GENERAL COMMENTS:
It's another mixed day for the livestock complex with the cattle contracts trading mostly lower while the hog contracts are trading modestly higher thanks to some technical support. There are bids offered in the countryside for cash cattle, but still no business has developed.
July corn is up 9 3/4 cents per bushel and July soybean meal is up $3.80.
The Dow Jones Industrial Average is up 23.69 points.
Thursday's export report shared that beef net sales of 14,500 metric tons (mt) for 2024 were down 8% from the previous week and 11% from the prior four-week average. The three largest buyers were South Korea (6,000 mt), Japan (3,400 mt) and Mexico (1,400 mt). Pork net sales of 29,900 mt for 2024 were down 33% from the previous week but up 3% from the prior 4-week average. The three largest buyers were China (8,900 mt), Mexico (8,300 mt) and Japan (3,400 mt).
LIVE CATTLE:
The live cattle complex is continuing to trade lower as the market patiently waits to see what develops in the cash sector. There are bids of $184 offered in the South and live bids of $188 offered in the North, but still no cattle have traded. Asking prices for cattle in the South are firm at $187 to $188 and in the North at $305 to $306. The futures market may be trading slightly lower, but it's not likely feedlots will cave in early and let cattle trade lower without at least waiting for Friday to come around when packer interest could improve. Packers will attempt to get cattle bought cheaper, but feedlots are current, so they still hold most of the market leverage. June live cattle are up $0.22 at $182.00, August live cattle are down $0.60 at $177.27 and October live cattle are down $0.92 at $179.37.
Boxed beef prices are mixed: choice up $0.95 ($315.74) and select down $0.77 ($300.13) with a movement of 61 loads (43.19 loads of choice, 10.25 loads of select, zero loads of trim and 7.42 loads of ground beef).
FEEDER CATTLE:
Between the live cattle contracts trading lower and corn prices trading modestly higher, it comes as no surprise the feeder cattle contracts are also trading lower. But before you throw in the towel and begin to believe that the overall market is weakening, I'd encourage you to look at the CME Feeder Cattle Index as best represents buyer demand in the countryside. It's rather impressive that just last September the CME Feeder Cattle Index topped around $254, and that as of Wednesday afternoon the index closed at $250.86. Buyer demand is still incredibly strong and even though the futures complex is enduring some weakness, the market's fundamentals are still prevailing. August feeders are down $2.20 at $252.62, September feeders are down $2.40 at $253.80 and October feeders are down $2.57 at $254.57.
LEAN HOGS:
After closing sharply lower Wednesday afternoon, the lean hog complex is back to trading mostly higher Thursday. June lean hogs are steady at $91.12, July lean hogs are up $0.90 at $93.10 and August lean hogs are up $0.20 at $91.82. Export sales were modest for the market, but more than anything the market seems to be trading higher as trades have again found some technical support. Following Wednesday's lower close in pork cutout values, Thursday's cash market has seen packer interest sharply regress.
The projected CME Lean Hog Index for 6/5/2024 is down $0.14 at $91.92, and the actual index for 6/4/2024 is up $0.13 at $92.06. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality; however, we can see that only 761 head have traded and the market's five-day rolling average now sits at $87.09. Pork cutouts total 169.39 loads with 148.24 loads of pork cuts and 21.15 loads of trim. Pork cutout values: up $0.66, $100.97.
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