GENERAL COMMENTS:
The cattle complex pulled back ahead of Friday's close in preparation for the afternoon's Cattle on Feed report, but thankfully no bearish surprises were found there, and the market should be able to rally on its strong fundamentals again early next week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.63 with a weighted average price of $86.64 on 1,317 head. July corn is up 3/4 cent per bushel and July soybean meal is up $9.80. The Dow Jones Industrial Average is up 4.33 points.
From Friday-to-Friday livestock futures scored the following changes: June live cattle up $2.65, August live cattle up $2.07; August feeder cattle up $0.38, September feeder cattle up $0.90; June lean hogs down $2.22, July lean hogs down $2.82; July corn up $0.12, September corn up $0.12.
Friday's Cold Storage Report shared that total red meat supplies in freezers was up 4% from the previous month but down 9% from last year. Total pounds of beef in freezers were down 1% from the previous month and down 5% from last year. Frozen pork supplies were up 8% from the previous month but down 12% from the last year. Stocks of pork bellies were up 3% from last month but down 6% from last year.
LIVE CATTLE:
The live cattle complex closed mixed with the June and August 2024 contracts closing slightly higher while the rest of the complex closed modestly lower. The market seems to pull back modestly ahead of closing as traders have grown accustomed to doing so before the monthly Cattle on Feed reports are shared, but the June and August 2024 contracts didn't bother to do so as the market was elated by this week's strong performance in the cash cattle complex. Bids have been sitting on the table throughout the day, but at the time of this writing, no more cash cattle sales have been noted following what transpired on Thursday. Thus far this week Southern live cattle have sold mostly for $187 which is $1.00 higher than last week's weighted average, and Northern dressed cattle traded anywhere from $300 to $304 which is steady to $5.00 higher than last week's weighted average. Depending on where the week's weighted average falls in the Northern plains if the market averages $304, that's a new all-time high for the region. June live cattle closed $0.17 higher at $183.70, August live cattle closed $0.05 higher at $181.12 and October live cattle closed $0.12 lower at $183.95.
All in all, Friday's Cattle on Feed report should be viewed as bullish long-term given that on feed numbers were decreased, placements were less than a year ago and marketings were higher than a year ago. Click here to read DTN's Cattle on Feed comments:
Friday's slaughter is estimated at 117,000 head -- 15,000 head more than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 4,000 head. The week's total slaughter is estimated at 607,000 head -- 9,000 head more than the previous week and 18,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.61 ($310.45) and select up $1.64 ($301.72) with a movement of 107 loads (74.23 loads of choice, 13.80 loads of select, 7.57 loads of trim and 11.49 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. It's a coin toss on how next week's cash cattle market will trade as at some point packers will have enough supply around them that they won't have to support the cash sector, but pinpointing when that occurs exactly remains the question as packers also can't go without having enough product to market during this time when boxed beef prices are so high.
FEEDER CATTLE:
The feeder cattle complex pulled back ahead of Friday's close as traders were anxious to see the Cattle on Feed data. Thankfully the report came out as expected, so no bearish consequences should be in store for next week's market. August feeders closed $1.22 lower at $260.22, September feeders closed $0.97 lower at $261.75 and October feeders closed $0.77 lower at $262.55. Even though the futures complex closed lower, the feeder cattle market is still seeing ample demand as the CME feeder cattle index closed above $250 -- which shows how aggressively buyers are bidding on feeders to get their orders filled. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week steers and heifers over 700 pounds traded $4.00 to $9.00 higher and steers and heifers under 700 pounds sold steady to $2.00 higher. Slaughter cows sold steady to $3.00 higher and slaughter bulls traded steady. The CME feeder cattle index 5/23/2024: up $1.33, $250.14.
LEAN HOGS:
It was another painful week for the lean hog complex as the market is trading day in and day out, but simply not receiving the demand it years for. Some of the market's deferred contracts were able to close slightly higher, but the lack of demand kept the nearby contracts from closing higher. Pork cutout values did round out the day slightly higher -- but after a full week of mostly lower trading, the day's slight uptick in carcass price wasn't much support from the market. June lean hogs closed $0.25 lower at $94.27, July lean hogs closed $0.25 lower at $97.22 and August lean hogs closed $0.12 lower at $96.90. Pork cutouts totaled 227.53 loads with 207.08 loads of pork cuts and 20.45 loads of trim. Friday's slaughter is estimated at 451,000 head -- 17,000 head less than a week ago but 1,000 head more than a year ago. Saturday's slaughter is projected to be around 10,000 head. The CME pork cutout index 5/22/2024: down $0.05, $91.77. Pork cutout values: up $0.45, $99.14.
TUESDAY'S HOG CALL: Lower. Given that pork demand is still an issue, packers won't likely bid the cash market aggressively.
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