GENERAL COMMENTS:
The livestock complex is trading lower into Monday's noon hour as the market is merely tapping its foot, waiting to see what consumers do this week. Friday's WASDE report will be highly sought after by both hog producers and cattle enthusiasts as the industry's demand outlook is under question. June live cattle are up $0.20 at $176.875, August feeder cattle are down July corn is up 8 1/4 cents per bushel and July soybean meal is up $12.50. The Dow Jones Industrial Average is up 26.76 points.
LIVE CATTLE:
The live cattle complex may be trending lower at the week's start -- but there are some interesting strong fundamentals at play in the market already this week. To start, I do find it encouraging that boxed beef prices are higher, even though the midday movement is thin. In a normal year, during this time we'd expect to see the choice/select spread widen as consumers begin to pick up better cuts for their grilling occasions. And secondly, I find it extremely encouraging that last week's negotiated cash cattle trade totaled 92,693 head. This is incredibly impressive given that over 90,000 head traded the week before. Packers are running more aggressive slaughter speeds which means they need more cattle and thankfully feedlots have been able to sell their showlists for higher prices over the last two weeks. June live cattle are up $0.05 at $176.75, August live cattle are down $0.25 at $174.37 and October live cattle are down $0.17 at $177.87.
Last week Northern dressed cattle traded for mostly $295 which is $1.00 higher than the previous week's weighted average. Southern live cattle waited to trade until Friday, but the wait was worth the time as most live cattle in the South traded for $184 which is $2.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 92,693 head. Of that, 63% (58,165 head) were committed to the nearby delivery, while the remaining 37% (34,528 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $3.87 ($298.07) and select up $1.39 ($289.04) with a movement of 37 loads (22.16 loads of choice, 7.24 loads of select, zero loads of trim and 7.99 loads of ground beef).
FEEDER CATTLE:
With corn prices trending $0.07 to $0.10 higher in the nearby contracts, the feeder cattle market is rocked back on its heels as the day approaches noon. The feeder cattle complex has been the driving force behind the cattle market's upside in this recent move, so until the feeder cattle market finds some footing in this week's trade, or unless boxed beef sales strengthen quickly, weaker tones may be the theme of both the live cattle and feeder cattle contracts. May feeders are down $1.40 at $241.90, August feeders are down $1.57 at $253.20 and September feeders are down $1.42 at $254.35.
LEAN HOGS:
The lean hog complex is continuing to trade lower as the market is in dire need of consistent consumer support. Yes, midday pork cutout values may be up, but with the belly up $9.75 alone, the carcass price is liable to see some volatility as the belly has been wishy-washy. Friday's WASDE report is going to be highly sought after by hog producers as the report could give some direction to the market in the short term as traders are beginning to wonder if summer-time demand is going to amount to much. June lean hogs are down $0.92 at $98.02, July lean hogs are down $0.77 at $102.07 and August lean hogs are down $0.50 at $101.22.
The projected lean hog index is delayed from the source. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.10 with a weighted average price of $90.53, ranging from $87.50 to $95.00 on 1,538 head and a five-day rolling average of $90.69. Pork cutouts total 158.87 loads with 138.83 loads of pork cuts and 20.04 loads of trim. Pork cutout values: up $2.47, $100.59.
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