattle contracts rounded out the day lower. August feeders closed $0.77 lower at $233.92, September feeders closed $0.97 lower at $237.10 and October feeders closed $1.02 lower at $239.02. The market would have loved to rally alongside the live cattle contracts, but with corn making big moves, traders opted to error on the side of caution in Friday's market. Thankfully, feeder cattle demand remains tireless, which could help reinvigorate higher trade next week of corn prices don't trade much higher. Oklahoma's Weekly Cattle Auction Summary shared that compared to last week, feeder steers traded $3.00 to $8.00 higher, while feeder heifers sold $2.00 to $5.00 higher. Steer and heifer calves sold $6.00 to $12.00 higher. Slaughter cows sold $2.00 to $4.00 higher and slaughter bulls sold $1.00 to $2.00 higher. Feeder cattle supply over 600 pounds was 68%. The CME Feeder Cattle Index for May 25: up $1.72, $209.86.
LEAN HOGS:
The lean hog complex's hardship continued through all of Friday's trade as the market faded to even lower levels. Yes, the afternoon carcass price did close higher, but stronger pork cutout values isn't enough to comfort traders in this depressed marketplace. Heading into next week's market, the lingering question will remain: Where is the bottom at? June lean hogs closed $1.57 lower at $76.07, July lean hogs closed $2.47 lower at $74.77 and August lean hogs closed $2.90 lower at $74.05. Pork cutouts totaled 204.09 loads with 184.13 loads of pork cuts and 19.96 loads of trim. Pork cutout values: up $1.01, $82.20. Friday's slaughter is estimated at 457,000 head, 1,000 head less than a week ago and 9,000 head more than a week ago. Saturday's slaughter is projected to be around 20,000 head. Thursday's slaughter was revised to 468,000 head. The CME Lean Hog Index for May 24: up $0.13, $80.80.
TUESDAY'S HOG CALL: Lower. With demand continuing to be an issue for the hog complex, traders will likely ease their way into the market before buying too aggressively in the cash sector.
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