Friday Closing Livestock Market Update - Corn Plummets and Sends Cattle Back Over the Moon

GENERAL COMMENTS:

If you feel like your little hometown is singing the National anthem next week, stronger than you've ever heard it before, you're probably not wrong as cattlemen are beaming with excitement over this market. Normally, Fridays ahead of a holiday are mundane and boring, but, this Friday, the market couldn't have been further from that, with the sharp increase in corn plantings sending cattle back over the moon! Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.04 with a weighted average price of $90.96 on 2,281 head. December corn is down 33 3/4 cents per bushel and December soybean meal is up $16.80. The Dow Jones Industrial Average is up 285.18 points.

From Friday to Friday, livestock futures scored the following changes: June live cattle up $4.00, August live cattle up $6.40; August feeder cattle up $13.63, September feeder cattle up $13.13; July lean hogs up $4.38, August lean hogs up $2.93; July corn down $0.76, September corn down $0.96.

LIVE CATTLE:

The live cattle complex is marching into the weekend with a wide smile as the market's fundamentals are strong and traders helped push the contracts higher ahead of the day's end. The spot August contract scored a new contract high ahead of closing as traders couldn't help but run the contract higher upon seeing dramatically higher corn plantings and understanding the supply/demand scenario of this year's market. August live cattle closed $2.67 higher at $177.17, October live cattle closed $1.87 higher at $179.55 and December live cattle closed $1.85 higher at $183.52. Feedlots let some more cattle go ahead of the weekend, but they at least made packers work to get them. By the week's end, dressed Northern cattle had traded for $288 to $290, which is steady to $2.00 lower, but live Northern cattle traded for $182 to $184 which is $1.00 lower to $1.00 higher than last week's weighted average. Southern live cattle traded for $178, which is $1.00 to $2.00 lower than last week's weighted average.

Friday's slaughter is estimated at 123,000 head, 3,000 head more than a week ago and 1,000 head more than a year ago. Saturday's slaughter is projected to be around 19,000 head. This week's slaughter is estimated at 644,000 head, 5,000 head less than a week ago but 3,000 head more than a year ago.

Boxed beef prices closed lower: choice down $0.33 ($327.72) and select down $3.55 ($293.63) with a movement of 98 loads (57.71 loads of choice, 20.20 loads of select, 9.67 loads of trim and 10.51 loads of ground beef).

MONDAY'S CATTLE CALL: Higher. The cash cattle market won't likely see any interest on Monday, but come Wednesday, when the Fourth of July holiday is behind us, packers are going to be hungry for cattle.

FEEDER CATTLE:

Traders weren't sleeping on the job Friday as the jump in corn acres sent feeder cattle over the moon! Friday, USDA estimated 94.1 million acres of corn plantings, which is the largest area since 2013. The news caught the attention of the feeder cattle complex and traders wasted no time sending the feeder cattle contracts $3.00 to $5.00 higher. New contract highs were the theme of the nearby feeder cattle contracts, and this type of elevated energy could very well carry into next week. August feeders closed $5.20 higher at $247.57, September feeders closed $5.02 higher at $250.82 and October feeders closed $4.70 higher at $252.52.

The Oklahoma Weekly Cattle Auction Summary shared that, compared to last week, feeder steers and heifers traded $5.00 to $10.000 higher. Steer and heifer calves traded mostly steady expect the 400- to 500-pound steers sold $5.00 to $15.00 higher. Slaughter cows sold steady to $1.00 higher and slaughter bulls traded $4.00 higher. Feeder cattle supply over 600 pounds was 61%. The CME Feeder Cattle Index for June 29: up $1.78, $232.75.

LEAN HOGS:

The sharp increase in corn plantings helped prop the nearby lean hog contracts up ahead of closing, but the deferred contracts still closed lower. The market didn't see much other support as pork cutout values closed lower and the cash hog market only saw a measly 2,281 head traded today. July lean hogs closed $0.20 higher at $95.65, August lean hogs closed $0.27 higher at $92.60 and October lean hogs closed $0.97 lower at $78.37. Next week, the hog complex will be tasked on setting a direction for the market as it merely chopped sideways this past week and received mixed next from Thursday's Quarterly report. Pork cutouts totaled 227.01 loads with 204.20 loads of pork cuts and 22.81 loads of trim. Pork cutout values: down $0.45, $102.45. Friday's slaughter is estimated at 447,000 head, 5,000 head less than a week ago and 13,000 head more than a year ago. Saturday's slaughter is projected to be around 73,000 head. The CME Lean Hog Index for June 28: up $0.46, $93.42.

MONDAY'S HOG CALL: Lower. It's unlikely that packers will be active in Monday's cash market given that Tuesday's is a holiday and plants will be dark.

Friday Midday Livestock Market Update - Uptick in Corn Pushes Cattle Lower

GENERAL COMMENTS:

The livestock complex is trading mostly lower as the cattle contracts back away from an aggressive approach because of the slight uptick in corn prices. The lean hog complex is still trying to make sense of Thursday's Quarterly Hogs and Pigs report. It's likely this afternoon's trade is mundane as traders look forward to the 4th of July -- God Bless America! December corn is down 10 1/4 cents per bushel and December soybean meal is up $14.10. The Dow Jones Industrial Average is up 205.84 points.

LIVE CATTLE:

The live cattle complex traded higher Friday morning, but as the noon hour approaches, the complex is lower as traders note the slight uptick in corn prices. August live cattle are down $0.40 at $174.12, October live cattle are down $0.75 at $176.92 and December live cattle are down $0.57 at $181.10. The cash cattle market saw bids renewed in Texas at $179 and in Nebraska at $286, right at the day's get-go. But at this point no feedlot manager seems too worried about marketing any more cattle at the week's last hour. Packers will probably be more aggressive in next week's market and could even end up paying $1.00 or $2.00 more. So far this week Southern live cattle have traded for $178, which is $1.00 to $2.00 lower than last week's weighted average, and Northern live cattle have traded for $182, which is also $1.00 to $2.00 lower than last week's weighted average. Hardly any dressed cattle have traded in the North this week, but of the few that have, dressed sales have been marked at $290, which is steady with last week's weighted average.

Boxed beef prices are lower: choice down $0.16 ($327.89) and select down $1.64 ($295.54) with a movement of 74 loads (46.07 loads of choice, 10.28 loads of select, 9.53 loads of trim and 7.94 loads of ground beef).

FEEDER CATTLE:

After rallying nearly all week, the feeder cattle market's upward swing has been stalemated by Friday's jump in corn prices. Thursday's rainstorm came as a mixed blessing as some parts of the storm's path received some desperately needed moisture, but other parts were plagued by severe wind and hail damage. The nearby corn contracts are rallying anywhere from $0.02 to $0.06 higher which is why feeders are treading backwards this morning despite the fact demand is still good for feeders across the nation. August feeders are down $1.50 at $240.87, September feeders are down $1.17 at $244.62 and October feeders are down $1.07 at $246.75.

LEAN HOGS:

Now that the market has had some time to chew over Thursday's Quarterly Hogs and Pigs report, traders are a little too mind-boggled with the report's findings and are sending the contracts lower into Friday's noon hour. The report oddly stated the U.S. breeding herd had grown from last quarter, which seems nearly impossible as producers faced incredibly strenuous financial conditions and continue to plan for the implementation of Prop 12 later this year. Nevertheless, the contracts (both nearby and deferred) are trading lower but only modestly so. Some packers obviously needed to get a few more hogs bought ahead of the long weekend as cash prices jumped over $4.00 this morning. July lean hogs are up $0.10 at $95.55, August lean hogs are down $0.42 at $91.97 and October lean hogs are down $1.00 at $78.35.

The projected CME Lean Hog Index is delayed from the source. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.40 with a weighted average price of $91.29, ranging from $85.00 to $94.00 on 1,664 head and a five-day rolling average of $91.80. Pork cutouts total 147.56 loads with 137.60 loads of pork cuts and 9.97 loads of trim. Pork cutout values: up $1.75, $104.65.

Friday Morning Livestock Market Update - Spread Unwinding Expected in Hogs

GENERAL COMMENTS:

Cattle benefited from lower corn prices again. Strength did not stem from higher cash trade as most of what has taken place has been $1.00 to $2.00 lower. Cash activity had been light as both packers and feedlots have not been aggressive to accomplish business. It is uncertain whether either side will be more willing to accomplish business Friday or if feedlots will be content to hold over another week. Packers are preparing for a holiday week and seem to have sufficient cattle on hand to fulfill their needs. Boxed beef prices were higher in both categories with choice up $0.15 and select up $0.50. Weekly export sales were respectable but lower than the previous week at 12,000 metric tons (mt). Higher corn prices overnight may temper the recent rally as the cattle complex has been moving accordingly. Friday is the last day for the June live cattle contract. August will take over as front month next week. The grain Quarterly Stocks report and Planted Acreage report may be the focus of the day.

Spread trading continued again in hog futures, pushing the July contract near the highs of last week. The slight bearishness of the Hogs & Pigs report may cause some spread unwinding as all hogs, hogs kept for breeding, and hogs kept for marketing were even with a year ago rather than the 0.7% decline the trade estimated. However, the longer-term picture looks more bullish as June -- August and September -- November farrowing intentions were 4.0% lower than a year ago and were below the average trade estimate. This may tighten hog supplies down the road. Cutout prices were strong Thursday with a gain of $3.82. However, packers were not as aggressive with the National Direct Afternoon Hog report showing cash down $0.21. Weekly export sales were not as good as hoped at 26,700 mt, but were respectable. Saturday slaughter is estimated at 65,000 head.

	BULL SIDE		BEAR SIDE
1)	Feeder cattle futures have nearly eliminated the recent losses due to the weakness of corn. A change of the weather pattern with more chances of rain may put further pressure on corn.	1)	Continued weakness of cash cattle indicates demand is slowing. Weaker corn prices may not continue to support the market.
2)	Cattle numbers remain tight with some green cattle being pulled forward. Supply is not expected to increase anytime soon.	2)	Traders may liquidate to take some profits Friday after the recent strength due to it being the end of the month and end of the quarter.
3)	Packers may be more aggressive with purchasing hogs next week as retail will restock and slaughter will get back to normal after the holiday.	3)	The slight bearishness of the Hogs & Pigs report in the kept for breeding category may keep upside potential limited.
4)	The bullish aspect of June through November farrowing intentions may be friendly to deferred hog futures.	4)	Lower cash is expected today as packers have not been aggressive so far this week as they prepare for the holiday next week. This may leave hog futures mixed Friday with little direction.

Thursday Closing Livestock Market Update - Cattle Keep Grinding Higher

GENERAL COMMENTS:

It was a strong day for the cattle complex and an odd day for the lean hog market as Thursday's Quarterly Hogs and Pigs Report boasted heavier supplies than expected. Hog prices closed lower on the Daily Direct Afternoon Hog Report down $0.21 with a weighted average price of $94.00 on 2,058 head. December corn is down 8 1/4 cents per bushel and December soybean meal is up $2.50. The Dow Jones Industrial Average is up 269.79 points.

LIVE CATTLE:

All in all, the live cattle complex had a good day with the futures complex closing higher, boxed beef finding some support and feedlots only selling a handful of cattle through Thursday's afternoon. In most cases, I pray that the week's volume of cash cattle sales is high week in and week out, but this year is different given where feedlots sit with supplies and that packers will run reduced processing speeds over the course of the next week. Packers are simply buying cattle this week to pad their inventory and to avoid being short bought in the weeks ahead. However, feedlots are extremely current with their showlists and could afford to simply roll this week's showlist over to next week and not suffer an once. Most feedlots seem to agree with this theory as only a handful of cattle have traded this week and most managers seem to be OK taking their chances on next week's market. Thursday afternoon, a light trade was reported in Nebraska at $182, which is roughly $1.00 lower than last week's weighted average. Earlier this week, Southern live cattle traded for $178 to $179 which is $1.00 to $2.00 lower than last week's weighted average. August live cattle closed $0.62 higher at $174.50, October live cattle closed $0.65 higher at $177.67 and December live cattle closed $0.80 higher at $181.67. 

Thursday's slaughter is estimated at 125,000 head, steady with a week and year ago.

Thursday's actual slaughter data shared that, for the week ending June 11, steers averaged 882 pounds, which is steady with a week ago but three pounds heavier than a year ago. For the same week, heifers averaged 809 pounds, which is 3 pounds less than the previous week and 5 pounds lighter than a year ago.

Beef net sales of 12,000 mt for 2023 were down 9% from the previous week and 16% from the prior four-week average. The three largest buyers were China (2,500 mt), Japan (2,500 mt) and Canada (1,400 mt).

Boxed beef prices closed higher: choice up $0.15 ($328.05) and select up $0.50 ($297.18) with a movement of 96 loads (56.62 loads of choice, 24.03 loads of select, zero loads of trim and 15.78 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady to somewhat higher. Packers will continue to try to buy cattle this week, but most feedlots seem unwilling to let their pens for the bids that they're currently offering.

FEEDER CATTLE:

It was another prosperous day for the feeder cattle complex as the market ran $1.00 to $2.00 higher and once again capitalized on the grain market's weakness. The live cattle market grew stronger as the day traded on and offered feeders some support, but more than anything feeders continue to be fanned higher from the corn market's regression and from the impeccable demand currently being seen throughout the countryside for feeders. August feeders closed $2.12 higher at $242.37, September feeders closed $2.07 higher at $245.80 and October feeders closed $1.85 higher at $247.82. The CME Feeder Cattle Index for June 28: up $4.96, $230.97.

LEAN HOGS:

Truthfully, I'm bewildered by the findings in Thursday's Quarterly Hogs and Pigs report. I don't understand that how in a time when pork producers are enduring the worst possible financial year ever recorded that the breeding herd inventory would have grown from last quarter? 

However, like I mentioned in my other comments, time will tell if there are really that many sows sprinkled across the U.S. still producing litters of piglets, or if the USDA is wrong. If their findings are indeed true, supply pressure will likely be a conversation we have later this year and into 2024. July lean hogs closed $1.17 higher at $95.45, August lean hogs closed $1.22 higher at $92.32 and October lean hogs closed $0.02 lower at $79.35. Pork cutout values were able to push a snappy $3.82 gain through the day's end, but that was largely because of a $18.85 increase in the belly and a $7.69 jump in the ham. Pork cutouts totaled 254.30 loads with 217.73 loads of pork cuts and 36.56 loads of trim. Pork cutout values: up $3.82, $102.90. Thursday's slaughter is estimated at 456,000 head, 7,000 head less than a week ago and 10,000 head less than a year ago. The CME Lean Hog Index for June 27: up $0.44, $92.96.

Pork net sales of 26,700 mt for 2023 were down 7% from the previous week but up 3% from the prior four-week average. The three primary buyers were Mexico (15,100 mt), South Korea (4,100 mt) and Japan (2,600 mt).

FRIDAY'S HOG CALL: Lower. Packers are done buying for the week and won't likely support Friday's cash hog market much at all ahead of the weekend. 

Thursday Midday Livestock Market Summary - Livestock Complex More Optimistic

GENERAL COMMENTS:

The livestock complex is trading mostly higher into Thursday's noon hour as traders anxiously await Thursday afternoon's Quarterly Hogs and Pigs report and as they wait to see what all develops in the cash cattle market. At this point, feedlots have yet to let any more cattle trade as they seem to be holding out for better prices. December corn is down 5 cents per bushel and December soybean meal is up $1.00. The Dow Jones Industrial Average is up 278.05 points.

LIVE CATTLE:

Early in the day, the live cattle complex was trading lower, but as the noon hour nears traders are starting to believe that this week's cash cattle market may be thin and that feedlots could potentially roll over their showlists to next week where they stand a better chance at getting more money for their cattle. Packers are offering bids in both regions ($180 to $182 in the North, and $179 in the South) but, at this point, feedlot managers don't seem interested in those offers and continue to pass. It's also encouraging to see boxed beef prices higher at midday as well. Last Friday's Cold Storage report shared that total pounds of beef in freezers was down 6% compared to a month ago and down 20% compared to a year ago, which should keep beef prices elevated so long as consumer demand remains relentless. August live cattle are down $0.30 at $173.57, October live cattle are up $0.02 at $177.05 and December live cattle are up $0.15 at $181.02.

Beef net sales of 12,000 mt for 2023 were down 9% from the previous week and 16% from the prior four-week average. The three largest buyers were China (2,500 mt), Japan (2,500 mt) and Canada (1,400 mt).

Boxed beef prices are higher: choice up $0.92 ($328.82) and select up $1.71 ($298.39) with a movement of 53 loads (29.95 loads of choice, 12.78 loads of select, zero loads of trim and 10.58 loads of ground beef).

FEEDER CATTLE:

With the nearby corn contracts trading $0.05 to $0.07 lower, the feeder cattle complex continues to trade higher into Thursday's noon hour. The live cattle contracts aren't lending much support as their contracts are trading mixed, but the fact that only a few pens of fat cattle have sold is promising for the cash cattle market which always helps bolster the moral of feeders. August feeders are up $0.80 at $241.05, September feeders are up $0.70 at $244.42 and October feeders are up $0.75 at $246.72.

LEAN HOGS:

The lean hog complex is trading higher as the market anticipates that Thursday afternoon's Quarterly Hogs and Pigs report will disclose a smaller breeding herd which in time will mean that pork prices should increase. If the report does disclose a smaller breeding herd, the ramifications of fewer sows in the marketplace won't likely affect prices until later this year, but that's also when Prop 12 is supposed to go into effect so pork prices could be in for a wild ride later this year. July lean hogs are up $0.95 at $95.22, August lean hogs are up $1.55 at $92.57 and October lean hogs are up $0.57 at $79.95.

The projected lean hog index for June 28 is up $0.46 at $93.42 and the actual index for June 27 is up $0.44 at $92.96. Hog prices are lower on the Daily Direct Afternoon Hog Report, down $6.61 with a weighted average price of $86.89, ranging from $85.00 to $90.00 on 678 head and a five-day rolling average of $91.41. Pork cutouts total 160.40 loads with 136.97 loads of pork cuts and 23.43 loads of trim. Pork cutout values: up $4.72, $103.80.

Pork net sales of 26,700 mt for 2023 were down 7% from the previous week but up 3% from the prior four-week average. The three primary buyers were Mexico (15,100 mt), South Korea (4,100 mt) and Japan (2,600 mt).

Thursday Morning Livestock Market Update - Quarterly Hogs & Pigs Report Today

GENERAL COMMENTS:

The floodgate of cash activity still has not opened as packers and feedlots have yet to come together to agree on prices. Cash activity should take place Thursday. Overnight corn futures will not provide the catalyst for cattle to trade higher as it did the past two days. Stability might be seen in grains as positioning is done ahead of the Quarterly Stocks and Planted Acreage report. Boxed beef continues to struggle with choice down $1.33 and select down $1.75. This will leave packers unwilling to pay more for cattle. Feeder cattle have capitalized on the weakness of corn but that may now have run its course for the time being. Feeder cattle have made a monumental gain over the past week, leaving chart gaps in its wake. Futures may be hard pressed to move higher, even though demand for feeder cattle is good.

Hog futures showed continued spread trading as traders prepared for the Quarterly Hogs & Pigs report to be released Thursday afternoon. The estimate for all hogs and pigs on June 1 is 99.3%, kept for breeding is 99.23%, and kept for marketing is 99.3%. The farrowing intentions may be the area of most interest as June to August intentions are estimated at 97.4% and September to November intentions at 97.3% of last year. Cutouts were down $1.08 Wednesday with hams showing the most weakness with a loss of $7.49. Saturday slaughter is estimated at 65,000 head.

	BULL SIDE		BEAR SIDE
1)	Feedlots are expected to hold out for nothing less than steady prices. This would provide support and limit any technical selling.	1)	Continued weakness of boxed beef may limit upside cash price potential. Demand has shifted lower, resulting in lower prices to stimulate consumer buying.
2)	Nearby cattle supplies continue to remain tight and will not change anytime soon. Demand has slowed but continues to remain strong.	2)	Price strength in cattle futures based solely on the weakness of corn is a weak rally.
3)	Traders may have positioned themselves ahead of the Hogs & Pigs report with spreading trading having run its course. Deferred contracts may rebound somewhat.	3)	Hogs have not been able to continue the recent price rally with the market having priced in current fundamentals. Futures might consolidate for a time.
4)	Weekly export sales are expected to be better than last week, indicating international demand remains strong.	4)	July, August, and October hog futures have chart gaps below the market that could eventually be filled.

Wednesday Closing Livestock Market Update - Weakness in the Grain Sector Continues to Push Cattle Higher

GENERAL COMMENTS:

For the cattle complex, Wednesday's market was rather supportive as traders continue to run higher on the fact that corn prices keep trending lower and that feedlots seem extremely committed to seeing cash prices either trade steady this week or that they'll simply hold over their showlists. Meanwhile, the hog market closed mostly lower as traders don't want to do anything with the market until they see what Thursday's Quarterly Hogs and Pigs report brings. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.30 with a weighted average price of $94.21 on 6,486 head. December corn is down 24 1/4 cents per bushel and December soybean meal is down $7.40. The Dow Jones Industrial Average is down 74.08 points.

LIVE CATTLE:

The live cattle continued to trade higher through Wednesday's end as traders felt reassured by their recent days of higher trading with corn prices still trading lower and by the fact that feedlot managers seem committed to keeping the market at least steady this week. August live cattle closed $1.37 higher at $173.87, October live cattle closed $0.95 higher at $177.02 and December live cattle closed $0.70 higher at $180.87. I'm hopeful that given the fact that the week has yet to see many cash cattle trade at this point that feedlots are either going to demand that prices stay at least steady this week or that they'll simply deny trading any cattle. Feedlots sit in a strong position this week as their showlists are current (extremely current) and it wouldn't hurt them to roll over this week's offering to next week. The only negative outcome of this week's cash cattle market would be trading cattle lower -- if feedlots hold onto their offering or trade them at steady/somewhat higher prices, both of those options are a win-win. 

Wednesday's slaughter is estimated at 126,000 head -- 1,000 head more than a week and a year ago.

Boxed beef prices closed lower: choice down $1.33 ($327.90) and select down $1.75 ($296.68) with a movement of 105 loads (60.22 loads of choice, 19.69 loads of select, 14.64 loads of trim and 10.73 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. Feedlots seem extremely committed to holding the market at least steady this week.

FEEDER CATTLE:

The feeder cattle complex rallied through Wednesday's end as the market couldn't help but take an aggressive stance and propel its prices higher with the nearby corn contracts closing $0.24 to $0.33 lower. When feeder cattle buyers look at today's marketplace, they see some more opportunity than what was present in recent days as grain prices continue to regress. Feeder cattle prices are still and penciling a breakeven can be tough with nearly all inputs higher, but if corn prices can show feeders some mercy and the cash cattle market remain snappy -- then opportunity and optimism remain. August feeders closed $1.75 higher at $240.35, September feeders closed $1.75 higher at $243.72 and October feeders closed $1.65 higher at $245.97. At Huss Livestock Auction in Kearney, Nebraska compared to their last sale two weeks ago steers over 600 pounds sold steady to $5.00 higher and heifers over 600 pounds traded steady. The crowd was full, and demand was good. Feeder cattle supply over 600 pounds was 78%. The CME feeder cattle index 6/27/2023: up $1.04, $226.01.

LEAN HOGS:

The cash market wasn't any help and pork cutout values rounded out the day lower too which left the lean hog complex with little reason to close higher. The nearby contracts were able to remain elevated through the day's end, but the deferred contracts remained skeptical of taking a higher position ahead of seeing what Thursday's Quarterly Hogs and Pigs Report could do. For the hog complex, Thursday's focus will be solely centered on seeing what the latest Quarterly report presents and how that could affect both demand and prices in the near future and through the remainder of the year. July lean hogs closed $0.15 higher at $94.27, August lean hogs closed $0.05 higher at $91.10 and October lean hogs closed $0.40 lower at $79.37. Pork cutouts total 172.75 loads with 157.42 loads of pork cuts and 15.33 loads of trim. Pork cutout values: down $1.08, $99.08. Wednesday's slaughter is estimated at 450,000 head -- steady with a week ago and 17,000 head less than a year ago. The CME lean hog index 6/26/2023: up $0.41, $92.52.

THURSDAY'S HOG CALL: Steady/somewhat lower. Packers aren't seeming to be in dire need of hogs this week which makes perfect sense given that multiple days later this week and early next week will be dark processing days for packers where either fewer hogs are processed or kills are cut completely for the holiday's sake.

12-month outlook for cattle suggests profitable returns for cow-calf producers and slightly profitable returns for cattle feeders

Cow-calf producers will benefit from record cattle prices and improving pasture conditions. Cattle feeders will benefit from higher cattle prices, but profits will be challenged by elevated feed costs and inflation.

12-Month Profitability Outlook

Industry drivers 

Cold spring increased calf losses

A long, cold spring complicated calving and delayed when producers could turn cows onto pasture. In Montana and Oregon, the cold weather caused increased death loss as some calving areas experienced up to 4% death losses (typically 2%). The cooler temperatures delayed producers in Idaho, Montana and Oregon from turning their cattle onto spring pasture. In turn, producers relied more heavily on hay stocks, depleting their reserves, and most will need to purchase hay before winter. Cattle producers that purchase hay will benefit from decreasing hay prices (see the Hay Snapshot).

Record cattle prices

Favorable cattle prices and strong demand for beef are creating a promising year for western cattle ranchers. Since the beginning of 2023, producers have benefited from favorable cattle prices. The price increase is largely driven by several consecutive years of drought in major cattle-producing areas which forced ranchers to cull cattle and resulted in a declining national cattle herd. Favorable cull cow values have encouraged producers in areas with subpar pasture conditions to cull and the likely effect is the national herd rebuilding will not start until 2024. This creates opportunities for western growers who will benefit from the improving pasture conditions, strong prices and solid beef demand.

Prices will mitigate beef availability challenges 

Decreasing beef production and continued demand have supported strong beef prices. Beef production fell 4.2% year over year because of slowing slaughter rates (3% lower than 2022) and lower carcass weights (down 15.7 lbs. compared to June 2022). Retail ground beef prices in the first three months of 2023 have averaged $0.15 per lb. higher than Q1 2022 (up $0.88 per lb. from the 5-year average). Despite price increases, consumer demand has remained steady with few incidents of the substitution effect (switching to cheaper cuts of meat or alternate protein sources). As consumer demand reached a seasonal peak in late May, higher prices masked issues with beef availability.

Proposed changes to BLM grazing permits

The Bureau of Land Management (BLM) has proposed a new public lands rule that could increase competition for permits and potentially price ranchers out of using BLM land for livestock. Current BLM policy specifies permits are to be for grazing purposes only. The proposed change would allow conservation as an additional use for these permits. BLM manages 18,000 grazing permits on 155 million acres, with most grazing acres located in the western U.S. These permits provide affordable rangeland for ranchers, and grazing permits are issued in a bidding system. If the proposed change occurs producers could face more competition and risk being outbid. 

Supreme Court upholds Prop 12 

The Supreme Court's 5-4 ruling upholding California's Proposition 12 could have a significant impact on the cattle industry by creating individual state laws that dictate cattle production standards (even if they do not align with industry recommendations). Proposition 12 creates minimum space requirements for egg-laying hens, veal calves and breeding pigs sold in California and prohibits the sale of meat and eggs produced in other states that do not meet these standards. For beef, Proposition 12 requires that cattle be raised in pastures with at least 43 square feet of space per animal, more than double the current industry standard. Implementing these standards could cause increases to cattle producers’ operational costs. Moreover, the industry is concerned the law will inspire other states to create their own state-specific production rules, driving up ranchers’ expenses and making it more difficult to sell beef in multiple states. 

Profitability

Producers will benefit from strong cull cow values and record cow-calf prices. Northwest pasture conditions (while delayed because of snowpack) have been stronger due to improvements in moisture. At the same time, Southern Plains producers will face the worst pasture conditions in the nation, and in turn, cull more cows. Tighter beef supplies and strong demand will allow producers that have retained and grown their herds to benefit from strong cow-calf returns through 2025.

Cattle feeder margins have remained strong despite headwinds from elevated production costs. On June 20, 2023, cattle feeder profits reached nearly $440 per head and cattle feeders’ margins are projected to finish the year with an annual average return of over $150 per head, up 4% year over year. Strong demand despite high prices has been a key driver of cattle industry optimism; however, if beef demand declines it would also curb cattle feeders’ margins. Even with looming concerns of a global slowdown in late 2023, analysts predict beef demand will remain strong. Reductions in corn and feed prices have helped to drive up early feeder cattle prices. Cattle feeders should benefit from strong prices and consumer demand.

Wednesday Midday Livestock Market Summary - Hogs Remain Hesitant Ahead of Thursday's Quarterly Report

GENERAL COMMENTS:

The lean hog complex isn't rallying alongside the cattle contracts as traders continue to take a cautious approach to the market ahead of Thursday's Quarterly Hogs and Pigs report. The cash cattle market hasn't seen any more trade develop, but bids are currently being offered in both the North and the South. December corn is down 12 1/2 cents per bushel and December soybean meal is down $5.00. The Dow Jones Industrial Average is down 29.36 points.

LIVE CATTLE:

The live cattle complex is trading mostly higher as the nearby contracts see the corn market's weakness as a positive sign, plus the fact that feedlots seem to be holding out for steady to higher cash prices is also encouraging. A few bids are currently being offered but at this point feedlots have yet to jump on the offers. Bids of $179 to $181 are currently being offered in Nebraska and a bid of $179 is currently being offered in Texas. It's tough telling how this week's cash cattle market will pan out as feedlots' showlists are lighter, and they could elect to let this week's market pass by without moving many cattle and then reoffer their pens next week after the holiday is over and when packers are likely to be more aggressive in the market. However, trade could just as easily develop at steady to slightly lower prices as packers want to keep their inventory somewhat padded to avoid having to overly support in one of the upcoming weeks. August live cattle are up $0.75 at $173.27, October live cattle are up $0.37 at $176.45 and December live cattle are up $0.10 at $180.27.

Boxed beef prices are lower: choice down $1.08 ($328.15) and select down $0.44 ($297.99) with a movement of 60 loads (32.56 loads of choice, 9.59 loads of select, 9.74 loads of trim and 8.22 loads of ground beef).

FEEDER CATTLE:

With the nearby corn contracts trailing yet another $0.10 lower Wednesday morning, the feeder cattle contracts are again taking the opportunity to trade higher. August feeders are up $0.50 at $239.00, September feeders are up $0.52 at $242.50 and October feeders are up $0.50 at $244.82. Demand remains extremely strong throughout the countryside for feeders, and with the initial purchase price of the animals significantly higher than years past, buyers are seeing the corn market's weakness as some relief as they're able to figure better breakeven projections with cheaper feed.

LEAN HOGS:

It's not surprising to see that the day before the Quarterly Hogs and Pigs report comes out that the lean hog market is still trading gingerly as traders eagerly look forward to seeing Thursday's USDA report unveiled. Cash prices are higher but the day's volume of hogs traded is still relatively thin, and pork cutout values are lower. Packers could be less aggressive in this week's market as they're looking at multiple days ahead of them with a reduced kill schedule as the 4th of July quickly approaches. July lean hogs are up $0.25 at $94.37, August lean hogs are up $0.22 at $91.27 and October lean hogs are down $0.10 at $79.67.

The projected lean hog index for June 27 is up $0.44 at $92.96, and the actual index for June 26 is up $0.41 at $92.52. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.04 with a weighted average price of $93.50, ranging from $83.00 to $96.00 on 2,228 head and a five-day rolling average of $93.67. Pork cutouts total 129.95 loads with 118.09 loads of pork cuts and 11.86 loads of trim. Pork cutout values: down $2.97, $97.19.

Wednesday Morning Livestock Market Update - Feeder Cattle May See Further Support

GENERAL COMMENTS:

There was light cash cattle trade in Kansas at $178 with some in Texas at $178.50. The volume traded was too light to indicate whether this sets the stage for cash the rest of the week. Packers are going to use boxed beef weakness and seasonal fundamentals to their advantage. Boxed beef prices were lower again Tuesday with choice down $3.81 and select down $1.24. Feedlots might be willing to pass on lower bids due to potential further weakness of corn prices. The market digested the Cattle on Feed report and, so far, viewed it of little consequence due to lighter cattle supplies throughout the country. Feeder cattle gapped open Tuesday and never looked back. This leaves the island bottom intact, providing more confidence to bullish technical traders. Buyers continue to look for feeder cattle with strong prices reported at auctions.

Hog fundamentals certainly were not bearish Tuesday as both cash and cutouts were higher. Packers still need to purchase more hogs and may be aggressive again today. The National Direct Afternoon Hog report showed cash up $1.54. Cuts posted a gain of $0.61, keeping the trend of higher cutouts intact. Spread trading was evident in futures as traders began looking ahead to the Quarterly Hogs & Pigs report. It was interesting to see that April 2024 and later contracts posted triple-digit losses as traders seemed to think futures were too high and light trading volume magnified price movement.

	BULL SIDE		BEAR SIDE
1)	Weakness in corn provided support to feeder cattle with corn showing further weakness overnight.	1)	Boxed beef prices continue to trend lower on slower demand. This may keep packers less aggressive in the cash market.
2)	Feedlots may be in the position to pass on bids this week, causing packers to become more aggressive as they need to purchase cattle to maintain slaughter pace.	2)	Feeder cattle futures now have two gaps below the market that may be closed at some point once the exuberance runs its course.
3)	Cash hogs and pork cutouts continue to trend higher, providing support to hog futures. Markets should be stronger Wednesday as traders react to higher cash and cutouts.	3)	The upcoming Hogs & Pigs report may reduce the ability of futures to increase as traders position themselves ahead of the report.
4)	The Hogs & Pigs report is expected to show a decline in hogs kept for breeding.	4)	There is still some confusion as to the implications and policies of Prop 12 as the calendar turns to July. This may limit upside potential.

Tuesday Closing Livestock Market Update - Cheaper Corn Prices Propel Cattle

GENERAL COMMENTS:

The livestock complex rounded out the day mixed as both the live cattle and feeder cattle contracts were able to close higher thanks to cheaper corn prices, but the lean hog complex had a more cautious approach to Tuesday's markets. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.54 with a weighted average price of $94.51 on 6,208 head. December corn is down 27 1/4 cents per bushel and December soybean meal is down $13.50. The Dow Jones Industrial Average is up 212.03 points.

LIVE CATTLE:

The live cattle complex saw the weakness in today's corn market and elected to take advantage of the opportunity to trade higher although boxed beef prices are still trending lower and not much action has been seen in the cash cattle complex. August live cattle closed $1.90 higher at $172.50, October live cattle closed $2.05 higher at $176.07 and December live cattle closed $1.80 higher at $180.17. The market is far from nearing any immediate pressure so so long as traders stage engaged and remain confident, there's room to trade higher. A light trade was reported in Kansas at $178 which is $2.00 lower than last week's market, but not many have traded so don't put too much clout in that early price sighting. Southern asking prices remain firm at $182 and asking prices in the North still remain elusive. Trade could be delayed until the second half of the week, but feedlots could also elect to roll this week's showlist over to next week when packers are prone to be more eager in the market and will likely be willing to pay higher prices as the long holiday weekend would be behind them. 

Tuesday's slaughter is estimated at 126,000 head -- 1,000 head less than a week and a year ago.

Boxed beef prices closed lower: choice down $3.81 ($329.23) and select down $1.24 ($298.43) with a movement of 147 loads (80.27 loads of choice, 35.40 loads of select, 14.03 loads of trim and 17.07 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady. It's tough telling what this week's cash cattle market will do as packers look at multiple days ahead of them with reduced kill schedules, but know all too well that front-end supplies of cattle are still incredibly thin.

FEEDER CATTLE:

"Ready, set run" seemed to be the approach the feeder cattle complex deployed throughout Tuesday's market as the contracts closed $3.00 to $4.00 higher. The market was fueled and motivated by the extreme descent in corn prices, which rounded out the day $0.14 to $0.27 lower. The spot August contract gapped higher but still remains far enough away from resistance pressure to have plenty of more upside potential this week if corn prices remain depressed. August feeders closed $4.82 higher at $238.50, September feeders closed $4.47 higher at $241.97 and October feeders closed $4.22 higher at $244.32. At the Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week feeder steers traded $3.00 to $8.00 higher with instances of $15.00 higher. Feeder heifers sold $2.00 to $5.00 stronger. Steer calves sold $4.00 to $8.00 lower, although the 400 to 500 weights traded steady. Heifer calves sold $4.00 to $6.00 lower. Feeder cattle supply over 600 pounds was 70%. The CME feeder cattle index 6/26/2023: up $3.52, $224.97.

LEAN HOGS:

The lean hog contracts danced throughout Tuesday's trade seeming reluctant to do much of anything which then led to the market's mixed end with the nearby contracts keeping a positive gain ahead of closing, but the deferred contracts weren't as lucky. July lean hogs closed $0.72 higher at $94.12, August lean hogs closed $1.00 higher at $91.05 and October lean hogs closed $0.45 lower at $79.77. By the day's end, the cash hog market did see more interest as both today's volume and price were higher than Monday's, although in the grand scheme of things, today's movement was still thin. Pork cutout values are unavailable on the Daily Direct Pork Cutout report due to packer submission issues. Tuesday's slaughter is estimated at 466,000 head -- 3,000 head less than a week ago and 20,000 head more than a year ago. The CME lean hog index 6/23/2023: up $0.70, $92.11.

WEDNESDAY'S HOG CALL: Higher. Today's prices were higher, but with packers only buying close to 6,000 head, they'll need to procure more hogs before the week is over.

Tuesday Midday Livestock Market Summary - Cheaper Corn Drivers Feeders Sharply Higher

GENERAL COMMENTS:

The cattle complex is trading higher as cattlemen love the onset of cheaper corn prices, especially in the feeder cattle market world. The lean hog market is trading mixed with the market's nearby contracts trading mildly higher but the deferred contracts are trading lower as traders want to see what Thursday's Quarterly Hogs and Pigs report holds before they support the market much more. December corn is down 30 1/2 cents per bushel and December soybean meal is down $8.70. The Dow Jones Industrial Average is up 154.50 points.

LIVE CATTLE:

The live cattle complex is trading higher as sharply lower corn prices alleviate some pressure. The cash cattle market hasn't seen any ounce of interest yet this week and it's looking like significant business could be delayed until the second half of the week. Showlists are lighter this week which bodes well for feedlots as they try to hold the market as close to steady as possible. August live cattle are up $1.42 at $172.02, October live cattle are up $1.52 at $175.55 and December live cattle are up $1.45 at $179.82. Boxed beef prices are seeing some seasonal pressure develop as retailers have already bought and stocked their coolers for the Fourth of July run and now prices are regressing. Packers will try to use this as a reason why cash prices should also fall, but feedlots aren't going to be easily pushed into selling cattle cheaper as they know that now is the time to push on the market when supplies are thin and leverage favors their position.

Boxed beef prices are mixed: choice down $1.08 ($331.96) and select up $0.29 ($299.96) with a movement of 74 loads (40.20 loads of choice, 23.22 loads of select, zero loads of trim and 10.29 loads of ground beef).

FEEDER CATTLE:

Grab onto your seats because keeping up with the dynamic back-and-forth nature of the corn/feeder cattle relationship is no easy task. With nearby corn prices tanking $0.10 to $0.28 lower, the feeder cattle complex is seeming to effortlessly rally $3.00 to $4.00 higher. August feeders are up $4.45 at $238.15, September feeders are up $4.15 at $241.62 and October feeders are up $3.87 at $243.97. The market's strength is undoubtedly stemming from the sharp decline in corn prices, but just know that, with the grain sector extremely volatile right now to weather changes, the feeder cattle market could be pressured later this week if corn prices happen to shoot higher. Until the corn crop grows more mature, it's a complex and volatile market to say the least.

LEAN HOGS:

The lean hog complex is trading mixed as its immediate contracts are trading slightly higher but its deferred contracts are trading lower. July lean hogs are up $0.40 at $93.80, August lean hogs are up $0.67 at $90.72 and October lean hogs are down $0.62 at $79.60. Some of the market's mixed, indecisive nature is likely stemming from the fact that traders are anxious about Thursday's Quarterly Hogs and Pigs report. With feed prices high and feeder pig prices lower, a reduction could be seen in breeding herd inventory, but only Thursday's report will know those full details.

The projected lean hog index for June 26 is up $0.41 at $92.52 and the actual index for June 23 is up $0.71 at $92.11. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.40 with a weighted average price of $92.46, ranging from $83.00 to $94.00 on 442 head and a five-day rolling average of $95.18. Pork cutouts total 177.15 loads with 160.84 loads of pork cuts and 16.31 loads of trim. Pork cutout values: up $0.75, $100.30.

Tuesday Morning Livestock Market Update - Lower Corn to Influence Cattle Futures

GENERAL COMMENTS:

Cattle held up well despite the bearish implications of placements in the Cattle on Feed report. Even though more cattle may be available over time, the here and now continues with tight cattle numbers. However, recently lower cash and decreasing boxed beef prices may temper further upside gains for the near term. Packers are expected to reduce bids this week, using the trend of lower boxed beef and the higher placement number as leverage. Boxed beef prices declined Monday with choice down $0.97 and select down $0.29. No cash business is expected to take place Tuesday. Feeder cattle were mixed Monday with closer months lower and later months higher. Futures are expected to be higher Tuesday due to the decline of corn price overnight despite a 5% decline of crop ratings. There remains strong demand for feeder cattle at auctions with steady to higher prices still being paid.

Hogs showed another strong day with July leading the charge as it focuses on cash with 2 1/2 weeks to expiration. The National Direct Afternoon Hog report showed cash down $0.07. Earlier in the day, the midday report showed cash up $4.40, which provided support to the market. Packers are expected to remain aggressive Tuesday as they look to procure hogs ahead of the July 4th week. Cutout values gained $2.19 Monday, which should provide some support for Tuesday. The market may be tempered somewhat as traders look ahead to the Quarterly Hogs & Pigs report Thursday after the close.

	BULL SIDE		BEAR SIDE
1)	Lower corn futures overnight should provide support to feeder cattle as the correlation is generally traded.	1)	Feeder cattle have a chart gap remaining below the market from last week that may be filled before the market can trend higher.
2)	Current cattle supplies remain tight and another week of lower cash may be difficult for packers to achieve.	2)	Cash cattle uncertainty may leave futures sideways until business takes place.
3)	Hogs are supported as fundamentals have changed. The Hogs & Pigs report is expected to show lower breeding numbers, which may eventually tighten supplies.	3)	Traders may position themselves ahead of the Hogs & Pigs report due Thursday, which may put some pressure on the market as long positions may be liquidated.
4)	Higher cutouts Monday should result in higher futures as the strength or weakness of cutouts generally influences the market the following day.	4)	Hog futures could not hold the highs Monday, which could make it more difficult to break through those highs ahead of Thursday's report.

Monday Closing Livestock Market Update - Hogs Rally Through Monday's End; Cattle Remain Cautious

GENERAL COMMENTS:

The cattle contracts closed mixed as traders continue to monitor the corn complex closely, but the lean hog complex was able to round out the day fully higher. Hog enthusiasts are especially anxious to see what Thursday's Quarterly Hogs and Pigs report unveils as it could provide some insight into pork supplies. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.07 with a weighted average price of $92.97 on 1,616 head. December corn is up 1/4 cent per bushel and December soybean meal is up $0.60. The Dow Jones Industrial Average is down 12.72 points.

LIVE CATTLE:

The live cattle complex closed mixed with the vast majority of the market's nearby contracts closing lower while the deferred contracts closed higher. As traders appraised the marketplace on Monday, they remained semi-hesitant as they don't know what to expect of cash prices this week and as the corn complex remains extremely volatile. But at the same time, showlists are lighter this week and even though boxed beef prices are seeing some seasonal pressure, prices are still incredibly high and demand remains strong. August live cattle closed $0.17 lower at $170.60, October live cattle closed $0.47 lower at $174.02 and December live cattle closed $0.32 lower at $178.37. No bids or asking prices were listed throughout the day and trade is expected to be delayed until Wednesday or later. New showlists appear to be lower in all major feeding states. Friday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago but steady with a year ago.

Last week a light trade took place Tuesday through Thursday, with just a little cleanup on Friday. Southern live deals were marked at $174 to $182, mostly $180, $2 lower than the prior week's weighted averages. Northern dressed deals had a full range of $280 to $292, mostly $290, $6 lower than the previous week's weighted averages. Last week's negotiated cash cattle trade totaled 79,149 head. Of that, 73% (57,888 head) were committed to the nearby delivery while the remaining 27% (21,261 head) were committed to the deferred delivery.

Boxed beef prices closed lower: choice down $0.97 ($333.04) and select down $0.29 ($299.67) with a movement of 82 loads (40.13 loads of choice, 21.08 loads of select, 9.29 loads of trim and 11.52 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady. Packers have successfully worked cash prices lower over the course of the last two weeks, but showlists are lighter this week and feedlots may be able to hold prices steady if they remain determined.

FEEDER CATTLE:

Even though the nearby feeder cattle contracts closed steady to $0.06 higher, the feeder cattle complex closed mixed with the market's nearby contracts enduring slight losses while the deferred contracts closed modestly higher. Given the fact that last Friday's COF report showed a higher-than-expected volume of placements in May than what analyst's anticipated, and that corn prices closed higher, it's commendable that feeders were able to close higher at all. But as traders and cattlemen alike view the marketplace, it seems as though they're finding more value in the market's fundamentals and continue to believe that the 2023 bullish cattle market has more in store for prices despite the fact that some seasonal pressure is building. August feeders closed $0.27 lower at $233.67, September feeders closed $0.20 lower at $237.50 and October feeders closed $0.05 lower at $240.10. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers at their midsession point were selling $5.00 to $10.00 higher and feeder heifers were selling steady. Feeder cattle supply over 600 pounds was 72%. The CME Feeder Cattle Index for June 23: unavailable at this time.

LEAN HOGS:

The lean hog complex had a tremendous day as the market's contracts were able to close higher and pork cutout values closed $2.19 higher by the day's end. The market is anxiously awaiting to see what Thursday's Quarterly Hogs and Pigs report unveils as it could help provide some insight into what pork supply the market could expect in the months ahead. The biggest contributor to Monday's higher carcass close was the butt cut as it rounded out the $6.83 higher, but then was closely followed by the rib which gained $5.26. The cash side of the market lent little support as very few hogs traded. July lean hogs closed $2.12 higher at $93.40, August lean hogs closed $0.37 higher at $90.05 and October lean hogs closed $0.25 higher at $80.22. Pork cutouts totaled 258.37 loads with 233.76 loads of pork cuts and 24.62 loads of trim. Pork cutout values: up $2.19, $99.55. Friday's slaughter is estimated at 440,000 head, 19,000 head more than a week ago and 20,000 head more than a year ago. The CME Lean Hog Index for June 22: up $0.94, $91.41.

TUESDAY'S HOG CALL: Steady to somewhat higher. Given that Monday's cash market saw very few hogs traded, it's likely that Tuesday's market sees a bigger volume.

Monday Midday Livestock Market Summary - Hogs Head Higher

GENERAL COMMENTS:

The cattle complex is trading mixed as cautious, hesitant tones dominate the sector. The lean hog contracts are being the most aggressive as Monday's noon hour approaches, but the cattle contracts aren't as confident as corn prices have been extremely volatile. December corn is down 1 1/2 cents per bushel and December soybean meal is down $0.90. The Dow Jones Industrial Average is up 44.16 points.

LIVE CATTLE:

The live cattle complex is trading mixed as traders wonder what this week's cash cattle market will amount to. Over the last two weeks, cash prices have regressed, and now the market is seeing some additional pressure from weaker box prices. And while we seasonally expect to see a dip in box prices during this time, it still plays well into packer's position as they desperately want to regain leverage in the cash cattle complex. August live cattle are up $0.02 at $170.80, October live cattle are down $0.25 at $174.25 and December live cattle are down $0.07 at $178.62. No asking prices or bids have been listed at this point, and the week's cash cattle trade won't likely develop until Wednesday or later.

Last week a light trade took place Tuesday through Thursday, with just a little cleanup on Friday. Southern live deals were marked at $174 to $182, mostly $180, $2 lower than the prior week's weighted averages. Northern dressed deals had a full range of $280 to $292, mostly $290, $6 lower than the previous week's weighted averages.

Boxed beef prices are lower: choice down $1.35 ($332.66) and select down $0.26 ($299.70) with a movement of 34 loads (16.92 loads of choice, 6.20 loads of select, 5.17 loads of trim and 5.89 loads of ground beef).

FEEDER CATTLE:

With Friday's COF report showing a greater placement number than expected, and with nearby corn prices trading anywhere from $0.01 lower to $0.13 higher, it's commendable that the feeder cattle contracts are holding up as good as they are. The market flirted with the idea of trading lower earlier in the day, but as the noon hour quickly approaches, the feeder cattle contracts are now trading higher. August feeders are up $0.25 at $234.10, September feeders are up $0.12 at $237.82 and October feeders are up $0.07 at $240.22.

LEAN HOGS:

Last week's late descend is helping the lean hog contracts trade higher Monday morning as traders aren't up against immediate resistance pressure. The lean hog market is however trading noticeably higher as it's nearby contracts trend anywhere from $1.00 to $2.00 stronger as the noon hour nears. I'd be surprised to see the market push beyond the resistance at $95.00 before seeing what Thursday's Quarterly Hogs and Pigs report unveils as there's a good chance that the breeding herd inventory sees a reduction, but we know not to put the horse before the cart when it comes to USDA report. Cash hog prices are up over $4.00 higher this morning, but only a lousy 397 head have traded. July lean hogs are up $2.65 at $93.92, August lean hogs are up $1.62 at $91.30 and October lean hogs are up $1.00 at $80.97.

The projected lean hog index for June 23 is up $0.71 at $92.11 and the actual index for June 22 is up $0.94 at $91.41. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.40 with a weighted average price of $92.06, ranging from $84.00 to $94.00 on 397 head and a five-day rolling average of $95.06. Pork cutouts total 149.18 loads with 132.66 loads of pork cuts and 16.52 loads of trim. Pork cutout values: up $1.25, $98.61.

Monday Morning Livestock Market Update - Pressure Expected on Cattle Futures

GENERAL COMMENTS:

Live cattle traded mixed Friday as the second week of lower cash trade did not lend itself to a rebound of futures. This may leave traders cautious Monday as the uncertainty of cash and the volatility of corn may keep futures mixed. However, the bearish implication of the Cattle on Feed report might have the upper hand with traders selling more aggressively. May placements were quite a bit higher than the trade expected. Expectations were for placements at 101.7% of a year ago with the report showing them at 105.0%. That is bearish for the market and could result in futures gapping lower on the open. On-feed numbers were 97.0% compared to the estimate of 96.8%. Marketings in May were 102.0% compared to the estimate of 101.6%. Packers may bid lower this week using the report and boxed beef weakness as leverage. Boxed beef on Friday showed choice down $0.46 and select down $3.84. Feeder cattle reacted positively to the pressure on corn posting triple-digit gains, but there may be no follow-through in reaction to the Cattle on Feed report. The Commitment of Traders report showed funds trimming their long position by 8,999 contracts, bringing their net-long futures position to 111,401 contracts. Feeder cattle showed funds selling 3,003 contracts, bringing their net-long positions to 15,695.

Hogs closed mixed Friday as the market coasted into the weekend. The delay in the implementation of Prop 12 for six months was somewhat anticipated and now is a reality kicking that can down the road a bit. This allows the market to focus on fundamentals for the time being and they have been more positive. Increasing cash and higher cutouts have provided support. Packers should be more aggressive again early this week. Traders will be looking ahead to the Quarterly Hogs & Pigs report Thursday, which could temper some trade exuberance. Cutouts were higher with a gain of $0.86 on Friday. The Commitment of Traders report showed funds purchasing 13,665 futures contracts, bringing net futures position to a net long of 7,819 contracts.

	BULL SIDE		BEAR SIDE
1)	Cattle futures may have lower cash already factored in, which may leave the market mixed this week.	1)	The Cattle on Feed report was bearish with placements much higher than the trade estimated.
2)	Feeder cattle left a chart gap Frida, creating a small island bottom which is positive technically.	2)	Lower cash cattle are expected again this week as demand seems to have slowed with boxed beef showing weakness.
3)	Funds have changed to a net-long futures position, providing confidence to traders to buy into the market.	3)	The upcoming Hogs & Pigs report Thursday may temper trade this week as traders position themselves ahead of it.
4)	Tighter hog supplies and better demand are providing support to the market.	4)	Hog futures still may need to correct further to relieve the overbought market.

Friday Closing Livestock Market Update - Cheaper Corn Drives Complex Higher

GENERAL COMMENTS:

For the most part, Friday's market treated the livestock complex favorably as the contracts closed mostly higher. Come Monday, we will see how traders view Friday's Cattle on Feed report, which showed greater placements than expected. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.75 with a weighted average price of $93.04 on 2,096 head. December corn is down 32 3/4 cents per bushel and December soybean meal is down $17.70. The Dow Jones Industrial Average is down 217.07 points.

From Friday to Friday, livestock futures scored the following changes: June live cattle down $0.85, August live cattle down $0.95; August feeder cattle down $0.97, September feeder cattle down $0.47; July lean hogs down $1.57, August lean hogs down $1.00; July corn down $0.09, September corn down $0.09.

Friday's Cold Storage report shared that total red meat supplies in freezers were down 7% from last month and down 11% from a year ago. Total pounds of beef in freezers were down 6% from last month and down 20% from a year ago. Frozen pork supplies were down 7% from a month ago and down 4% from last year. Stocks of pork bellies were up 2% from last month and up 46% from last year.

LIVE CATTLE:

The live cattle complex mostly rallied Friday with just a few of the nearby contracts closing lower as traders grew hesitant about support the nearby contracts when cash prices are trading lower and ahead of the afternoon's Cattle on Feed report. August live cattle closed $0.37 lower at $170.77, October live cattle closed $0.17 lower at $174.50 and December live cattle closed $0.02 higher at $178.70. The cash cattle market had most of its business done ahead of Friday's trade. Throughout the week, Northern cattle traded for mostly $290, which is $6.00 lower than last week's weighted average and Southern live cattle traded for mostly $180 which is $2.00 lower than last week's weighted average.

Beef net sales of 13,300 mt for 2023 were up 4% from the previous week but down 14% from the prior four-week average. The three largest buyers were China (4,700 mt), Japan (2,900 mt) and South Korea (1,900 mt).

Friday's slaughter is estimated at 120,000 head, 2,000 head more than a week ago and 2,000 head less than a year ago. Saturday's slaughter is projected to be around 26,000 head. This week's slaughter is estimated at 649,000 head, 15,000 head more than a week ago and 16,000 head less than a year ago.

Boxed beef prices closed lower: choice down $0.46 ($334.01) and select down $3.84 ($299.96) with a movement of 78 loads (34.95 loads of choice, 26.53 loads of select, zero loads of trim and 17.00 loads of ground beef).

MONDAY'S CATTLE CALL: Lower. Given that cash cattle prices have traded lower now over the last two weeks, packers will likely use the market's weaker tone in boxed beef prices as a talking point as to why cash prices should continue to trade lower. To avoid being short bought packers will still need to support the market to some degree, however.

FEEDER CATTLE:

The feeder cattle complex ran wildly through Friday's end as the market saw the corn complex's weakness as its opportunity to rally. August feeders closed $3.27 higher at $233.95, September feeders closed $3.17 higher at $237.70 and October feeders closed $2.97 higher at $240.15. It was a back-and-forth week for feeders as they had to react to the various changes in corn prices, and early next week traders will have to come to terms with today's Cattle on Feed report, which showed larger placements than expected. 

The Oklahoma Weekly Cattle Auction Summary shared that compared to last week feeder steers traded $5.00 to $10.00 lower while feeder heifers sold $4.00 to $8.00 lower. Steer and heifer calves traded steady to $2.00 higher. Slaughter cows sold steady to $3.00 higher while slaughter bulls sold steady to $5.00 lower. Feeder cattle supply over 600 pounds was 69%. The CME Feeder Cattle Index for June 22: down $0.73, $221.00.

LEAN HOGS:

The nearby lean hog contracts grew skeptical of closing higher ahead of Friday's end, but that didn't damper the morale in the deferred contracts. July lean hogs closed $0.57 lower at $91.27, August lean hogs closed $0.30 lower at $89.67 and October lean hogs closed $0.12 higher at $79.97. Pork cutout values closed higher, which always helps the morale of the market. The gains seen in the various cuts were all fairly significant as they worked to offset the $10.66 drop in the rib, and the $4.29 drop in the ham. The loin jumped $4.37, the butt jumped $6.79, the picnic jumped $2.17 and the belly gained $2.00. Next week will be a big one for the lean hog complex as Thursday is set to release the newest Quarterly Hogs and Pigs report. With feed prices high and producers knowing the implications of Prop 12 coming down the pike, the report could unveil a smaller breeding inventory. Pork cutouts totaled 197.10 loads with 173.51 loads of pork cuts and 23.59 loads of trim. Pork cutout values: up $0.86, $97.36. Friday's slaughter is estimated at 452,000 head, 3,000 head less than a week ago and 16,000 head more than a year ago. Saturday's slaughter is projected to be around 79,000 head. The CME Lean Hog Index for June 21: up $0.85, $90.47.

Pork net sales of 28,700 mt for 2023 were up 7% from the previous week and up 10% from the prior four-week average. The three largest buyers were Mexico (12,100 mt), Canada (5,000 mt) and South Korea (3,100 mt).

MONDAY'S HOG CALL: Steady. Given that pork cutouts have been hit and miss in regards to prices, packers could wait until midweek before they active support the cash market again.

Friday Midday Livestock Market Summary - Higher Tones Summarize Complex Thanks to Cheaper Corn

GENERAL COMMENTS:

Most of the livestock complex is trading higher into Friday's noon hour as the descent of corn helps alleviate some stress from the livestock sector. No new cash cattle trade has been reported and, at this point, it's looking like the week's business is essentially done with. December corn is down 32 3/4 cents per bushel and December soybean meal is down $19.00. The Dow Jones Industrial Average is down 174.67 points.

LIVE CATTLE:

The live cattle complex has just recently seen some opposition in the nearby contract, but the market's deferred months are still trading higher. Truthfully, I'm surprised to see the market trading as strongly as it is as cash prices were significantly lower this week in the North and as the market will see another Cattle on Feed report released later Friday afternoon. No new cash cattle trade has been reported, and it's looking like week's business is done with. Thus far throughout the week, Northern cattle have traded for mostly $290, which is $6.00 lower than last week's weighted average, and Southern live cattle have traded for mostly $180, which is only $2.00 lower than last week's weighted average. August live cattle are down $0.22 at $170.92, October live cattle are down $0.12 at $174.55 and December live cattle are up $0.07 at $178.75.

Beef net sales of 13,300 mt for 2023 were up 4% from the previous week but down 14% from the prior four-week average. The three largest buyers were China (4,700 mt), Japan (2,900 mt) and South Korea (1,900 mt).

Boxed beef prices are lower: choice down $0.01 ($334.46) and select down $2.90 ($300.90) with a movement of 60 loads (25.50 loads of choice, 21.24 loads of select, zero loads of trim and 13.37 loads of ground beef).

FEEDER CATTLE:

This time of year is especially tiring for the feeder cattle market. On one hand, you have great insight from large online feeder cattle sales that help indicate what fall feeder cattle prices could be but, on the other hand, the corn market is so closely tied to any and all developments in weather that chasing and reacting to its indecisiveness is enough to give anyone whiplash. However, as the nearby corn contracts plummet $0.26 to $0.31 lower, the feeder cattle contracts are seeing ample opportunity in today's market to continue to trek higher. Large the corn complex is trading lower as better chances of ran have been noted for Iowa and Illinois over the next week. August feeders are up $3.67 at $234.32, September feeders are up $3.65 at $238.17 and October feeders are up $3.50 at $240.67.

LEAN HOGS:

After closing lower both Wednesday and Thursday, the lean hog complex now has some upward trading ability before it runs into resistance pressure again. Traders see Friday's market as a stable environment to trade the hog complex higher in as corn prices are down sharply and as today's market won't likely run up against long-term resistance thresholds. July lean hogs are up $0.97 at $92.82, August lean hogs are up $0.92 at $90.90 and October lean hogs are up $0.40 at $80.25.

The projected lean hog index for June 22 is up $0.94 at $91.41, and the actual index for June 21 is up $0.85 at $90.47. Hog prices are lower on the Daily Direct Morning Hog Report, down $7.77 with a weighted average price of $87.66, ranging from $75.00 to $95.00 on 612 head and a five-day rolling average of $95.00. Pork cutouts total 111.19 loads with 98.09 loads of pork cuts and 13.10 loads of trim. Pork cutout values: down $1.81, $94.69.

Pork net sales of 28,700 mt for 2023 were up 7% from the previous week and up 10% from the prior four-week average. The three largest buyers were Mexico (12,100 mt), Canada (5,000 mt) and South Korea (3,100 mt).