GENERAL COMMENTS:
The futures complex struggled again throughout the day, and all three of the livestock markets closed lower. However, both the cash cattle and feeder cattle markets continue to be met with tremendous demand in the countryside. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.01 with a weighted average price of $94.12 on 11,106 head. July corn is up 6 cents per bushel and July soybean meal is down $1.20. The Dow Jones Industrial Average is up 168.59 points.
LIVE CATTLE:
It was another day where the live cattle complex virtually lived two lives: one life through the eyes on the traders who dumped the contracts lower and opted to ignore the fundamental strength of the market, and one life where the cash cattle complex rallied on, clinging to the momentum that it's built over the last six months. June live cattle closed $0.22 lower at $178.77, August live cattle closed $0.95 lower at $172.25 and October live cattle closed $0.92 lower at $174.70. Even so, feedlots in the South remained strong but did sell some a light movement of cattle for $185. Asking prices in the South remain firm at $186 to $190. More business will need to develop on Friday unless packers are going to go into next week short bought. Thursday's slaughter is estimated at 125,000 head, 2,000 head less than a week ago and steady with a year ago.
A light to moderate trade was reported in Nebraska and Iowa on Wednesday with dressed deals marked at mostly $300, $10 higher than last week's weighted averages, there were even a few head that sold as high as $304. Live sales in that area had a range of $189 to $191, $3 to $5 higher than last week's weighted averages. Just a handful of business has been reported in the South this week with a range of $180 to $184, $3 to $7 higher than last week's weighted averages.
Beef net sales of 12,800 mt for 2023 were down 29% from the previous week and 27% from the prior four-week average. The three largest buyers were Japan (3,900 mt), South Korea (3,900 mt) and Mexico (1,900 mt).
Thursday's actual slaughter data shared that, for the week ending May 27, steers averaged 883 pounds, down 3 pounds from last week. For the same week, heifers averaged 817 pounds, down 1 pound from last week.
Boxed beef prices closed higher: choice up $3.54 ($328.73) and select up $2.54 ($304.10) and with a movement of 109 loads (52.80 loads of choice, 24.44 loads of select, 3.90 loads of trim and 28.07 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to somewhat higher. Depending on how many cattle packers need, prices could very well turn higher (especially in the South) on Friday.
FEEDER CATTLE:
Higher corn prices sucked the momentum right out of the feeder cattle complex and ultimately was the reason why feeder cattle prices rounded out the day lower -- aside from the external pressure that plagued most of the livestock complex. Even so, traders again elected to take a cautious approach to Thursday's market as demand for feeders remains utterly incredible and as the cash cattle market continues to trek to higher price points. August feeders closed $0.45 lower at $238.65, September feeders closed $0.80 lower at $241.47 and October feeders closed $1.10 lower at $234.45. At Winter Livestock Auction in Pratt, Kansas, compared to last week and at their midsession point, feeder steers weighing 600 to 975 pounds sold steady, however the thin fleshed steers sold $10.00 to $12.00 higher. Feeder heifers weighing 500 to 800 pounds sold steady, but like the steers the thin fleshed heifers also sold $10.00 to $12.00 better. Feeder cattle supply over 600 pounds was 91%. The CME Feeder Cattle Index for June 7: up $2.92, $222.20.
LEAN HOGS:
Multiple sources reported Thursday morning on USDA's announcement to buy $50 million work of pork loin to help the industry has hog producers enduring potentially the worst production year ever recorded. The government's assistance will help some, but it's a long shot from solving all the market's problems. July lean hogs closed $0.27 higher at $87.20, August lean hogs closed $0.67 lower at $82.42 and October lean hogs closed $1.30 lower at $74.45. Pork cutout values did indeed close higher, and cash prices closed higher, both of which would have logically been factors that should have helped traders round out the day higher, but with outside pressures looming above the livestock complex, hog prices had no choice but to close lower. Thursday's slaughter is estimated at 459,000 head, 21,000 head less than a week ago and 14,000 head less than a year ago. Pork cutouts totaled 290.71 loads with 264.71 loads of pork cuts and 26.00 loads of trim. Pork cutout values: up $0.53, $85.68. The CME Lean Hog Index for June 6: up $1.18, $83.04.
Pork net sales of 25,500 mt for 2023 were up 13% from the previous week, but down 11% from the prior four-week average. The three largest buyers were Mexico (9,100 mt), China (8,100 mt) and Japan (3,200 mt).
FRIDAY'S HOG CALL: Steady to somewhat lower. Packers have been aggressive throughout all of the week, which likely means that they could opt out of Friday's market.
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