GENERAL COMMENTS:
It was a rough day for the livestock contracts. The lean hog market tumbled upon seeing a marketing year low export report. The feeder cattle contracts are queasy at the thought of their cost of gains amid $120 fat cattle prices. And the cash cattle market disappointed many as trade developed for only $0.50 to $1.00 higher Thursday afternoon. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.43 with a weighted average of $102.78 on 7,540 head. May corn is down 4 cents per bushel and May soybean meal is up $3.70. The Dow Jones Industrial Average is up 305.10 points and NASDAQ is up 180.92 points.
LIVE CATTLE:
Southern feedlots started to trade cattle Thursday afternoon for $120 to $121, which is steady to $0.50 higher than a week ago. And some Northern feedlots sold cattle for $196, which is roughly $1.00 more than last week's business. With the market's downward progression, some feedlots got antsy, saw the basis premium and decided to sell cattle even though there maybe could have been more milked out of the cash cattle market. The feedlots that have yet to sell cattle are still hopeful that they can get $2.00 stronger this week, but it's always harder to do when some cattle have already traded. April live cattle closed $0.50 lower at $121.60, June live cattle closed $0.40 lower at $119.65 and August live cattle closed $0.47 lower at $119.70. Thursday's slaughter is estimated at 114,000 head, 5,000 head less than a week ago and 29,000 head more than a year ago.
Thursday's actual slaughter data shared encouraging news for steer carcass weights although heifers added more to their average. Steers averaged 894 pounds (down 5 pounds from the previous week) and heifers averaged 832 pounds (up 2 pounds from last week).
Beef net sales of 15,700 mt reported for 2021 were down 14% from the previous week and 23% from the prior four-week average. The three largest buyers were Japan (6,300 mt), China (3,300 mt) and South Korea (2,900 mt).
Boxed beef prices closed higher: choice up $3.71 ($276.62) and select up $1.12 ($268.43) with a movement of 103 loads (64.96 loads of choice, 9.31 loads of select, 7.39 loads of trim and 21.81 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Even though it was disheartening for the feedlots that have cattle left to sell to see some lots let cattle go already, there's still a chance that those who are holding out can get more money. Boxes closed higher and beef demand is still phenomenal -- and let's not forget that packers need cattle!
FEEDER CATTLE:
Even though the nearby corn contracts closed slightly weaker, the price point of the May contract ($5.90) and that of the July contract ($5.76) are gut-wrenching to feedlots while fat cattle trade around $1.20. Cost of gains are on the rise and feeder cattle buyers need to see an incentive to buy cattle with corn prices as high as they are. The past 10 days have treated sale barns extremely well as buyers are anxious to get cattle rounded-up and put together for grass and some for the feedlots, but if there isn't a turnaround in fat cattle prices buyers could grow weary. April feeders closed $1.10 lower at $140.05, May feeders closed $1.00 lower at $144.42 and August feeders closed $1.10 lower at $155.60. At Huss Livestock Market in Kearney, Nebraska, compared to two weeks ago, steers under 700 pounds sold $10.00 to $12.00 higher, and steers over 700 pounds sold steady to $4.00 higher. Heifers under 650 pounds sold $10.00 to $15.00 higher and those heifers weighing over 650 pounds sold $2.00 to $5.00 higher. Demand was excellent from the sale's start to finish and multiple buyers had to sit in the stands until the last pen sold to finish filling all their orders. The CME Feeder Cattle Index for April 14: down $0.26, $142.30.
LEAN HOGS:
It was a tough day for the lean hog future contracts as the April contract expired and the market's attention now closely eyes the June contract. June lean hogs closed $3.00 lower at $104.70, July lean hogs closed $3.00 lower at $102.37 and August lean hogs closed $4.00 lower at $97.80. The marketing-year low export report shook the market and rocked traders back on their heels even though pork cutout values show that demand domestically is still strong even given the lofty price levels that the market has jumped to. Looking at our foreign purchasers, they have begun to look at other sources for pork protein as our price point has rallied exponentially. Pork cutouts totaled 339.34 loads with 294.35 loads of pork cuts and 44.98 loads of trim. Pork cutout values: up $3.28, $113.37. Thursday's slaughter is estimated at 479,000 head, 13,000 head less than a week ago and 43,000 head more than a year ago. The CME Lean Hog Index for April 13: up $0.32, $102.70.
Pork net sales of 17,200 mt for 2021 -- a marketing year low -- were down 48% from the previous week and 60% from the prior four-week average. The three largest buyers were Mexico (7,800 mt), Japan (4,300 mt) and South Korea (1,300 mt).
Thursday's actual slaughter data shared mostly steady but somewhat better news for the hog industry. Live carcass weights fell 1 pound from the previous week to average 290 pounds, but dressed weights continue to hold steady at 217 pounds.
FRIDAY'S CASH HOG CALL: Steady to somewhat lower. With supplies as tight as they are, packers may look at the week's nearing and hold off on buying aggressively until next week.
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