GENERAL COMMENTS:
The cattle contracts may have rounded out the day on a weaker note in the futures complex, but the cash cattle market achieved yet another victory as prices ranged anywhere from $1.00 to $5.00 higher. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.44 with a weighted average price of $88.27 on 1,679 head. July corn is up 2 3/4 cents per bushel and July soybean meal is down $1.50. The Dow Jones Industrial Average is down 605.78 points.
Thursday's export report shared that beef net sales of 21,500 metric tons (mt) for 2024 were up 42% from the previous week and 32% from the prior four-week average. The three largest buyers were China (5,800 mt), South Korea (5,100 mt) and Mexico 2,900 mt). Pork net sales of 26,300 mt for 2024 were up 24% from the previous week but down 3% from the prior four-week average. The three largest buyers were Mexico (10,300 mt), Japan (4,100 mt) and South Korea (2,600 mt).
LIVE CATTLE:
The futures complex may have cooled down ahead of Thursday's close, but thankfully feedlot managers continued to market their showlists and it paid dividends for them as early Northern sales have been marked at $304 -- which is $5.00 higher than last week's weighted average in Nebraska, and if the week's weighted average ends up being at $304, that's a new all-time high for dressed cattle trade. Southern live cattle have been lightly traded at $187 which is $1.00 higher than last week's weighted average. I have to applaud feedlot managers and their willingness to work the cash cattle market because it's in times like this, that true price discovery is achieved. Well done, friends, what a historic time to be living in!
June live cattle closed $0.65 lower at $183.52, August live cattle closed $0.60 lower at $181.07 and October live cattle closed $0.57 lower at $184.07. The board's performance may be frustrating to see today as one would expect that record-breaking cash cattle sales in the North should have a positive effect on the futures complex. But the Northern plains didn't begin to trade cattle until after the market was closed and traders noted the continued pressure on choice cuts which influenced their decision to turn the complex lower.
Thursday's slaughter is estimated at 122,000 head -- 2,000 head less than a week and a year ago.
Boxed beef prices closed mixed: choice down $2.33 ($309.84) and select up $0.47 ($300.08) with a movement of 114 loads (80.61 loads of choice, 14.40 loads of select, 8.96 loads of trim and 10.52 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Given that cattle have traded now in both regions, it's likely that the week's prices are set.
FEEDER CATTLE:
The feeder cattle complex slumbered through Thursday's end as the market was patiently waiting for some fundamental support to arise but with the Northern plains not trading cash cattle until after the day's closing bell, even the feeder cattle complex closed slightly lower this afternoon. August feeders closed $1.45 lower at $261.45, September feeders closed $1.02 lower at $262.72 and October feeders closed $0.87 lower at $263.32. The feeder cattle complex will likely rally again on Friday as the market will be encouraged by the strong sales in the cash cattle market. The only thing that could be holding traders back is the fact that the month's Cattle on Feed report will be released again tomorrow afternoon which always leaves traders on edge until they see the data. Thankfully the report is expected to showcase fewer numbers of cattle on feed, lighter placements and aggressive marketings so the report should bode well for the cattle complex. The CME feeder cattle index 5/22/2024: not available at this time.
LEAN HOGS:
Yet again, with domestic demand being less than hoped for, the lean hog complex closed lower. June lean hogs closed $0.87 lower at $94.52, July lean hogs closed $0.65 lower at $97.47 and August lean hogs closed $0.52 lower at $97.02. The cash hog market saw a little more support and prices did close slightly higher, but with less than 2,000 head having traded -- it's hard to say that that lent much support to the greater market. Unfortunately, lean hog prices closed lower again with the belly being the biggest reason why as it alone fell $5.01. Pork cutouts totaled 237.35 loads with 212.97 loads of pork cuts and 24.38 loads of trim. Pork cutout values: down $1.38, $98.69. Thursday's slaughter is estimated at 485,000 head -- 6,000 head more than a week ago and 16,000 head more than a year ago. The CME lean hog index: down $0.19, $91.82.
FRIDAY'S HOG CALL: Lower. Given that pork cutout values continue to trade lower, it's likely packers won't pay much attention to the cash sector.
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