Hot and dry forecasts across much of Corn Belt Thursday pushed most of the market focus on the aggressive rally in grain trade. Corn futures rallied 15 to 25 cents per bushel, while soybean prices posted aggressive gains from 40 to 57 cents per bushel. The concern that these weather patterns will significantly impact supply levels left many livestock trades content to remain on the sidelines through most of the session Thursday. Feeder cattle was most directly affected based on the relationship to the corn market, although minimum price movements seen in live cattle trade seemed to focus more on the limited but downward pressure put on prices over the last couple of days. Hog prices closed higher on the Daily Direct Afternoon Hog Report, down $0.94 with a weighted average price of $93.32 on 9,159 head. July corn is up 15 cents per bushel and July soybean meal is up $0.40. The Dow Jones Industrial Average is up 455.20 points.
LIVE CATTLE:Live cattle traders reverted to an observatory role Thursday with the most attention seen in nearly all other markets. Feeder cattle trade seemed to be the most impacted livestock market, but this was unable to gain significant interest in live cattle trades with nearby contracts limited to 10 to 22 cent gains by the end of the day. Aggressive double-digit gains in grain trade, and triple-digit gains in both crude oil and the Dow Jones Index seemed to be enough for most cattle traders to take an observation role for the time being. From a fundamental perspective, there is still significant attention on cash cattle prices and beef values, but for now, futures trade seem willing to hover in the current market range. Beef exports in the weekly export sales report were reported at 12,800 metric tons last week. This is unchanged from the previous week, with China listed as the top purchaser of U.S. beef for the week. June live cattle closed $0.12 higher at $177.57, August live cattle closed $0.10 higher at $171.07 and October live cattle closed $0.22 higher at $174.35.
Cash cattle activity is becoming more evident Thursday with light trade seen in Nebraska during the day. Trade was seen at $296 per cwt dressed basis which is generally $4 per cwt lower than last week. Bids are seen in the south at $178 per cwt, but still unable to get feeders to pull the trigger at this point. Asking prices remain at $186 per cwt in the South and $186 in the North on live basis, while dressed northern cattle have current asking prices of $298 to $300 per cwt. It is expected that more activity will be seen through the day Friday, although another round of active outside market moves may influence cash markets through the end of the week.
Thursday's slaughter is estimated at 126,000 head, 1,000 head more than a week ago and 1,000 head less than year ago.
Boxed beef prices closed higher: choice up $3.01 ($342.07) and select up $0.32 ($309.58) with a movement of 83 loads (53.87 loads of choice, 21.78 loads of select, no loads of trim and 7.36 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to Lower. The active gains in cash cattle prices over the last two weeks seem to have limited market movement given pressure in futures market and attention on outside market moves. The lion's share of cattle is still needing to be traded Friday, although the limited trade at lower money seen Thursday may carry more weight without renewed interest in live cattle futures.
FEEDER CATTLE:Feeder cattle futures took another tumble Thursday as traders were heavily influenced by the aggressive double-digit rally in grain futures. The focus on weather conditions through not only the Corn Belt, but most of the Midwest has created additional concerns of the cost of feeding these young cattle over the next several months. August feeder cattle led the market lower, with a $1.77 per cwt loss, with spot months falling over $9 per cwt in just over a week. The support still seen in live cattle futures and beef values gives little confidence to feeder cattle buyers at this point in the game where additional hot and dry weather may have a significant impact in overall production costs but also feed availability in the coming months. August feeders closed $1.77 lower at $234.12, September feeders closed $1.60 lower at $237.52 and October feeders closed $1.40 lower at $239.80. Cash feeder cattle trade seems to follow the trend seen through the week with overall price levels unevenly steady with a wide variation of price shifts seen based on current demand and availability. The weather conditions, drought monitor conditions and forecasts which had a significant impact in grain prices Thursday is also a major implication for the cash feeder cattle trade. The current availability of grass, hay and feed, mirrored by concerns about future feed availability is leaving both buyers and sellers on edge. The CME Feeder Cattle Index for June 14: down $0.57, at $227.68.
LEAN HOGS:Light to moderate pressure developed in July lean hog futures trade Thursday, with outside market moves having a direct impact on spot month contracts and overall noncommercial trader activity. August through December contracts were able to etch out light to moderate gains, although the overall direction of the market remains generally quiet during the last half of the week. These actively traded nearby contracts are trading at the highest levels in over a month with the focus on overall pork demand helping to bring additional buyers to the table. Pork exports last week bounced slightly higher from the previous week with 26,700 metric tons reported. Mexico was the largest purchaser of pork last week. July lean hogs closed $1.97 higher a $91.60, August lean hogs closed $0.62 higher at $90.30 and October lean hogs closed $0.35 higher at $80.22. Pork cutouts totaled 327.65 loads with 306.70 loads of pork cuts and 20.95 loads of trim. Pork cutout values: up $1.16, $90.89. Thursday's slaughter is estimated at 461,000 head, 2,000 head more than a week ago and 7,000 head less than a year ago. The CME Lean Hog Index for June 14: up $0.62, $86.87.
FRIDAY'S HOG CALL: Steady, Early cash hog calls are expected steady early Friday morning, as packers continue to focus on overall pork price levels and the availability to gain access to market-ready hogs through the end of the week and early next week. The bounce higher in pork cutout values could have a marginal impact on morning price levels Friday.
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