GENERAL COMMENTS:
The livestock complex rounded out the week on a strong note as all three of the markets were able to close higher. The cattle complex now looks to next week, wondering what cash cattle prices could do in the week ahead. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $4.82 with a weighted average of $81.76 on 3,992 head. July corn is up 16 1/2 cents per bushel and July soybean meal is down $3.60. The Dow Jones Industrial Average is up 701.19 points.
From Friday-to-Friday livestock futures scored the following changes: June live cattle up $9.08, August live cattle up $7.72; August feeder cattle up $7.97, September feeder cattle up $7.90; June lean hogs up $10.65, July hogs up $9.88; July corn up $0.05, September corn up $0.07.
LIVE CATTLE:
There are some blatant realities that I think we can all take away from this week's market: 1) Tight supplies and tremendous demand make for a dynamic rallying market that can surprise even the most seasoned market analysts; 2) When in a bull market, traders look to the market's fundamentals for direction; and 3) Without the cash cattle market, true price discovery would be hard to obtain.
Between the massive gains throughout the futures complex and the $7.00 to $9.00 rally in the cash cattle market -- the live cattle complex had one heck of a week. And as I sit back and begin to wonder what June may hold in store for the market, I can't help but be optimistic as demand remains utterly incredible and is helping keep packers engaged in the cash market. I find it surprising that packers renewed bids late Friday afternoon, which could mean they didn't get all the cattle they wanted bought this week. Could prices be higher yet again next week? Time will tell. June live cattle closed $1.52 higher at $176.42, August live cattle closed $0.52 higher at $172.90, and October live cattle closed $0.12 higher at $176.00. Throughout the week, Northern dressed cattle traded mostly at $292, which is $8.00 higher than last week's weighted average. Southern live cattle traded from $175 to $180, but mostly at $178 to $180, which is $7.00 to $9.00 higher than the previous week's weighted average.
Friday's slaughter is estimated at 124,000 head -- 6,000 head more than a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be around 67,000 head. This week's slaughter is estimated at 573,000 head -- incomparable to last week but 35,000 head less than a year ago.
Beef net sales of 18,100 metric tons (mt) for 2023 were down 1% from the previous week but unchanged from the prior four-week average. The three largest buyers were Japan (5,700 mt), South Korea (4,700 mt) and China (3,400 mt). Throughout the week choice cuts averaged $306.79 (up $5.43 from the previous week) and select cuts averaged $288.04 (up $4.45 from the previous week) and the week's total movement of cuts, grinds and trim totaled 519 loads.
Boxed beef prices closed higher: choice up $3.49 ($309.93) and select up $4.61 ($290.93) with a movement of 120 loads (68.06 loads of choice, 19.79 loads of select, 19.71 loads of trim and 12.03 loads of ground beef).
MONDAY'S CATTLE CALL: Higher. It's seeming as though packers didn't get all the cattle they needed bought this past week. If that is indeed the case, prices could be higher again next week.
FEEDER CATTLE:
It's pretty impressive that the feeder cattle complex was able to maintain a positive position ahead of closing given that corn prices rounded out the day 10 to 16 cents higher. The feeder cattle complex clung to the market's fundamentals and to the positive morale that continues to drive both cash cattle and live cattle prices higher as its stronghold to offset the pressure the corn market added Friday afternoon. August feeders closed $0.25 higher at $241.90, September feeders closed $0.05 higher at $245.00 and October feeders closed $0.02 higher at $247.00. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week feeder steers and heifers sold $3.00 to $8.00 higher. Steer calves sold $10.00 to $20.00 higher. Heifer calves traded $7.00 to $14.00 higher. Slaughter cows sold $1.00 to $2.00 higher, and slaughter bulls sold $2.00 higher. Feeder cattle supply over 600 pounds was 71%. The CME Feeder Cattle Index 6/1/2023: down $0.03, $208.04.
LEAN HOGS:
Traders leaned onto their own technical gains made earlier this week to justify trading the complex higher through Friday's end as the lean hog market's fundamentals weren't much help. So given the gains that traders were able to push through Friday's end, it really does make one wonder if a bottom has been found in the hog complex. June lean hogs closed $3.17 higher at $86.72, July lean hogs closed $2.60 higher at $84.65 and August lean hogs closed $2.27 higher at $82.30. Pork cutouts totaled 283.15 loads with 261.78 loads of pork cuts and 21.37 loads of trim. Pork cutout values: down $0.96, $84.72. Friday's slaughter is estimated at 471,000 head -- 19,000 head more than a week ago and 3,000 head less than a year ago. Saturday's slaughter is projected to be around 119,000 head. The CME Lean Hog Index 5/31/2023: up $0.10, $79.63.
Pork net export sales of 22,600 mt for 2023 were down 23% from the previous week and 36% from the prior four-week average. The three largest buyers were Mexico (9,300 mt), Japan (3,900 mt) and Canada (2,100 mt).
MONDAY'S HOG CALL: Lower. Given that pork cutout values closed lower Friday afternoon, I doubt packers will be overly aggressive in Monday's cash market.
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