GENERAL COMMENTS:
The cattle contracts rallied throughout Thursday's market as success in the cash sector has invigorated traders. Meanwhile, the lean hog complex continues to flounder as it looks for support and for a market bottom. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.73 with a weighted average price of $79.46 on 7,796 head. July corn is up 3 1/2 cents per bushel and July soybean meal is down $5.00. The Dow Jones Industrial Average is down 41.05 points.
LIVE CATTLE:
The power of the cash cattle market lived on through Thursday's hours as, not only did all the live cattle contracts close higher, but the June and August live cattle contracts carved out new contracts highs before the day was over. It's becoming more apparent just how tight front-end supplies really are as this week's cash cattle market was again able to rally because packers were/are short bought. The cash market didn't see much action through Thursday's hours as trade is essentially done with, but more cleanup trade could develop ahead of the weekend. A few bids of $285 to $285 were again offered in Nebraska, but feedlots let them sit unattended. So far this week, Southern live cattle have traded for mostly $171, which is steady in Kansas but $1.00 higher in Texas, and Northern dressed cattle have traded for mostly $285 to $286, which is $4.00 to $5.00 higher than last week's weighted average. June live cattle closed $1.20 higher at $167.30, August live cattle closed $0.65 higher at $164.77 and October live cattle closed $0.65 higher at $169.02. Thursday's slaughter is estimated at 125,000 head, steady with a week ago and 3,000 head more than a year ago. Wednesday's cattle slaughter was revised to 122,000 head.
Thursday's actual slaughter data shared that, for the week ending May 13, steers averaged 891 pounds, which is 4 pounds less than the previous week but steady with a year ago. Meanwhile, heifers during the same week averaged 820 pounds, which is 3 pounds less than the previous week and one pounds less than a year ago.
Beef net sales of 18,300 mt for 2023 were up 5% from the previous week and 15% from the prior four-week average. The three largest buyers were Japan (5,500 mt), South Korea (3,800 mt) and China (2,500 mt).
Boxed beef prices closed higher: choice up $1.64 ($299.94) and select up $0.75 ($284.54) with a movement of 104 loads (68.43 loads of choice, 28.25 loads of select, zero loads of trim and 6.83 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady with the week's trend. Some more cleanup trade could develop on Friday, but it's likely that feedlots hold onto the cattle they have left on showlists and price them higher next week as opposed to selling more late this week.
FEEDER CATTLE:
The feeder cattle complex closed higher yet again Thursday afternoon as the market continues to thrive on excellent feeder cattle interest and the support from the live cattle/cash cattle market. It also helped that corn prices closed mostly lower Thursday afternoon, which could mean that Friday's market is given the green light to trade higher as the pressures from the corn complex have seemed to die down somewhat for the week. August feeders closed $0.17 higher at $234.70, September feeders closed $0.45 higher at $238.07 and October feeders closed $0.47 higher at $240.05. I'd also like to note that it's already becoming hard to find sales across the country with enough feeder cattle offered to say an accurate market test was established. I tend to believe that there are scarcely fewer calves/feeders out there than what the market realizes. The CME Feeder Cattle Index for May 24: up $0.78, $208.14.
LEAN HOGS:
The bloodbath of Thursday's market didn't end until the market closed for the lean hog complex. The contracts floundered anywhere from $2.00 to $3.00 lower as, technically speaking, traders don't know where the bottom on this market is yet. Pork demand has been touch and go, and yes Thursday's export report wasn't anything overly exciting, but even so, the pressure seen throughout the futures makes tracking the lean hog complex a brutal chore. June lean hogs closed $2.15 lower at $77.65, July lean hogs closed $3.57 lower at $77.25 and August lean hogs closed $3.45 lower at $76.95. Pork cutout values were able to close mildly higher, but that had no influence on the contracts ahead of closing. Pork cutouts totaled 249.15 loads with 223.40 loads of pork cuts and 25.75 loads of trim. Pork cutout values: up $0.32, $81.19. Thursday's slaughter is estimated at 477,000 head, 7,000 head more than a week ago and 2,000 head more than a year ago. The CME Lean Hog Index for May 23: up $0.58, $80.67.
Pork net sales of 29,200 mt for 2023 were down 8% from the previous week and 29% from the prior four-week average. The three largest buyers were Mexico (14,400 mt), Japan (4,400 mt) and South Korea (4,400 mt).
FRIDAY'S HOG CALL: Lower. With how pitiful the market has been this week for the lean hog complex, it's very unlikely that the cash market sees much interest come Friday.
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