GENERAL COMMENTS:
Both the live cattle and feeder cattle contracts are rallying into Thursday's noon hour as the market is rooting for feedlots to keep cash prices steady, if they're not able to trade cattle higher this week. But given that cattle have yet to really trade, it's looking like feedlots could see higher prices if they remain committed to waiting the week out. July corn is down 9 cents per bushel and July soybean meal is down $8.00. The Dow Jones Industrial Average is down 122.89 points.
LIVE CATTLE:
It's amazing what a little tenacity in the cash cattle market can do for the live cattle complex. The cash cattle market still hasn't seen cattle trade as feedlots are holding out for better prices. Packers are playing tough as there are currently only bids being offered in Nebraska, but there's plenty of rumors floating around that cattle that were originally committed for the deferred delivery are being trucked out to packers as early as the following week. Again, highlighting the point that packers need cattle and that front-end currentness could allow feedlots to push this market higher. Asking prices in the South are noted at $172-plus and in the North at $282-plus. The futures complex is trading higher as traders want to believe that feedlots will trade cattle steady/somewhat higher this week. June live cattle are up $0.35 at $165.17, August live cattle are up $0.07 at $163.22 and October live cattle are up $0.40 at $167.47.
Beef net sales of 17,400 mt for 2023 were up 5% from the previous week and 7% from the prior four-week average. The three largest buyers were Japan (4,600 mt), South Korea (3,500 mt) and China (2,900 mt).
Boxed beef prices are higher: choice up $0.36 ($298.51) and select up $1.68 ($284.57) with a movement of 44 loads (32.49 loads of choice, 5.74 loads of select, zero loads of trim and 5.36 loads of ground beef).
FEEDER CATTLE:
The corn complex is again trading lower, and feeders are making up for their lousy performance throughout Wednesday's market as most of the feeder cattle contracts are trading at least $2.00 higher. August feeders are up $3.02 at $234.25, September feeders are up $2.97 at $236.92 and October feeders are up $2.87 at $238.55. When the cash cattle market begins to trade cattle -- if prices are steady to somewhat higher -- feeders will likely rally even more than what they currently are.
LEAN HOGS:
The lean hog complex is the only livestock market struggling throughout Thursday's market. The market is again trading at the bottom edge of its support plane as traders continue to react volatility in the hog complex. I am surprised, however, that Thursday's cash market has already seen 6,463 head trade. Given that the last two days saw over 18,000 head traded each day, one would have logically thought that packers were don't buying for the week. But with carcass weights declining, packers need more hogs and that's extremely evident in this week's market. June lean hogs are down $0.02 at $84.85, July lean hogs are down $0.20 at $85.35 and August lean hogs are down $1.00 at $83.92.
The projected lean hog index for May 17 is up $0.62 at $78.42, and the actual index for May 16 is up $0.63 at $77.80. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.30 with a weighted average of $78.12, ranging from $76.00 to $90.00 on 6,463 head and a five-day rolling average of $77.45. Pork cutouts total 124.71 loads with 112.61 loads of pork cuts and 12.10 loads of trim. Pork cutout values: up $3.18, $86.25.
Pork net sales of 31,900 mt for 2023 were up 6% from the previous week but down 25% from the prior four-week average. The three largest buyers were Mexico (15,500 mt), China (5,200 mt) and Japan (2,700 mt).
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