GENERAL COMMENTS:
The
board fought with itself as traders were cautious with how high the
market should go. Meanwhile, the cash cattle market was dead set on
trading higher this week. The lean hog complex may not have seemed to
have a good week, but given the aggression packers have had on
processing,the number of hogs they have moved is commendable. Hog prices
closed higher on the National Direct Afternoon Hog Report, up $0.05
with a weighted average of $37.11 on 10,255 head. July corn is up 1 3/4
cents per bushel and July soybean meal is down $0.70. The Dow Jones
Industrial Average is up 60.08 points and NASDAQ is up 70.84 points.
From
Friday to Friday, livestock futures scored the following changes: June
live cattle up $2.35, August live cattle down $2.38; May feeder cattle
down, $3.18 August feeder cattle down $5.88; June lean hogs down $3.83,
July lean hogs down $3.98.
LIVE CATTLE:
Cattle
contracts went skipping into the weekend as contracts modestly rallied
and cash prices jumped once again. June live cattle closed $2.87 higher
at $97.00, August live cattle closed $0.82 higher at $97.82 and October
live cattle closed $0.40 higher at $100.35. Cash cattle trade was
reported in various regions Friday for significantly higher money. Live
cattle sold for $120 in Kansas, Nebraska and Texas, which is $5.00 to
$10.00 higher than the Southern trade on Wednesday, and a substantial
$20 higher than last week's average in Nebraska. Some dressed cattle
also sold in Nebraska for $182. Friday's slaughter is estimated at
91,000 head, 6,000 head more than a week ago and 28,000 head less than a
year ago. Saturday's slaughter is estimated to be around 50,000 head.
Boxed
beef prices closed lower: choice down $16.60 ($434.32) and select down
$18.34 ($419.06) with a movement of 125 loads (49.18 loads of choice,
15.25 loads of select, 42.94 loads of trim and 17.18 loads of ground
beef).
MONDAY'S CASH CATTLE CALL: Lower. The
ramifications of COVID-19 are going to be a burden for a lot of feedlots
and producers as we work through the summer months. As packers begin to
lose some of their extraordinary margins as boxed beef prices look to
find a realistic price range, packers aren't going to be as aggressive
with cash cattle bids as there are more cattle throughout the
countryside than ever before.
FEEDER CATTLE:
Feeder
cattle contracts closed the week slightly higher as the cattle complex
was encouraged by the rally in the cash cattle market. The board traded
all over this week -- one day higher, one day lower -- indicating that,
although the market is looking to fix some of the problems that COVID-19
has created, uncertainty and volatility are still entrenched into the
marketplace. May feeders closed $0.92 higher at $124.72, August feeders
closed $0.02 higher at $131.07 and September feeders closed $0.22 higher
at $132.75. At Lexington Livestock Market in Lexington, Nebraska,
compared to two weeks ago, steers and heifers sold $2.00 to $6.00
higher. Demand was excellent and buyers were aggressive. The CME feeder
cattle index for 5/14/2020: up $0.85, $124.80.
LEAN HOGS:
The
lean hog complex traded mostly lower throughout the week despite
slaughter inching higher and the cash market trading higher numerous
times. It's rather impressive that packers bought 10,255 head Friday
afternoon, which leads one to believe that they are committed to getting
the backlog of hogs harvested. The market will continue to be pressured
until those hogs are processed, but thankfully packers are working on
them vigorously. Pork cutouts totaled 409.22 loads with 379.54 loads of
pork cuts and 29.69 loads of trim. Pork cutout values: down $3.67,
$110.12. Friday's slaughter is estimated at 375,000 head, 40,000 head
more than a week ago and 73,000 head less than a year ago. Saturday's
slaughter is projected to be around 250,000 head. The CME lean hog index
5/13/2020: up $0.98, $68.87.
MONDAY'S CASH
HOG CALL: Steady. The cash market has an uphill battle ahead. Packers
are aggressively pulling hogs but there's an overabundance of them
available -- so while producers would hope that the stronger cash prices
would positively encourage the board, the market will most likely be
depressed until current again.
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