GENERAL COMMENTS:
June live cattle and May feeder cattle finished lower three out of five days this week, ending at their lowest closes in over two months as traders remain spooked by concerns of influenza in older dairy cattle. June lean hogs finished the week with their highest close in over a year as packers continued to bid up cash hogs.
For the Week:
April live cattle was down $6.75 and June live cattle were down $8.20. April feeder cattle were down $9.42 and May feeder cattle were down $10.52. April lean hogs were up $2.70 and June lean hogs were up $6.45. May corn was down 1 cent and December corn was down 3/4 cent.
LIVE CATTLE:
June live cattle closed down $3.80 at $172.05 Friday, the lowest close in over two months as traders continue to flee the long side of the markets ahead of the weekend. As mentioned in Friday's midday comments, if new headlines don't start feeding the bearish story soon, specs that fled the markets this past week may soon end up with bad cases of seller's regret. Yes, it is possible health officials could learn something more about the influenza not currently known. To date, however, this looks like a minor health concern offering no threat to the safety of the nation's milk or beef supply.
It does look like retailers turned away from beef this week as boxed beef prices showed significant drops. Friday afternoon's report from USDA showed choice boxed beef at $297.17, down $9.55 on the week and the lowest in over a month. Select prices fell to $294.70, down $8.73 cents on the week with a total load count of 136.
Also adding to this week's bearish pressures, cash trade was lower in the North, ranging from $295 to $298, $2 to $5 lower on the week. Southern trade was quiet until Friday when DTN learned reports of $184 in Kansas and Texas, $2 lower than last week. Keep in mind that cash prices were trading at record highs just two weeks ago. Most of the selling in the futures market has likely come from specs responding to the news about influenza and there seemed to be some panic in Friday's trade, ahead of the weekend.
So far in 2024, the slaughter pace for cattle is down 5.5% from a year ago, largely due to smaller numbers of cattle available. USDA estimated Friday's slaughter at 115,000, up from 98,000 on Good Friday a week ago. Thursday's weights for the week ending March 23 pegged dressed steers up 2 pounds to 924 pounds and heifers up 2 pounds at 850 pounds. With U.S. cattle and calf inventory at its lowest level since 1951 and cash prices not far from record highs, there is a bullish market trapped inside recent bird flu concerns, but it may take time to calm market fears, even if the news doesn't get worse from here.
MONDAY'S CATTLE CALL: Steady to lower with trade likely cautious early Monday.
FEEDER CATTLE:
May feeder cattle fell $5.70 to $238.17 Friday, finishing at their lowest close in over two months. Speculative selling ahead of the weekend was the likely driver of Friday's lower prices as there hasn't been much new to learn since Monday's report confirmed a dairy worker in Texas had avian influenza, tipped off by redness around the eyes. Summing up what we know, some older dairy cattle infected by highly pathogenic avian influenza (HPAI) have been confirmed in six states, three of the states being either Texas or cattle that came from Texas. So far, younger cattle and beef cattle in feedlots have not been infected but that could change as vets and health officials monitor the situation. To date, there is no reason to believe U.S. milk and beef supplies are not safe.
Technically speaking, Friday's new two-month low in May feeder prices is bearish and shows traders remain uncomfortable on the long side of the market. On Friday afternoon's cash side, the CME Feeder Index was quoted at $248.97 for Thursday, up $1.20 from a week ago and well above Friday's April close at $237.70.
LEAN HOGS:
June lean hogs opened higher Friday and didn't look back, closing up $2.90 at $107.90, another new one-year high, supported by more gains in the prices of cash hogs. USDA's afternoon report of nationally negotiated cash hog prices ended at $86.70 Friday, up $5.23 on the week and at its highest level since August 2023. USDA's swine formula price ended at $86.40, also at its highest price since August 2023. Both cash prices have seen significant gains in 2024 and are receiving much more attention from packers these days.
Friday afternoon's cut-outs ended down 40 cents at $97.75, but were up over $4.00 on the week, even after being hindered Friday by a $14.24 drop in the price of bellies. Cut-out values continue to maintain a comfortable margin above hog prices, a good sign of active retail demand. After Friday's close, USDA estimated 485,000 hogs were slaughtered, up from 442,000 on Good Friday a week ago. Year-to-date hog slaughter is up just 0.3% from a year ago.
The CME Hog Index was projected at $86.31 as of Thursday, up $1.71 on the week, but below the April futures price of 89.32 on Friday.
MONDAY'S HOG CALL: Steady in June hogs with traders possibly leery about prices near new one-year highs.
No comments:
Post a Comment