Wednesday Midday Livestock Market Update - Futures Market Lags

GENERAL COMMENTS:

It's been a tough, slow start to the day for the livestock contracts as the market can't seem to summon any substantial support. The board's weakness is boding well for packers as they're aiming to get cattle bought cheaper this week, but at this point, feedlots aren't seeming concerned about the weaker bids and appear to be willing to sit and wait until better money rolls around. July corn is up 5 cents per bushel and July soybean meal is up $2.90. The Dow Jones Industrial Average is up 45.32 points.

LIVE CATTLE:

Packers are playing tough ball Wednesday morning as substantially lower bids have been thrown around. Showlists this week are larger in all major feeding states and packers are looking to drive prices lower as they've gotten some cattle committed for the deferred delivery. However, the question that's yet to be answered is: Do packers have enough cattle committed to wipe their hands of the market and hold out if feedlots won't accept these weaker bids? I tend to lean on the side of thinking not, as throughput has continued to run aggressively, and over the last two weeks, packers have had to jump at the cash market wildly to get the cattle that they've needed. As always, time will tell. August live cattle are down $1.75 at $173.55, September feeders are down $1.67 at $175.60 and October feeders are down $1.47 at $177.50. Some Southern cattle have traded at $138 in the South, which is $2.00 lower than last week, and bids of $230 to $237 are being offered in Nebraska, but thus far feedlots have yet to accept any of them.

The Fed Cattle Exchange Auction held Wednesday reported 9 lots, totaling 1,195 head of cattle. It was yet another week of which no cattle sold.

Boxed beef prices are lower: choice down $0.97 ($266.59) and select down $0.01 ($246.69) with a movement of 97 loads (60.72 loads of choice, 15.30 loads of select, 13.20 loads of trim and 7.76 loads of ground beef).

FEEDER CATTLE:

The grain market is attempting to regain some of what Tuesday's market threw away, but as the noon hour approaches, the corn market is trading convulsively and dancing on both sides of steady. Unfortunately, the feeder cattle contracts are trending lower as the market neglects to find the technical support it had Tuesday, and with the live cattle market trending lower too, a doggish tone has overcome Wednesday's futures market in the cattle complex. August feeders are down $1.55 at $173.75, September feeders are down $1.37 at $175.90 and October feeders are down $1.30 at $177.67.

LEAN HOGS:

The lean hog contracts haven't been able to keep with Tuesday's momentum and have seemed to stall out Wednesday. July lean hogs are down $0.52 at $112.20, August lean hogs are down $0.22 at $109.57 and October lean hogs are down $0.27 at $94.30. It's positive to see both cash and pork cutout values higher, and it's likely that cash prices stay elevated through the afternoon as packers look to gather up numbers, but the pork cutout value is a wildcard. Demand could be strong through the day's end, as retailers finalize any last-minute holiday buying needs, but prices have been tippy as late.

The projected lean hog index for June 21 is up $0.29 at $110.74, and the actual index for June 20 is up $1.29 at $110.45. Hog prices are higher on the Daily Direct Morning Hog Report, up $2.52 with a weighted average of $117.33, ranging from $112.50 to $124.50 on 4,520 head and a five-day rolling average of $115.88. Pork cutouts total 145.18 loads with 132.32 loads of pork cuts and 12.87 loads of trim. Pork cutout values: up $2.08, $112.94.

Wednesday Morning Livestock Market Update - Hogs May Show Further Gains

GENERAL COMMENTS:

Some of the exuberance that carried over from last week's jump in cash has been tempered as the prospect of a repeat of the same looks less likely. However, the $4.00 increase last week was a surprise, so anything is possible again this week. Packers are seeing higher showlists, which may provide them the confidence cattle can be purchased without much difficulty. The pace of cattle slaughter remains brisk, which keeps packers needing cattle. Feedlots may have higher showlists but lower grain prices may give them the confidence to hold for higher cash. Boxed beef prices were higher with choice up $1.06 and select up $0.31. Feeder cattle traders thrived on the lower grain prices, pushing futures significantly higher. That may be tempered a bit with mixed corn futures overnight.

Hogs could not be held back Tuesday as evidence of aggressive packer buying spread through the market. The final tally showed cash up $4.11 on the National Daily Direct Afternoon Hog report. However, cutouts were down $1.01, tempering some of the gains that could have been realized. However, the July contract put in the highest close since April 28. A negative aspect of the market is that slaughter pace continues to lag. There was a large revision to Monday's slaughter with the actual number being 18,000 less than initially stated.

	BULL SIDE		BEAR SIDE
1)	Live cattle are at a discount to cash which should provide support if cash is able to hold steady or higher this week.	1)	Live cattle contracts have a chart gap below the market and now so do feeder cattle. These gaps likely will be filled.
2)	August feeder cattle were the beneficiaries of lower corn futures. The corn crop is 70% good/excellent indicating the potential for a good crop and lower price.	2)	If cash cattle trade no better than steady this week, it may be a disappointment to the trade.
3)	Hog futures are poised to retest the highs of earlier this month. A break above those highs will bring in more fund buying interest.	3)	Hog slaughter continues to run below a year ago which is a concern. Tighter supplies with lower slaughter pace do not bode well for higher prices.
4)	Overall strengthening cutouts should continue to provide support to the market. Prices may fluctuate but the trend is higher.	4)	Hog futures are near technical resistance which may bring in sellers more aggressively once those levels are reached.

Tuesday Closing Livestock Market Update - Feeders Jump as Grains Tumble Lower

GENERAL COMMENTS:

The feeder cattle market took Tuesday by storm as the grain market's descend gave feeders an opportunity to rally. Meanwhile, the lean hog market closed higher too as the cash market jumped over $4.00 higher. Hog prices closed $4.11 higher on the Daily Direct Afternoon Hog Report, which leads to a weighted average of $118.99 on 7,930 head. July corn is down 23 3/4 cents per bushel and July soybean meal is down $6.80. The Dow Jones Industrial Average is up 641.47 points.

LIVE CATTLE:

The live cattle market rounded out the day mostly lower, but even with the day's weaker move, August live cattle still closed on the upper end of last week's sideways chop. June live cattle closed $0.20 lower at $137.82, August live cattle closed $0.32 lower at $136.25 and October live cattle closed $0.12 lower at $142.30. Showlists are higher in all major feeding regions this week, but even with more cattle becoming readily available, prices are expected to hold at least steady as packers still need cattle. There were a handful of fats traded in Texas for $138.50, but it was on so few of head that no real trend was established. More business should develop in Wednesday's market. 

Tuesday's slaughter is estimated at 126,000 head, 4,000 head more than a week ago and year ago. Monday's slaughter is estimated at 124,000 head, 4,000 head more than a week ago and 7,000 head more than a year ago.

Last week's negotiated cash cattle market totaled 107,080 head. Of that, 73% (78,001 head) were committed for nearby delivery, while the remaining 27% (29,079 head) were committed for deferred delivery.

Boxed beef prices are higher: choice up $1.06 ($267.56) and select up $0.31 ($246.70) with a movement of 143 loads (84.86 loads of choice, 37.13 loads of select, 13.46 loads of trim and 7.97 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Yes, showlists are higher this week and it's evident that cash fed fats have caught up with the market, but even with packers having bought 107,000 head last week, they still need more cattle and prices will likely be able to hold steady ground this week.

FEEDER CATTLE:

As the corn market plummeted $0.23 to $0.29 lower by the day's end, the feeder cattle contracts took the market's opportunity and ran $2.00 to $2.50 higher. The entire grain sector took a hit in Tuesday's market with wheat taking the biggest hit as it traded anywhere from $0.50 to $0.59 lower. Nevertheless, the grain market's weakness, combined with the robust support that the feeder cattle complex has seen, helped drive prices higher all through Tuesday's trade. Last week Superior's strong sale on the Corn Belt Classic set the market's tone for higher prices, and it's likely that Northern's Early Summer Special this Thursday solidifies the market's higher note. August feeders closed $2.35 higher at $175.30, September feeders closed $2.47 higher at $177.27 and October feeders closed $2.45 higher at $178.97. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers traded steady to $2.00 higher and feeder heifers traded $2.00 to $4.00 higher. Steer calves traded mostly steady, but heifer calves traded $3.00 to $6.00 higher. The CME Feeder Cattle Index for June 20: not available at this time.

LEAN HOGS:

Early in the day, the lean hog complex wasn't sure if it would scale back or commit to trading higher, but throughout the afternoon, as cash prices started to draw more attention, traders supported the contracts and led the market to a higher close. July lean hogs closed $1.72 higher at $112.72, August lean hogs closed $1.92 higher at $109.80 and October lean hogs closed $0.87 higher at $94.57. Pork cutout values weren't supportive as they rounded out the day lower, but with the Fourth of July less than two weeks away, most retailers do already have their needs at least committed for. Pork cutouts total 335.08 loads with 315.16 loads of pork cutouts and 19.92 loads of trim. Pork cutout values: down $1.01, $110.86. Tuesday's slaughter is estimated at 468,000 head, 1,000 head less than a week ago and 6,000 head less than a year ago. Monday's slaughter was revised to 449,000 head, 18,000 head less than what was originally stated. The CME Lean Hog Index for June 17: up $0.62, $109.16.

­­­­­WEDNESDAY'S CASH HOG CALL: Steady. Prices were significantly higher by Tuesday's afternoon, but packers only got 7,930 head bought. Heading into Wednesday's market, it's likely that the cash market will see more interest as packers need to pick up some volume.

Tuesday Midday Livestock Market Update - Feeders Charge Higher

GENERAL COMMENTS:

Tuesday has treated the livestock complex well as both live and feeder cattle futures trade higher; nearby lean hog contracts are higher as well. The feeder cattle market has rolled into what seems like the perfect storm as technically the market has trader interest and fundamentally the market is flush with support from farmer feeders and large feedlots alike. July corn is down 24 cents per bushel and July soybean meal is down $6.20. The Dow Jones Industrial Average is up 549.49 points.

LIVE CATTLE:

Live cattle futures are chopping sideways at the top of last week's trading range as feedlots sit back and wait to see how antsy packers are this week to get cattle bought. Even though the industry sits with record numbers of cattle on feed, thus far the market has had no problem rolling through them and showlists remain incredibly green as carcass weights continue to drop and slaughter speeds run aggressively. Packers were able to get some cattle bought last week for deferred delivery, but it's likely they'll have to be aggressive in this week's market again. June live cattle are down $0.17 at $137.85, August live cattle are up $0.35 at $136.92 and October live cattle are up $0.70 at $143.12. The market has yet to see any bids or asking prices develop.

Last week's negotiated cash cattle market totaled 107,080 head. Of that 73% (78,001 head) were committed for nearby delivery, while the remaining 27% (29,079 head) were committed for deferred delivery.

Boxed beef prices are higher: choice up $2.44 ($268.94) and select up $1.03 ($247.42) with a movement of 58 loads (40.82 loads of choice, 9.94 loads of select, 2.93 loads of trim and 4.77 loads of ground beef).

FEEDER CATTLE:

As the grain complex worries about higher temperatures and little moisture in the extended forecast (July through September), the corn market is plummeting 23 to 31 cents this morning. Consequently, feeders are charging higher. August feeders are up $2.75 at $175.70, September feeders are up $2.82 at $177.62 and October feeders are up $2.67 at $179.20. After last week's dynamite sale at Superior's Corn Belt Classic, Northern Livestock Auction is chomping at the bit anxiously, waiting to sell the calves on their Early Summer Special as the market is sitting sound fundamentally and being supported exceptionally well throughout the futures market.

LEAN HOGS:

Lean hog futures are again seeing support from the nearby contracts while the deferred months trade modestly lower as they fear looming supplies. Next week the market will be given the newest release of the Quarterly Hogs and Pigs report, which should give better insight into what supplies are looking like for the third and fourth quarters of 2022. July lean hogs are up $1.20 at $112.20, August lean hogs are up $1.92 at $109.85 and October lean hogs are up $0.77 at $94.47. To start the week off, both pork cutout values and cash prices are lower at midday but it wouldn't be surprising to see cash prices strengthen as the day trades on as it's already Tuesday and packers need to replenish their inventories.

The projected CME Lean Hog Index for 6/20/2022 is up $1.29 at $110.45 and the actual index for 6/17/2022 is up $0.62 at $109.16. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.13 with a weighted aver of $114.81, ranging from $110.00 to $124.00 on 4,121 head and a five-day rolling average of $115.78. Pork cutouts total 163.92 loads with 157.81 loads of pork cuts and 6.11 loads of trim. Pork cutout values: down $1.41, $110.46.