GENERAL COMMENTS:
Cattle futures felt plenty of pressure throughout the week and the cash markets did as well as packers keep buying supplies with time and calf buyers are cautious about the current state of the corn market. Meanwhile, the lean hog market continues to soar with tight supplies and stellar demand the driving forces. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.39 with a weighted average of $112.49 on 4,781 head. July corn is up 25 cents per bushel and July soybean meal is up $3.10. The Dow Jones Industrial Average is down 185.51 points and NASDAQ is down 119.87 points.
From Friday to Friday, livestock futures scored the following changes:
April live cattle down $1.85, June live cattle up $0.85; May feeder cattle down $4.08, August feeder cattle down $3.15; June lean hogs up $4.00, July lean hogs up $4.72.
LIVE CATTLE:
Live cattle futures held their own Friday and successfully closed fully higher. June live cattle closed $0.52 higher at $116.57, August live cattle closed $1.22 higher at $118.62 and October live cattle closed $1.35 higher at $122.90. This week's slaughter is estimated at 649,000 head, which is disappointing following last week's impressive kill of 665,000 head. With boxed beef prices as high as they are, packers have every incentive to push processing speeds to full bore. Friday's cash cattle trade was mostly uneventful with just a little clean-up action developing in the North for prices steady with the week's trend. Southern live cattle traded for $118 to $119 and Northern cattle traded anywhere from $188 to $195, but mostly at $191 this week. Friday's slaughter is estimated at 115,000 head -- 2,000 head more than a week ago. Saturday's slaughter is projected to be around 57,000 head, which is 17,000 head less than a week ago.
Boxed beef prices averaged significantly higher than last week. Choice cuts averaged the week at $291.79 (up $11.60 from last week) and select cuts averaged $279.14 (up $7.68 from last week) with a total movement of cuts, grinds and trim of 525 loads.
Boxed beef prices closed higher: choice up $2.74 ($296.50) and select up $3.26 ($283.05) with a movement of 78 loads (45.92 loads of choice, 11.35 loads of select, 10.94 loads of trim and 9.40 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Lower. Even though it's sad to say so, with packers having so many cattle contracted for delivery in the upcoming weeks, the likelihood that they'd support the cash cattle market in the meantime is slim.
FEEDER CATTLE:
There are times when the market rallies, there are times when the market falls, and then there are times when the corn market rallies like Muhammad Ali and the feeder cattle contracts constantly fall. With the spot May corn contract closing a stout $0.38 higher at $7.40 (no that's not a typo) you can imagine how the feeder cattle contracts closed -- sharply lower. May feeders closed $2.25 lower at $133.60, August feeders closed $3.12 lower at $146.75 and September feeders closed $2.35 lower at $149.27. With rising input costs from nearly every commodity, drought affecting a large portion of cow-calf producing states, and fat cattle selling for a wimpy $120 -- the feeder cattle clocked out on Friday feeling completely unsupported and quite helpless in the market's current environment. At Napoleon Livestock Auction in Napoleon, North Dakota, compared to last week feeder steers weighing 450 to 500 pounds and steers weighing 800 to 850 pounds both traded $2.00 to $3.00 higher, while steers weighing 750 to 800 pounds sold $2.00 to $5.00 lower. Feeder heifers weighing 400 pounds and higher sold $1.00 to $6.00 lower with instances of $11.00 lower. The CME Feeder Cattle Index 4/29/2021: down $0.94, $134.13.
LEAN HOGS:
I wasn't sure if the lean hog contracts were going to be able to close fully higher, as the market danced awful close to long-term resistance levels. But with a higher closing cash market and stronger pork cutout values, the lean hog party kept on rocking through the day's close. June lean hogs closed $3.00 higher at $109.72, July lean hogs closed $3.00 higher at $109.25 and August lean hogs closed $2.82 higher at $105.50. But with Friday's market close just shy of $110.00 in both the June and July contracts, it wouldn't be surprising to see Monday's market pressured as traders will be looking to see if the fundamental support still encourages higher trade. Pork cutouts total 290.92 loads with 258.82 loads of pork cuts and 32.10 loads of trim. Pork cutout values: up $2.91, $110.46. Friday's slaughter is estimated at 470,000 head -- 4,000 head less than a week ago. Saturday's slaughter is projected to be around 51,000 head which is 12,000 head less than a week ago. The CME Lean Hog Index 4/28/2021: down $0.12, $106.89.
MONDAY'S CASH HOG CALL: Steady. Supplies are tight so it's not crazy to think packers will have to pay somewhat steady prices for hogs.
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