GENERAL COMMENTS:
The cattle contracts again rallied throughout the day as traders were well supported by strong beef demand. The cash cattle market hasn't seen any trade develop and trade is likely delayed until late Thursday or Friday as feedlots will probably price their showlists higher.
Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.10 with a weighted average price of $88.73 on 4,889 head. July corn is down 5 cents per bushel and July soybean meal is down $1.60. The Dow Jones Industrial Average is up 349.89 points.
LIVE CATTLE:
With boxed beef prices again closing higher and seeing better seasonal consumer demand than in weeks past, the live cattle complex rallied through the day's end with ease. June live cattle closed $0.07 higher at $178.25, August live cattle closed $0.40 higher at $176.52 and October live cattle closed $0.35 higher at $179.70.
The market is threatening the upper side of its current trading range, putting traders in a position to either submit to current resistance levels or muster enough strength to break out of the current trading range and grind higher. Traders will likely remain hesitant to advance the market much beyond its current position until a trend in this week's cash cattle market is established. Asking prices are noted in the South at $186 to $187 but have not yet been published for the North. It's assumed that feedlots are going to bat for higher prices as they monitor beef demand and see box prices improve. Trade will likely be delayed until Friday.
Wednesday's slaughter is estimated at 124,000 head -- 1,000 head more than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed higher: choice up $2.38 ($306.77) and select up $0.49 ($294.31) with a movement of 109 loads (72.98 loads of choice, 14.95 loads of select, zero loads of trim and 20.73 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady to $1 higher. Packers will be reluctant to pay more for cattle as they're already working with thin margins. But when beef demand is strong, it's also a lost opportunity to not have enough product to send to retailers.
FEEDER CATTLE:
The feeder cattle complex rounded out the day mostly higher with only the soon-to-expire May 2024 feeder cattle contract closing lower as traders shift their interest to the August 2024 contract. May feeders closed $0.12 lower at $243.15, August feeders closed $0.20 higher at $255.87 and September feeders closed $0.32 higher at $256.95. The cash cattle market still hasn't seen enough trade develop to speak of any new trends for the week, but if the cash complex can sell cattle for steady to somewhat higher prices, it will be encouraging news for the feeder cattle complex. The market sits a month away from the first countryside video sales of the year, which will help give an idea of what producers can expect for prices this fall. The CME feeder cattle index May 14: up $0.04, $241.79.
LEAN HOGS:
The lean hog complex seemed somewhat braced throughout Wednesday's trade as the market was prepared to see lower pork cutout values by the day's end and Thursday's export report. Thankfully, pork cutout values did close higher, but still, the market expects Thursday's export report to be lackluster as seen in recent weeks. I thought the cash hog market would have seen more traded throughout the day (only 4,889 head were reported in the afternoon's report), but at the same time, it makes sense that packers have eased buying in the cash sector as they continue to monitor demand and consumer interest.
June lean hogs closed $0.82 lower at $97.50, July lean hogs closed $0.05 lower at $100.87 and August lean hogs closed $0.12 higher at $100.02. Pork cutouts totaled 262.28 loads with 226.56 loads of pork cuts and 35.72 loads of trim. Pork cutout values: up $0.19, $101.70. Wednesday's slaughter is estimated at 480,000 head -- 3,000 head more than a week ago and 14,000 head more than a year ago. The CME lean hog index May 13: down $0.07, $91.29.
THURSDAY'S HOG CALL: Steady to somewhat lower. Packers haven't been overly aggressive in this week's cash hog market. They will likely buy modestly Thursday but prices will remain steady or trade somewhat lower.
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