GENERAL COMMENTS:
Cattle
contracts weren't able to muster the strength that the lean hog complex
did, but given the ride that the cash cattle market endured this week,
the market is depressed and ready for the weekend. Hog prices closed
higher on the National Direct Afternoon Hog Report, up $0.21 with a
weighted average of $30.36 on 5,988 head. July corn is up 1/4 cent per
bushel and July soybean meal is down $0.70. The Dow Jones Industrial
Average is up 477.37 points and NASDAQ is up 96.08 points.
From
Friday to Friday livestock futures scored the following changes: June
live cattle up $2.18, August live cattle down $0.85; August feeder
cattle down $3.08, September feeder cattle down $3.00; June lean hogs up
$0.60, July lean hogs down $2.25.
LIVE CATTLE:
Cash
cattle trade endured a rough week. We all knew that the market was
bound to trade lower sooner rather than later, but just because you know
the sting is going to hurt doesn't make the actual sting any less
painful. Southern live cattle traded for $98 to $108; $7.00 to $10.00
lower than last week. Northern dressed deals traded for $160 to $172;
$15.00 to $18.00 lower than last week. Given the lower prices that the
cash cattle market endured, the live cattle contracts had no other
option but to trade lower. August live cattle closed $1.12 lower at
$95.32, October live cattle closed $1.07 lower at $98.00 and December
live cattle closed $0.72 lower at $102.05. Friday's slaughter is
estimated at 115,000 head, down 1,000 head from a week ago and 4,000
head less than a year ago. Saturday's slaughter is projected to be
76,000 head.
Boxed beef prices closed lower:
choice down $4.92 ($230.64) and select down $0.61 ($219.27) with a
movement of 155 loads (91.20 loads of choice, 19.90 loads of select,
6.87 loads of trim and 36.54 loads of ground beef).
MONDAY'S
CASH CATTLE CALL: Lower. Now that the market has tipped lower, we can
expect steady to lower undertones throughout the rest of the summer
while the backlog of fat cattle lasts.
FEEDER CATTLE:
Feeder
cattle contracts tumbled lower and closed Friday fully red. August
feeders closed $1.07 lower at $131.10, September feeders closed $0.77
lower at $132.47 and October feeders closed $0.85 lower at $133.15. The
feeder cattle complex was walking a tight rope this week knowing that
the cash cattle market was bound to weaken but was still hopeful that it
wouldn't be extreme. As producers begin to flip through the calendar
and realize that marketing their calves is truly right around the
corner, nervousness spreads. The USDA South Dakota Weekly Cattle Auction
Summary shared that compared to last week feeder steers sold $2.00 to
$6.00 lower, except 500 to 550 pound and 600 to 650 pound steers sold
$5.00 to $7.00 higher. Feeder heifers under 750 pounds sold $2.00 to
$6.00 higher, while heifers over 750 pounds $1.00 to $2.00 lower. There
was extremely good demand for light weight cattle in the background,
either on grass or in a yard. The CME feeder cattle index 6/12/2020: up
$0.20, $129.58.
LEAN HOGS:
The
lean hog complex rallied some support through the middle of the
afternoon Friday, and though nearby contracts closed lower, most of the
complex closed higher. July lean hogs closed $0.45 lower at $51.67,
August lean hogs closed $0.22 lower at $54.65 and October lean hogs
closed $0.25 lower at $53.15. The big wins this week for the lean hog
complex was the continued aggression on slaughter speeds, and then that
Friday's cutout values close slightly strong. The frustration of the
market stems from not knowing how long it will take to process the
backlog of hogs and that, with no need to actively seek hogs out,
packers don't have to work the countryside, which can bolster the cash
market.
Pork cutouts totaled 354.95 loads
with 311.29 loads of pork cuts and 43.66 loads of trim. Pork cutout
values: up $0.53, $76.10. Friday's slaughter is estimated to be 438,000
head, down 5,000 head from last week and 27,000 head less than a year
ago. Saturday's slaughter is projected to be 230,000 head. The CME lean
hog index 6/10/2020: down $1.19, $49.99.
MONDAY'S
CASH HOG CALL: Steady to lower. The over-abundance of supply is a
problem that continues to wreak havoc on the lean hog market.
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