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.
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