GENERAL COMMENTS:
It was another mixed day for the livestock complex as technically speaking the lean hog market found some support, but without much cash cattle trade having developed -- both the live cattle and feeder cattle markets closed lower. Packer interest will improve on Friday for the cattle sector, but it's anyone's call at this point who will win this week's battle in the cash cattle arena -- packers or feedlot managers. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.49 with a weighted average price of $86.23 on 946 head. July corn is up 12 3/4 cents per bushel and July soybean meal is up $3.30. The Dow Jones Industrial Average is up 78.84 points.
LIVE CATTLE:
As the market continues to wait for the cash cattle complex to trade, traders again elected to let the market drift lower through the day's end as they're still lacking sufficient support to comfortably trade the contracts higher. June live cattle closed $0.05 higher at $181.82, August live cattle closed $0.40 lower at $177.47 and October live cattle closed $0.65 lower at $179.65. Bids of $184 to $185 were offered throughout most of the day in the Southern Plains, and bids of $188 live were offered in Nebraska, but no Northern cattle sold throughout the day. There was a small handful of cattle traded in Kansas at $185, and even fewer cattle traded in Texas for $185 – which is $1.00 lower than last week's weighted average, but not enough cattle have traded at that price to say that the week's trend has been set. Asking prices remain firm for cattle left on showlists in the South at $187 to $188, and in the North at $305 to $306. Packers and feedlot managers will again go toe-to-toe this week as packers desperately want to pump the brakes on the cash market, but feedlots are current so they continue to hold substantial leverage.
Thursday's slaughter is estimated at 122,000 head -- 3,000 head less than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $1.42 ($316.21) and select down $0.07 ($300.83) with a movement of 121 loads (84.90 loads of choice, 22.64 loads of select, 3.57 loads of trim and 9.93 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. With the board trending lower and boxed beef prices being mixed, packers may be able to get more cattle bought at steady money this week.
FEEDER CATTLE:
The feeder cattle complex sank further and further throughout the day as the market reacted poorly to the corn market's slight rally, and from the lack of support from the live cattle and fed cattle markets. Unfortunately, the spot August contract gapped lower at the day's start and continued to trend lower from that point onward, leaving the market well below its 40-day moving average. But before you grow concerned about the market's overall well-being -- I'd encourage you to look at the CME feeder cattle index. Wednesday afternoon the CME feeder cattle index closed at $250.86 which is an extremely high price point given that the market's all-time high for the index was made just last September at $254. Overall demand from buyers remains incredibly strong as there simply aren't as many feeders to be had this year. The futures market may be under pressure, but the entire feeder cattle market is not, as evidenced by the strong feeder cattle demand in the countryside, and it's likely that this type of technical turmoil will follow the complex until August when the contract expires and prices much converge. August feeders closed $1.97 lower at $252.85, September feeders closed $2.10 lower at $254.10 and October feeders closed $2.20 lower at $254.95. The CME feeder cattle index for 6/5/2024: not available at this time.
LEAN HOGS:
Finally, the lean hog complex has again seemed to find some technical support as the market had little fundamental help in its mostly higher close Thursday afternoon. June lean hogs closed $0.05 higher at $92.15, July lean hogs closed $0.77 higher at $92.97 and August lean hogs closed $0.05 higher at $91.67. Yes, pork cutout values did close slightly higher, but the overall carcass prices were slightly skewed by the $5.00 jump in the belly. It was also disappointing, but expected given Wednesday's lower cutout close, that cash prices ended the day $2.49 lower and that only a scant 946 head traded. Pork cutouts totaled 315.05 loads with 276.81 loads of pork cuts and 38.24 loads of trim. Pork cutout values: up $0.38, $100.69. Thursday's slaughter is estimated at 470,000 head -- 7,000 head less than a week ago and 12,000 head more than a year ago. The CME lean hog index 6/4/2024: up $0.13, $92.06.
FRIDAY'S HOG CALL: Lower. It would appear that packers have already bought the hogs that they needed for the week and it's not likely that Friday's cash market sees much interest or support.
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