Friday Closing Livestock Market Update - Cattle Close Lower While Hogs Work Market Aggressively

GENERAL COMMENTS:

Friday's market was largely expected in the cattle sector as the market simply let time pass by leading up to the weekend, but the hog market didn't follow in the same manner. While demand is hot and supplies are thin, the futures market rallied higher in the week's end and even saw cutout values close mildly higher too. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.89 with a weighted average of $105.32. July corn is down 7 3/4 cents per bushel and July soybean meal is up $5.20. The Dow Jones Industrial Average is up 72.84 points and NASDAQ is up 11.64 points.

From Friday to Friday livestock futures scored the following changes: June live cattle down $1.80, August live cattle down $2.32; August feeder cattle down $2.35, September feeder cattle down $1.38; June lean hogs up $3.03, July lean hogs up $2.80.

** Livestock Comments will resume Tuesday, June 1, as the markets are closed on Monday, May 31, for Memorial Day. Happy weekend folks!

LIVE CATTLE:

Friday's live cattle trade wasn't exhilarating from any point of view as the contracts closed mostly lower and the cash cattle market only saw a handful of clean-up trade develop here and there. The big question heading into the weekend is once again: what will next week bring? How aggressive will slaughter speeds be post Memorial Day? Will boxed beef prices top or trade steady to slightly higher another week? Thankfully, beef demand continues to fuel this market from both a domestic and international point of view, but lousy throughput concerns many for the long-term trajectory of the market. June live cattle closed $0.47 lower at $115.87, August live cattle closed $0.82 lower at $118.60 and October live cattle closed $0.47 lower at $123.70. This week Southern live deals have been marked at $116 to $120, mostly $119 to $120, steady to $1 higher than last week's weighted averages. Northern dressed deals have a range of $187 to $192, mostly $191, generally steady with last week's weighted average basis Nebraska.

Friday's slaughter is estimated at 117,000 head, 2,000 head less than a week ago. Saturday's slaughter is projected to be around 34,000 head, 44,000 head less than a week ago.

Throughout the week, boxed beef prices trended higher, but not as drastically as they have in weeks past. Throughout the wee,k choice cuts averaged $329.64 (up $6.50 from last week) and select cuts averaged $303.34 (up $3.43 from last week) and the week's total load count of cuts, grinds and trim totaled 493 loads. The week's movement was still insufficient to meet all of consumers needs, inadequate throughput negatively affects all sides of the market -- cow-calf producers, feedlots and consumers alike.

Boxed beef prices closed mixed: choice up $0.99 ($330.97) and select down $3.20 ($300.90) with a movement of 80 loads (46.75 loads of choice, 12.97 loads of select, 10.17 loads of trim and 10.31 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady. I genuinely hope that feedlots can break this doggish cycle of steady cash prices, but with packers having cattle committed for the weeks ahead, it's going to be a challenge to do so, and especially when boxed beef prices top.

FEEDER CATTLE:

Roll the dice or flip a coin, but the fate of the feeder cattle contracts this past week has solely evolved around the corn market's daily direction. If corn trades higher, then the feeder cattle contracts dip lower, and if corn trades lower, then, you guessed it, feeders are on the upward swing while the corn regression lasts. Friday's feeder cattle contracts traded lower even though the corn market did as well as traders weren't sticking around to kick the tires of the feeder cattle contracts while a three-day weekend taunted them before the market's close. August feeders closed $1.50 lower at $151.35, September feeders closed $1.30 lower at $153.52 and October feeders closed $1.22 lower at $155.02. At Herreid Livestock Market in Herreid, South Dakota compared to two weeks ago the best test seen throughout the market was on steers weighing 900 to 1,000 pounds which sold $3.00 to $5.00 higher. The best test on heifers were those weighing 700 to 750 pounds, which sold $2.00 higher. The area has finally gotten some rain which has improved grass conditions and is helping the outlook for turning cattle out on grass look better and better. The CME Feeder Cattle Index for May 27: down $0.45, $136.12.

LEAN HOGS:

The lean hog market has done it again! You can look at charts all day long, and you can study the dynamics of the fundamental market until you're blue in the face, but the fact remains, thin supplies amid unbridled demand drives prices higher. June lean hogs closed $1.52 higher at $117.24, July lean hogs closed $2.65 higher at $119.35 and August lean hogs closed $2.40 higher at $116.22. Looking to next week, the market will once again be watching slaughter speeds and the market's pork cutout value to see how consumer demand fares after Memorial Day. Pork cutouts total 319.23 loads with 281.73 loads of pork cuts and 37.49 loads of trim. Pork cutout values: up $0.22, $126.59. Friday's slaughter is estimated at 425,000 head, 38,000 head less than a week ago. Saturday's slaughter is projected to be around 22,000 head, 10,000 head less than a week ago. The CME Lean Hog Index for May 26: up $0.58, $113.08.

TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Following the long weekend, packers will likely be scouting the countryside hard come Tuesday to procure enough hogs to fit their kill schedule.

Friday Midday Livestock Market Summary - Lean Hogs Push Higher Ahead of Holiday Weekend

GENERAL COMMENTS:

Cattle contracts are simply watching the day's minutes tick by as everyone is anxious for the long weekend. But the lean hog contracts are rallying amid exceptional demand. It wouldn't have been unlikely to see the lean hog contracts trade like the cattle contracts are as usually that's how the complex goes about business before a holiday. But with prices as high as they are and with money to be made, hog enthusiasts aren't letting any idle time pass them by. July corn is down 2 1/4 cents per bushel and July soybean meal is up $4.60. The Dow Jones Industrial Average is up 130.86 points and NASDAQ is up 74.70 points.

LIVE CATTLE:

Live cattle futures are trading mostly higher, other than in a couple of nearby contracts. With the cash cattle market neglecting to draw any attention and demand support, the nearby contracts are teetering as traders know that a top in boxed beef prices is coming. June live cattle are steady at $116.35, August live cattle are down $0.27 at $119.15 and October live cattle are up $0.07 at $124.25. The countryside is quiet as packers have already done most of their buying and if anything does develop trade-wise throughout the afternoon, it will be clean-up in nature. This week trade has Southern live deals marked at $116 to $120, mostly $119 to $120, steady to $1 higher than last week's weighted averages. Northern dressed deals have a range of $187 to $192, mostly $191, generally steady with last week's weighted average basis Nebraska.

Boxed beef prices are mixed: choice up $0.06 ($330.04) and select down $2.00 ($302.10) with a movement of 48 loads (29.92 loads of choice, 6.64 loads of select, 5.17 loads of trim and 6.63 loads of ground beef).

FEEDER CATTLE:

After Thursday's gigantic rally in the corn market, the corn contracts have opted to trade lower throughout Friday. Thankfully this is allowing the feeder cattle contracts to trade mildly higher. August feeders are up $0.12 at $152.97, September feeders are up $0.25 at $155.07 and October feeders are up $0.37 at $156.62. With the May contract having expired Thursday afternoon and the market's new spot being August, cow-calf producers are praying that the cash market does more rallying to meet the $150 threshold rather than seeing the futures market regress as the summer's run of early feeder cattle sales is right around the corner.

LEAN HOGS:

Tight supplies and strong demand can make a market just like exuberant supplies with minimal demand can break a market -- thankfully the hog market is on the better end of the deal this time around. June lean hogs are up $1.50 at $117.20, July lean hogs are up $2.60 at $119.32 and August lean hogs are up $2.37 at $116.20. Even with the market's phenomenal demand, I'm surprised to see traders as willing to invest in the complex before the holiday weekend as most of the time they leave the contracts to trade lackadaisically before the holiday and deal with business when they get back. The sharp regression in the cash market isn't that surprising as Canadian hogs are still working their way into the U.S. market and making it easier for packers to find needed supplies.

The projected CME Lean Hog Index for 5/27/2021 is up $0.36 at $113.44 and the actual index for 5/26/2021 is up $0.58 at $113.08. Hog prices are lower on the National Direct Morning Hog Report, down $3.48 with a weighted average of $103.19 ranging from $99.84 to $112.00 on 3,570 head and a five-day rolling average of $104.87. Pork cutouts total 212.02 loads with 183.29 loads of pork cuts and 28.72 loads of trim. Pork cutout values: up $2.21, $128.58.

Friday Morning Livestock Market Update - USDA Indicates it Will Not Overturn Ruling

GENERAL COMMENTS:

It is Friday and the market is looking ahead to a three-day weekend. Historically, trading volume would be lighter as traders would leave the trading floor early. That is not the case anymore with electronic trading. Volume generally continues to remain strong. However, there could be some liquidation of positions prior to the weekend and also due to it being the last day to trade for the month. The trading range of cash cattle widened a bit with prices in the South from $116 to $120 and in the North from $187 to $192. The majority were traded at steady with last week at $119 and $191 respectively. There may be some cattle traded Friday, but it will be some cleanup business. Weekly beef export sales were good at 27,900 metric tons, but not good enough to light a fire under traders to buy into the market. Futures action Thursday did not indicate the trend is turning back up. Boxed beef prices were slightly higher. The market will be closed on Monday for observance of Memorial Day.

As with cattle, it is the day before a three-day weekend, and it is the end of the month, which may have some influence on trading as traders close out their books. Even though weekly exports sales were good, futures struggled for a period of time before closing slightly higher in most contracts. China was the second largest buyer, indicating they still are not backing away from market even though their internal hog prices are declining. Front-month June was able to post a new contract high again supported by a rebound of $2.30 on the National Direct Afternoon report. A surge in cutouts of $2.39 should continue to provide support as demand remains strong. USDA said it will not seek to overturn a court ruling ordering pork packing plants to operate at slower line speeds. The total implications of this are uncertain, but it is expected to impact smaller farms negatively. Saturday slaughter is estimated at 24,000 head.

	BULL SIDE		BEAR SIDE
1)	Steady cash trade should keep futures from trending lower. Packers cannot afford to risk lower bids and possibly not receiving sufficient cattle for processing to meet strong demand.	1)	Cash cattle have not been able to trade higher even though boxed beef has increased. If demand slows after Memorial Day, cash may not get any better for a while.
2)	Weights continue to decline, which indicates marketings are current and more cattle will need to be purchased.	2)	Even strong export sales of beef were not enough to trigger traders into buying futures before the end of the month and a three-day weekend.
3)	June hog futures closed at a new high as it continues to move higher with cash. The trend remains up.	3)	Packers purchased aggressively Thursday but may be less aggressive or out of the market Friday leaving futures to drift into the three-day weekend.
4)	China continues to purchase pork, indicating they are not backing away from the market. It has been anticipated for a while that they would slow down, but that, so far, has not happened.	4)	USDA said it will not seek to overturn a court ruling ordering pork packing plants to operate at slower line speeds.

Thursday Closing Livestock Market Update - Cattle Mixed While Hogs Step Higher

GENERAL COMMENTS:

The live cattle contracts are leery of trading too positively when they sense a top in the boxed beef market close and the feeder cattle contracts closed lower amid a strong corn rally. The lean hog contracts closed higher as the market's support continues to surprise everyone. Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.30 with a weighted average of $107.21 on 8,718 head. July corn is up 40 cents per bushel and July soybean meal is up $6.50. The Dow Jones Industrial Average is up 141.59 points and NASDAQ is down 1.72 points.

LIVE CATTLE:

The live cattle contracts played Thursday's trade timidly but were able to close mildly higher. June live cattle closed $0.10 lower at $116.35, August live cattle closed $0.10 higher at $119.42 and October live cattle closed $0.10 higher at $124.17. With very little trade developing throughout the cash cattle market and the futures contracts tip-toeing gingerly throughout the day, the market mimicked the excitement of watching paint dry. It's looking like the bulk of this week's cash cattle trade is done with, though a few pens could trade Friday as clean up. Southern live deals this past week have been marked at $116 to $120, mostly $119 to $120 which is steady to $1.00 higher and Northern cattle have traded from $187 to $192, mostly $191, which is fully steady. Thursday's slaughter is estimated at 121,000 head, 2,000 head more than a week ago.

Beef net sales of 27,900 mt reported for 2021 were up 19% from the previous week and 45% from the prior four-week average. The three largest buyers were China (9,000 mt), Japan (8,800 mt) and South Korea (6,000 mt). Last week's export report needed to be adjusted as the shipment to the Netherlands were adjusted down 33,589 mt for the week ending May 13.

Thursday's actual slaughter data shared that, for the week ending May 15, steers carcasses lost 2 pounds from the previous week to average 894 pounds, and heifers saw a big drop in weights, down 7 pounds from the previous week to average 819 pounds.

Boxed beef prices closed higher: choice up $0.49 ($329.98) and select up $0.05 ($304.10) with a movement of 102 loads (59.67 loads of choice, 21.87 loads of select, 13.48 loads of trim and 6.69 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. It's unlikely that very many cattle will trade come Friday; if some do, they will be for steady prices with the week's trend.

FEEDER CATTLE:

The $0.34 to $0.40 rally in the nearby corn contracts took the wind out of the feeder cattle contracts rally and left the market closing fully lower. August feeders closed $2.35 lower at $152.85, September feeders closed $2.27 lower at $154.82 and October feeders closed $2.22 lower at $156.25. With the May contract expiring Thursday afternoon at $136.30 and the spot market now being the highly sought-after August contract, $152.85 looks a lot better to producers than a $136.30 does. The feeder cattle contracts are cash settled, so producers pray that the cash market does more rallying, opposed to the future market regressing -- but with corn prices as volatile as they are, a $20 rally isn't going to come without challenges. At Southern Oklahoma Livestock Auction in Ada, Oklahoma, compared to last week, steers over 600 pounds sold steady to $2.00 higher and steers under 600 pounds sold $8.00 to $10.00 higher. Heifers over 600 pounds sold steady to $3.00 higher and heifers under 600 pounds sold $4.00 to $10.00 higher. The CME Feeder Cattle Index for May 26: up $0.22, $136.57.

LEAN HOGS:

Even though the morning challenged the lean hog contracts, the day's supportive nature of higher pork cutout values, a rigorous slaughter pace and strong cash demand all helped push the contracts higher. June lean hogs closed $0.45 higher at $115.72, July lean hogs closed $0.30 higher at $116.70 and August lean hogs closed $0.22 higher at $113.82. Pork cutouts totaled 310.52 loads with 280.04 loads of pork cuts and 30.48 loads of trim. Pork cutout values: up $2.39, $126.37. Thursday's slaughter is estimated at 481,000 head, 4,000 head more than a week ago. The CME Lean Hog Index for May 25: up $0.30, $112.50.

Pork net sales of 45,900 mt reported for 2021 were up noticeably from the previous week and up 56% from the prior four-week average. The three primary buyers were Mexico (21,800 mt), China (9,600 mt) and Japan (7,700 mt).

Thursday's actual slaughter data shared that, for the week ending May 15, hog weights remained steady from the previous week. Live carcasses averaged 288 pounds and dressed carcasses averaged 215 pounds.

­­­­­FRIDAY'S CASH HOG CALL: Steady to somewhat lower. Pinpointing the cash hog market is a tricky game these days. It's likely that packers dove into Thursday's market aggressively because they plan to skip out of Friday's trade and enjoy the Memorial Day weekend. Then again, with pork cutouts chopping higher yet again, packers could be running their numbers twice and marking sure they have enough hogs to continue running these snappy slaughter speeds. Come Friday, we will see how the cards fall.

Thursday Midday Livestock Market Summary - Contracts Balance Different Realities

GENERAL COMMENTS:

The livestock complex is trading in a split manner Thursday as sharply higher corn prices pressure the feeder cattle futures, but higher boxed beef prices and a strong export report give live cattle futures traders a bit of support. Lean hog futures aren't wanting to move stronger, technically speaking, as the market has already climbed to lofty levels. But demand is still wildly noted as tight supplies drive prices higher. July corn is up 38 cents per bushel and July soybean meal is up $5.20. The Dow Jones Industrial Average is up 150.08 points and NASDAQ is up 26.28 points.

LIVE CATTLE:

After closing lower Wednesday, live cattle futures are back to trading mildly higher, still unwilling to get too wildly confident amid the market's uncertainty about when boxed beef prices will top and just how aggressive packers intend to be with slaughter speeds. June live cattle are up $0.32 at $116.77, August live cattle are up $0.30 at $119.62 and October live cattle are up $0.30 at $124.37. Thursday's strong export report could be fueling some of the positivity noted in the market. But, then again, this market's problem isn't a lack of demand, but rather a lack of throughput in the packing sector. The cash cattle market is still quiet without any bids having been renewed and it's looking like the bulk of the week's business could be essentially done.

The special Fed Cattle Exchange Auction held Thursday listed a total of 10,371 head (Texas 9,652; Kansas 447; Nebraska 272), of which all went unsold as they did not meet the reserve prices which ranged from $117 to $120. Opening prices ranged from $114.50 to $118 and high bids ranged from $115 to $119.

Beef net sales of 27,900 metric tons (mt) reported for 2021 were up 19% from the previous week and 45% from the prior four-week average. The three largest buyers were China (9,000 mt), Japan (8,800 mt) and South Korea (6,000 mt). Last week's export report needed to be adjusted as the shipment to the Netherlands were adjusted down 33,589 mt for the week ended May 13.

Boxed beef prices are higher: choice up $0.75 ($330.24) and select up $0.17 ($304.22) with a movement of 50 loads (24.46 loads of choice, 13.41 loads of select, 8.44 loads of trim and 3.74 loads of ground beef).

FEEDER CATTLE:

Who decided that once corn got to around $6.25 per bushel it would be a good idea for the market to rally again? When the feeder cattle contracts were just finally seeming to catch a break, the corn market shot higher at Thursday's opening bell. With gains of 24 to 35 cents in the nearby corn contracts, the feeder cattle market doesn't stand a chance at rallying. August feeders are down $2.10 at $153.10, September feeders are down $2.05 at $155.05 and October feeders are down $1.97 at $156.50.

LEAN HOGS:

Lean hog futures may be mostly lower but that doesn't mean the market's fundamentals aren't strong, which is rather surprising given that this weekend will be cut short for the Memorial Day holiday. Cash hog prices are sharply higher and even pork cutouts are up. Don't put all of your eggs in one basket though; it's still important to see how Thursday afternoon reports close, as much could change by the day's end. June lean hogs are up $0.17 at $115.45, July lean hogs are down $0.17 at $116.22 and August lean hogs are up $0.05 at $113.65.

The projected CME Lean Hog Index for 5/26/2021 is up $0.58 at $113.08 and the actual index for 5/25/2021 is up $0.30 at $112.50. Hog prices are higher on the National Direct Morning Hog Report, up $3.86 with a weighted average of $106.67 ranging from $99.84 to $114.00 on 7,130 head and a five-day rolling average of $105.28. Pork cutouts total 135.26 loads with 113.55 loads of pork cuts and 21.71 loads of trim. Pork cutout values: up $1.60, $125.58.

Pork net sales of 45,900 mt reported for 2021 were up noticeably from the previous week and up 56% from the prior four-week average. The three primary buyers were Mexico (21,800 mt), China (9,600 mt) and Japan (7,700 mt).

Thursday Morning Livestock Market Update - Trade to Focus on Export Sales

GENERAL COMMENTS:

The standout news Wednesday was the weakness of boxed beef. After a seemingly ending rise of prices, choice cutout declined $0.43 with select down $0.21. Is it possible that Memorial Day will actually top the market? It certainly is plausible that demand may slow, but prices still may remain high as consumers want beef and have sufficient disposable income to spend on it. Cattle futures could not find sufficient support to close higher. Cash was traded about steady with Tuesday with cattle in the South $1.00 higher at $119 to $120 while trading in the North was steady, averaging $191. However, there were a few cattle traded lower. This may not be an indication of what may happen the rest of the week, but it does raise a bit of concern. June futures point to the idea cash may trade lower and that seems to be more realistic as the days and weeks progress. Weekly exports sales will be released Thursday morning, which will contain a large revision by the USDA due to the reporting error last week. A sale of 33,700 metric tons (mt) to the Netherlands was reported instead of the actual sale of 34 mt. This correction will be made Thursday on the report.

The June, August and October futures contracts were able to post new highs Wednesday before slipping back. June was the only contact closing slightly higher. Both cash and cutouts were weaker with the National Direct Afternoon report down $2.51 and cutouts down $0.54. Packers are not aggressive as the overall kill may be less due to the Memorial Day weekend. However, packers have been able to purchase what they need without having to be aggressive as hogs need to be marketed on a consistent basis. Weekly export sales will be released Thursday morning and exports to China will be the main focus. Estimated Saturday slaughter is 24,000 head.

	BULL SIDE		BEAR SIDE
1)	Grain prices are less expensive, which may allow feedlots to hold cattle for a better cash price.	1)	Boxed beef prices slipping Wednesday may indicate demand may be topping and though prices may remain high, packers may not bid higher for cattle anytime soon.
2)	Another week of no worse than steady cash prices may indicate a strong base has been built under the market. Cash should not decline with weaker boxed beef as packers have very strong margins.	2)	The technical action in cattle futures Wednesday may indicate the short-term uptrend is over. Weekly export sales will influence trade Thursday. USDA will correct the reporting error last week, which will be negative.
3)	Pork demand should remain strong over the next month or two. Price has not yet slowed demand.	3)	Further weakness of cash may indicate the market may have reached a peak. Supplies continue to remain available with packers able to obtain sufficient supply.
4)	New contract highs again Wednesday suggest the trend higher remains intact. Traders should continue to buy breaks.	4)	Export sales will need to be strong or futures could retrace further leading up to the holiday weekend.

**

Wednesday Closing Livestock Market Update - Boxed Beef Prices Lower

GENERAL COMMENTS:

It wasn't a joyous day to be involved in the livestock markets. The cash cattle market saw pressure, boxed beef prices and pork cutouts closed lower and the futures market didn't even stand a chance. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.51 with a weighted average of $104.91 on 4,225 head. July corn is up 4 1/4 cents per bushel and July soybean meal is down $2.50. The Dow Jones Industrial Average is up 10.59 points and NASDAQ is up 80.82 points.

LIVE CATTLE:

Boxed beef prices closed lower, there was a handful of cash cattle traded lower than the ongoing four-week average and the futures market closed lower. The boxed beef market is fickle right now, and could easily post a top in the market or it could easily continue to trade higher for a couple more weeks as the market is extremely short bought on current supplies. Nevertheless, traders weren't going to get caught trading higher when the market's fundamentals don't even understand what's going on. June live cattle closed $0.27 lower at $116.45, August live cattle closed $0.77 lower at $119.32 and October live cattle closed $0.45 lower at $124.07. Other than what developed on Wednesday morning's online auction, most of Wednesday's cash cattle trade was for steady money with Tuesday's sales. Southern live cattle continue to sell for mostly $119 to $120 (steady to $1.00 higher than a week ago) and Northern dressed cattle trade from $188 to $192, but mostly at $191 (which is steady with last week's average). Wednesday's slaughter is estimated at 120,000 head, 2,000 head more than a week ago.

The Fed Cattle Exchange Auction listed a total of 15,237 head, of which 1,419 actually sold, 1,081 head were scratched from the auction, and 12,737 head were listed as unsold, as they did not meet the reserve prices that ranged from $117 to $120. Opening prices ranged from $100 to $119, high bids ranged from $100 to $117. The state-by-state breakdown looks like this: Texas 14,039 total head, with 1,419 head sold at $116 to $117, 11,611 head went unsold, and 1,009 head were scratched from the auction; Nebraska 481 total head, all of which went unsold; Kansas 717 total head, with 645 head unsold and 72 head were scratched from the auction.

Boxed beef prices closed lower: choice down $0.43 ($329.49) and select down $0.21 ($304.05) with a movement of 119 loads (71.60 loads of choice, 22.56 loads of select, 11.17 loads of trim and 13.79 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady to somewhat lower. Packers won't chase this week's cash cattle market with much ambition as boxed beef prices are teetering and give it's a shortened holiday week.

FEEDER CATTLE:

The corn market didn't close way higher, but even the slightest ounce of positive trade in the current corn market can send fear into the feeder cattle contracts. August feeders closed $1.47 lower at $155.20, September feeders closed $0.82 lower at $157.10 and October feeders closed $0.32 lower at $158.47. Sales throughout the countryside are holding their own as recent rainstorms have given some producers hope that their grass will come on before it's too late, and the onset of slightly weaker corn prices has some feeder cattle buyers coming back to sale barns with orders to fill. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 800 to 1,000 pounds sold $4.00 to $5.00 higher. There wasn't a good comparison on steers weighing 400 to 800 pounds, but a higher trend was noted. Feeder heifers weighing 400 to 900 pounds sold $5.00 to $8.00 higher. Slaughter cows sold $2.00 to $3.00 higher and slaughter bulls sold steady. The CME Feeder Cattle Index for May 25: down $0.04, $136.35.

LEAN HOGS:

The lean hog market didn't run away with Wednesday's trade by any measure, but given the strength the market has been able to gain over the last couple of days, Wednesday's slight weaker close isn't a red flag per se. Yes, pork cutout values closed slightly lower and the cash hog market wasn't supported much at all, but thankfully slaughter speeds are continuing to run vigorously. The weakness in the cash hog market most likely stems from the fact that this week's lighter kill amid the Memorial Day holiday means that plants don't need to procure as many hogs. Pork cutouts totaled 304.96 loads with 255.91 loads of pork cuts and 49.05 loads of trim. Pork cutout values: down $0.54, $123.98. Wednesday's slaughter is estimated at 483,000 head, 6,000 head more than a week ago. The CME Lean Hog Index for May 24: down $0.39, $112.20.

THURSDAY'S CASH HOG CALL: Lower. With this week's kill likely to be lighter with the Memorial Day holiday, packers don't need to chase the cash hog market as desperately.

Wednesday Midday Livestock Market Update - Cash Cattle Trade Lower on Online Action

GENERAL COMMENTS:

It's been a tough day for the livestock market as the contracts all trade lower, but especially so in live cattle futures as the cash market has bowed lower yet again. As feedlots worry about cattle moved, their desire to hold out for higher prices has dissipated. July corn is up 8 cents per bushel and July soybean meal is down $1.30. The Dow Jones Industrial Average is up 71.27 points and NASDAQ is up 87.02 points.

LIVE CATTLE:

Live cattle futures aren't gaining strength and are losing ground as the morning's online auction saw cash cattle trade for $117 to $120. The bottom side of the market gave away and is showing just how desperate feedlots are to get cattle moved. With processing speeds slow, their desire to hold out for higher prices has gone to the wayside. The rest of the countryside has been quiet without any bids renewed. Southern cattle traded Tuesday for $119 to $120 and Northern cattle sold for $188 to $192. Asking prices for cattle left on showlists are $121-plus in the South and $192-plus in the North. Upon seeing the regression in the cash cattle market, the futures market has begun to trade lower. June live cattle are down $0.27 at $116.45, August live cattle are down $0.67 at $119.45 and October live cattle are down $0.52 at $124.02.

The Fed Cattle Exchange Auction listed 15,237 head, of which 1,419 actually sold; 1,081 head were scratched from the auction; and 12,737 head were listed as unsold, as they did not meet the reserve prices which ranged from $117 to $120. Opening prices ranged from $100 to $119, high bids ranged from $100 to $117. The state-by-state breakdown looks like this: Texas 14,039 total head, with 1,419 head sold at $116 to $117, 11,611 head went unsold, and 1,009 head were scratched from the auction; Nebraska 481 total head, all of which went unsold; Kansas 717 total head, with 645 head unsold, and 72 head were scratched from the auction.

Boxed beef prices are mixed: choice down $0.46 ($329.46) and select up $2.04 ($206.30) with a movement of 82 loads (57.31 loads of choice, 13.79 loads of select, 6.06 loads of trim and 5.09 loads of ground beef).

FEEDER CATTLE:

Corn futures haven't fully committed to trading higher as the nearby contracts are only rallying modestly; but any sort of higher trade puts the feeder cattle contracts on edge. August feeders are down $0.55 at $156.12, September feeders are down $0.25 at $157.67 and October feeders are down $0.10 at $158.70. The feeder cattle contracts have taken an utter beating with the market's lower cash cattle prices and higher corn prices. Even with Tuesday's substantial rally, cattlemen would like the market to continue its upside move. But until the cash cattle market can show some positivity, the feeder cattle contracts are relying solely on lower corn prices for their momentum.

LEAN HOGS:

Lean hog futures trended slightly lower throughout Wednesday; that shouldn't come as a blistering surprise. With the lofty advancements made in the pork cutout values and the vigorous jump that cash hog prices made Monday, the market expected to see some downward pressure later in the week. Seeing the morning's slightly weaker pork cutout values isn't something to be too overly concerned about as the afternoon report is the one to watch. And, again, given the high prices the market is currently trading at we fully expect some volatile dips along the way. June lean hogs are down $0.47 at $114.77, July lean hogs are down $1.27 at $116.22 and August lean hogs are down $0.20 at $113.45.

Hog prices are lower on the National Direct Morning Hog Report, down $2.99 with a weighted average of $102.81, ranging from $101.17 to $112.00 on 3,315 head and a five-day rolling average of $105.01. Pork cutouts total 163.60 loads with 137.60 loads of pork cuts and 25.99 loads of trim. Pork cutout values: down $0.26, $124.26.

Wednesday Morning Livestock Market Update - Cattle May Show Limited Price Movement

GENERAL COMMENTS:

Feeder cattle moved higher as a result of the large decline of grain prices Tuesday. The same was not true for live cattle as they were struck a blow with some cattle trading $1.00 lower in the South and some at steady money with last week in the North. It was doubtful packers would step up to the plate this week as they fear demand may slow seasonally once this weekend is over. However, continued strength of boxed beef does not give an indication the market is going to top anytime soon, and if it does, a reduction in demand may be limited. Even though packers may not be desperate for cattle at present, they still need cattle, and the high profit margins should spur them on to be more aggressive. However, they do not need to be as cash is again developing this week without having to be aggressive. The trade continues to hold a discount to cash in the June contract.

Hog futures again showed their resiliency, pushing to new highs. Cash was lower on the National Direct Afternoon report, but cutouts increased $2.10, reaching $124.52. So even with slaughter Tuesday running 19,000 head more than a week ago, they are being absorbed directly into the market and are not moving into cold storage. This was confirmed on the Cold Storage report for April. Technically, the market has resumed a very strong uptrend with no consumer price resistance to increasing product prices.

	BULL SIDE		BEAR SIDE
1)	Cattle futures are moving in a slow uptrend despite some days of weakness. Traders are slowly adding to long positions.	1)	The cash cattle market seems to be looking at another week of steady prices at best.
2)	Demand for beef may continue to be very strong after Memorial Day and not follow the seasonal slowing of demand. Outdoor socialization will remain high with beef a large part of it.	2)	Packers have sufficient cattle on hand and may wait until post Memorial Day demand it seems before they may become more aggressive with bids.
3)	New contract highs through October shows traders believe there is more upside to the market. Breaks are being bought.	3)	Cash hogs were lower again Tuesday, which seems to be happening more often than days of high cash. Packers have been able to purchase what they need without too much difficulty.
4)	The discussion of supplies tightening down the road is becoming old news and not being talked about as much as it had been. However, that fact has not changed and continues to provide underlying support.	4)	Pork prices continue to decline in China, which may mean their hog herd is increasing, allowing for more pork to be sources internally and requiring less imports.

Tuesday Closing Livestock Market Update - Packers Hit Cash Cattle Market, Looking for Eager Sellers

GENERAL COMMENTS:

The lean hog market had another stellar day with slaughter levels scaling higher, pork cutouts closing higher and the board supporting the market's fundamental movement. But the same, sadly, can't be said for the live cattle market -- boxed beef prices continue to rally, but packers continue to hold the cash market at steady levels. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.89 with a weighted average of $107.42 on 7,324 head. July corn is down 37 cents per bushel, and July soybean meal is down $13.90. The Dow Jones Industrial Average is down 81.52 points, and the NASDAQ is down 3.99 points.

LIVE CATTLE:

Frustrations continue to grow in the cash cattle market. Why in the world, following a week where 669,000 head of cattle were processed and both choice and select cuts are trading well above $3 per pound, are cash cattle selling on a Tuesday for steady to lower prices?! It's utter madness, and unfortunately, packers have won this week's battle already. There was a light to moderate trade that took place in the South with live deals trading for $120 (which is roughly $1 lower than last week), and Northern cattle sold for $191 (which is mostly steady with last week's trade). One may be inclined to think that because this week's slaughter is going to be less than last week's that packers don't "need" cattle. But given the high profits they can make on meat cuts right now, they want cattle, they need cattle and they are hungry to get paid as boxed beef prices are unfathomable.

June live cattle closed $0.02 lower at $116.72, August live cattle closed steady at $120.10 and October live cattle closed $0.25 higher at $124.52. Tuesday's slaughter is estimated at 121,000 head -- 1,000 head more than a week ago. Monday's slaughter was revised to 116,000 head -- 3,000 head fewer than what was originally stated.

Boxed beef prices closed higher: choice up $2.09 ($329.92) and select up $0.87 ($304.26) with a movement of 93 loads (45.27 loads of choice, 17.09 loads of select, 18.45 loads of trim and 12.22 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Seeing that packers have been able to pull cattle out of the North and the South already this week, the market's prices are largely set.

FEEDER CATTLE:

I've said it once, so what's wrong with saying it one more time when the market continues to beat to the same drum? High corn prices aren't necessarily a bad thing, but high corn prices amid sorry cattle prices is a colossal problem. The sharp rise seen in the corn market throughout Tuesday's trade came as a rallying opportunity for the feeder cattle contracts, and they didn't bat an eye about scaling higher. August feeders closed $2.55 higher at $156.67, September feeders closed $2.52 higher at $157.92 and October feeders closed $2.47 higher at $158.80. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold $1 to $4 higher, and feeder heifers sold $4 to $6 higher. Wherever the countryside has recently gotten rain, buyers have been more aggressive in their feeder cattle purchases as they are hopeful that grass will come on. The CME feeder cattle index 5/24/2021: up $0.65, $136.31.

LEAN HOGS:

After Tuesday's close, the lean hog market is sitting in a fine position to keep rallying so long as fundamental support continues. And with consumers eager to enjoy summer and market-ready supplies tight -- a higher trend is very likely. Pork cutout values closed higher (check); even though cash prices were lower, it was on a sizable movement (check); and Tuesday's slaughter is marked way up into the 480,000 head mark (check)! June lean hogs closed $1.90 higher at $115.25, July lean hogs closed $2.17 higher at $117.50 and August lean hogs closed $2.10 higher at $113.65. Pork cutouts total 336.52 loads with 312.23 loads of pork cuts and 24.29 loads of trim. Pork cutout values: up $2.31, $124.52. Tuesday's slaughter is estimated at 485,000 head -- 19,000 head more than a week ago. The CME lean hog index 5/21/2021: up $0.38, $111.81.

WEDNESDAY'S CASH HOG CALL: Steady. Demand is strong and slaughter speeds are kicking it up a notch, which all points to a higher cash hog market. But the big kicker of this deal is this: How many hogs are available and still coming down from Canada and negatively pulling on the cash hog market?

Tuesday Midday Livestock Market Update - Lower Corn Prices Help Feeder Cattle Futures

GENERAL COMMENTS:

The sharp retreat in corn futures is a dream come true for feeder cattle contracts as it doesn't seem like the cash cattle market is going to gain any sizeable momentum any time soon. Lean hog futures continue to rally as consumer demand pushes prices higher and higher. If Tuesday's pork cutout value can close higher, the market could stand a chance at continuing the rally into Wednesday. July corn is down 29 3/4 cents per bushel and July soybean meal is down $13.20. The Dow Jones Industrial Average is up 51.86 points and NASDAQ is up 4.74 points.

LIVE CATTLE:

Even though boxed beef prices are higher and the corn market is trending sharply lower, live cattle futures are only rallying modestly as unanswered questions surround the cash cattle market. How in the world can cash cattle only be trading at $119 live and $190 to $191 dressed as both choice and select cuts continue to run well above $3.00 per pound? Thankfully last week's kill of 669,000 head tells us packers can indeed process more cattle. The market needs to see those type of slaughter speeds for cash cattle not to become backed up. Some light scattered trade has been reported at $120 which, compared to last week's weighted averages, is $1 higher in the South and steady in the North. Other than the light development at $120, the countryside sits quietly.

As the afternoon wears on, it wouldn't be surprising to see packers grow more interested. Asking prices in the South have been posted at $120-plus and the North has yet to share their prices. June live cattle are up $0.27 at $117.02, August live cattle are up $0.20 at $120.30 and October live cattle are up $0.35 at $124.62.

Boxed beef prices are higher: choice up $1.47 ($329.30) and select up $1.67 ($305.06) with a movement of 47 loads (21.33 loads of choice, 9.42 loads of select, 13.75 loads of trim and 2.13 loads of ground beef).

FEEDER CATTLE:

Sharp losses in corn futures come as a pleasant surprise for the feeder cattle contracts. As the nearby corn contracts plummet $0.22 to $0.35 lower, feeder cattle contracts are "making hay while the sun shines!" August feeders are up $1.80 at $155.92, September feeders are up $1.82 at $157.22 and October feeders are up $1.75 at $158.07. The feeder cattle complex would be in absolute heaven if the cash cattle market would show some encouraging signs as well. But, in the meantime the market can joyfully rally as the pressure of high input costs has been more than burdensome since the dawning of the new year.

LEAN HOGS:

With Monday's impressive pork cutout close, lean hog futures are rallying moderately in the nearby contracts, but the deferred market isn't having the same run of luck. With the ongoing problem of PRRS in parts of the U.S., and not knowing just how long demand will continue to flourish and how much supply will be available late next fall and into winter, the market has a lot to balance. June lean hogs are up $1.55 at $114.90, July lean hogs are up $2.07 at $117.40 and August lean hogs are up $2.02 at $113.57. If the day's closing reports can shine with continued consumer demand, the market's ability to keep trading higher remains strong. The upward swing in pork cutout values has packers wanting to process more hogs as they have sizeable profits to secure.

The projected CME Lean Hog Index for 5/24/2021 is up $0.40 at $112.20 and the actual index for 5/21/2021 is up $0.37 at $111.80. Hog prices are higher on the National Direct Morning Hog Report, up $3.25 with a weighted average of $105.80, ranging from $101.17 to $115.00 on 5,459 head. Pork cutouts total 205.54 loads with 186.18 loads of pork cuts and 19.36 loads of trim. Pork cutout values: up $3.82, $126.03.

Tuesday Morning Livestock Market Update - Inventory Report Provides Little Direction

GENERAL COMMENTS:

Live cattle futures struggled all day Monday under the influence of the Cattle on Feed report and some uncertainty whether strong demand will continue into June. What might change the seasonal is that there are greater outdoor gatherings taking place as people are making up for lost time of getting together. Boxed beef continued to increase significantly with choice up $2.66 and select up $1.08. Monday was the eleventh consecutive day of higher boxed beef and was higher 25 of the last 26 sessions, yet cash has not followed. There is concern it will not move much this week as well. Packers seem to be increasing slaughter rates in order to meet strong demand, but the fact that Memorial Day is just around the corner, and potentially slower demand thereafter, the market will need to prove itself. Unfortunately, packers will err on the side of caution and likely not get too aggressive. Total beef in cold storage during the month of April was 453.6 million pounds. This was 29.4 million pounds lower than March and 5% below a year ago and should be considered supportive. The Commitment of Traders report showed funds were net buyers of 3,360 futures contracts bringing their net-long positions to 58,281.

Lean hog futures struggled Monday even though both cash and cutouts turned friendly. The National Direct Hog report showed price, jumping $2.51 along with a pork cutout increasing $1.35. This pushed cutout values above the top price of last year during the pandemic madness. You can say what you want, but even with extra hogs coming from Canada and seemingly less concern for immediate supply, the market is tight and likely to become tighter. Seasonally, demand should remain strong over the next month or two. There is a level at which the market will reach price resistance, but that has not taken place yet. Pork in cold storage during the month of April totaled 455.3 million pounds, an increase of 4.3 million pounds from March. Inventory is 26% below a year ago. Bellies in storage declined 3% from March with inventory 58% below a year ago. This was somewhat anticipated. The Commitment of Traders report showed funds were net buyers of 2,609 futures contracts with total net-longs being held at 49,836 contracts.

	BULL SIDE		BEAR SIDE
1)	Total beef in inventory for April was 6% below March and 5% below a year ago, indicating strong demand.	1)	June cattle futures continue to hold a discount to cash with the trade having a difficult time anticipating or believing cash will increase anytime soon.
2)	The Cattle on Feed report has now been digested compared to trade estimates with traders likely now looking back in comparison to 2019, which should provide support.	2)	There was no real surprise with beef supplies in cold storage. This will leave the market searching for continued price direction.
3)	Hog futures managed a mixed close with the most pressure targeted at closer months in anticipation of packers remaining somewhat less aggressive. However, that was not the case, which should keep futures strong.	3)	Packers were more aggressive Monday, but traders want more proof that cash will continue higher before adding to their long positions.
4)	Low pork supply is storage indicates a continued level of strong demand and the inability of the market to increase supply.	4)	The market is trying to find a level at which it will slow demand and the higher it goes, the closer the level becomes.

**

Monday Closing Livestock Market Update - Pork Cutouts Pass Prices Made in 2020

GENERAL COMMENTS:

There's something to be said about limited supplies and stellar consumer demand, and the pork market is soaking up all the market has to offer while these prices last. The beef market would like to say the same thing, but unfortunately feedlots aren't seeing the same type of packer interest that the hog producers are. Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.51 with a weighted average of $109.31 on 5,166 head. July corn is down 2 1/4 cents per bushel and July soybean meal is up $1.30. The Dow Jones Industrial Average is up 186.14 points and NASDAQ is up 190.18 points.

LIVE CATTLE:

The live cattle contracts had a lower trending day, but the market did see stronger boxed beef prices and a swift kill Monday afternoon. June live cattle closed $0.92 lower at $116.75, August live cattle closed $0.82 lower at $120.10 and October live cattle closed $0.77 lower at $124.27. Last week's impressive kill of 669,000 head was one to applaud, but in order for the market to really benefit, it needs to be seeing those type of processing speeds week in and week out. The cash cattle market had a typical Monday -- the market was mostly quiet, but a few bids were offered in Eastern Nebraska at $190. If the market follows the trend that's been established in the last couple of weeks, we could see some trade develop as early as Tuesday afternoon. Monday's slaughter is estimated at 119,000 head, 4,000 head more than a week ago. New showlists appear to be mixed, somewhat higher in Texas and Kansas, but lower in Nebraska and Colorado.

Last week's negotiated cash cattle traded totaled 82,209 head. Of that 71% (58,166 head) are committed for delivery in the new two upcoming weeks while the remaining 29% (24,043 head) are schedule for delivery in the following 15 to 30 days.

Boxed beef prices closed higher: choice up $2.66 ($327.83) and select up $1.08 ($303.39) with a movement of 99 loads (47.33 loads of choice, 22.19 loads of select, 23.93 loads of trim and 5.58 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Higher. The negative pull that the cash cattle market has to battle is the fact that packers have cattle already committed for this time. But with packers wanting to run faster processing speeds and boxed beef prices still trending higher, there's a lot of money to be made and they will surely be keen on making all that they can while consumers are hungry.

FEEDER CATTLE:

The feeder cattle market was the only livestock complex able to close with some higher trending contracts as the market capitalized on the fact that the corn market had a lower trending day. August feeders closed $0.42 higher at $154.12, September feeders closed $0.50 higher at $155.40 and October feeders closed $0.62 higher at $156.32. Thankfully the moisture that's been received over the last week has helped boost prices seen throughout sale-barns in the U.S. and areas that are accumulating a decent amount of moisture are seeing buyers come to their sales with more aggression. At Joplin Regional Stockyards at their midsession point, compared to last week, feeder steers were traded $3.00 to $6.00 higher and feeder heifers were trading $4.00 to $7.00 higher. The CME Feeder Cattle Index for May 21: up $0.46, $135.66.

LEAN HOGS:

In case you still weren't a believer, it's true -- hogs can fly, or maybe we should say pork cutouts can fly. Monday's afternoon close of $122.21 surpassed the 2020 top and comes to show just how tight supplies truly are. With pork prices climbing ever higher, the cash market shot higher and packers saw an opportunity to make another buck in meat sales, so Monday's slaughter levels were more aggressive as well. Meanwhile, the board didn't rally through Monday's close, but it wouldn't be surprising to see traders more friendly in their pork trade come Tuesday or Wednesday if strong demand continues. June lean hogs closed $0.87 lower at $113.35, July lean hogs closed $1.22 lower at $115.32 and August lean hogs closed $0.47 lower at $111.55. Pork cutouts totaled 226.95 loads with 194.13 loads of pork cuts and 32.81 loads of trim. Pork cutout values: up $1.35, $122.21. Monday's slaughter is estimated at 482,000 head. 4,000 head more than a week ago. The CME Lean Hog Index for May 20: down $0.01, $111.43.

TUESDAY'S CASH HOG CALL: Steady. Monday's cash hog market was aggressive as packers bought just over 5,000 head and for $2.51 more than what the market was trading for last Friday. There's a good chance that they come back and buy aggressively to chase the market's high rewarding prices, but it all comes down to whether or not demand will hold.

Monday Midday Livestock Market Summary - Gingerly Stepping Into Day's Trade

GENERAL COMMENTS:

The livestock complex needs direction before it will dive wildly into anything. With prices at lofty levels for both pork and beef cuts, the market wants to see follow-through consumer support before any technical advancements are made. July corn is down 4 1/4 cents per bushel and July soybean meal is down $1.20. The Dow Jones Industrial Average is up 163.63 points and NASDAQ is up 184.47 points.

LIVE CATTLE:

Boxed beef prices are still floating above $3.00 per pound in both choice and select cuts, but live cattle futures are cautious about trade early this week. June live cattle are down $1.05 at $116.62, August live cattle are down $1.05 at $119.87 and October live cattle are down $0.75 at $124.30. This year is still operating far differently than most years, so watching the boxed beef market is inherently important as it may shine light on any changes that are to come with slaughter speed and cash cattle prices. Thankfully beef demand continues to be phenomenal. But in years past, the market would be looking to make a seasonal top at any time now. The 2021 market may choose to do the same; but, then again, it could surprise us and continue to rally for a couple of weeks. Showlists this week are larger in Texas, somewhat smaller in Kansas and evidently smaller in Nebraska and Colorado.

Last week's negotiated cash cattle traded totaled 82,209 head. Of that 71% (58,166 head) are committed for delivery in the next two upcoming weeks while the remaining 29% ($24,043 head) are schedule for delivery in the following 15 to 30 days.

Boxed beef prices are mixed: choice up $1.53 ($326.70) and select down $0.71 ($301.60) with a movement of 53 loads (19.09 loads of choice, 12.88 loads of select, 17.03 loads of trim and 4.27 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures started Monday just like the live cattle and lean hog contracts, simply unable to attract any trader interest. But as the day nears the noon hour and the corn market has continued to trade lower, the feeder cattle contracts are growing warm to the idea of trading mildly higher. August feeders are up $0.15 at $153.85, September feeders are up $0.35 at $155.25 and October feeders are up $0.37 at $156.10. Again this week, the feeder cattle contracts will closely eye both the cash cattle market and corn market as they will dictate how much upside potential the market holds.

LEAN HOGS:

Lean hog futures are trading in a slightly weaker fashion Monday morning as the market is unsure of its fate this week. Hog producers obviously want to see the strong prices continue; but so much of the market's strength lies in consumer behavior. If pork cutout values can show steady to mild gains, then the futures market could decide to chop cautiously higher. But if stark losses are endured in pork cutouts, then the futures market will inevitably fall. June lean hogs are down $1.00 at $113.22, July lean hogs are down $1.25 at $115.30 and August lean hogs are down $0.47 at $111.55.

The projected CME Lean Hog Index for 5/21/2021 is up $0.37 at $111.80 and the actual index for 5/20/2021 is up $0.02 at $111.43. Hog prices are lower on the National Direct Morning Hog Report, down $3.25 with a weighted average of $102.55 ranging from $101.17 to $112.00 on 2,151 head and a five-day rolling average of $106.26. Pork cutouts total 112.01 loads with 95.27 loads of pork cuts and 16.74 loads of trim. Pork cutout values: up $7.43, $128.29.

Monday Morning Livestock Market Update - An Uncertain Open for Cattle

GENERAL COMMENTS:

All in all, the livestock complex performed very well last week with futures up nicely from the previous week. Friday's strength was even in the face of the Cattle on Feed report. It seems as if traders really did not care much about it as an accurate comparison could not be made to the previous year due to the impact of COVID-19. Two things were going to take place once the numbers were released. One is to compare the actual with the estimate, which is always done and has an impact on traders. The average trade estimate for on feed was 103.7% with the actual released at 104.7% and will be viewed by the trade as bearish. Then there was the estimate for placements at 120.8% with the actual at 127.2%, which the trade will view as bearish. The average estimate for marketings was 133.6% with the actual at 132.6% and will be viewed as bearish. Remember, I indicated traders react to how numbers fall in comparison to the estimates. The second comparison will be made in correlation to 2019 as we might as well throw out 2020. A comparison to 2019 actually shows a more bullish Cattle on Feed report. There were fewer cattle on feed and with more cattle marketed. This may leave traders in a quandary Monday possibly leaving them to focus on the cash market and grain prices. Packers may need to be more aggressive this week due to minimal purchases the past two weeks.

Hogs put in a banner week last week with strong price gains in all contracts with July, August and October closing at new contract highs. This is a testament to traders willing to buy the break as the long-term outlook is favorable. Even though cash did not perform sufficiently to support the rally in futures, strong cutouts were more of the driving force. Packers are not aggressively bidding for hogs due to the addition of supply coming in from Canada. However, consumer demand is strong with demand expected to remain that way for possibly another month or so. With some contracts closing at new highs Friday, futures may follow through Monday as the trend has turned higher.

	BULL SIDE		BEAR SIDE
1)	Gains in futures last week may indicate traders are more confident buying into the market as cash has not declined further.	1)	The numbers and the Cattle on Feed report were bearish compared to the average trade estimate. Many times, traders will trade the actuals in relation to the estimates as trading begins.
2)	If traders compare the Cattle on Feed report to 2019, it is a friendly report that may bring more buyers into the futures market.	2)	There is concern packers will not need to be aggressive with purchases this week and will again only bid steady at best.
3)	July, August and October lean hog contracts closed at new highs, indicating the break was only a price correction and higher prices are yet to come.	3)	Continued weakness of cash is a concern for the time being as some hogs from Canada continue to be available. As long as the current slaughter is being met, packers may not get too excited.
4)	Strong cutouts should continue to provide support even though cash has been struggling. Demand for pork remain strong and needs to be satisfied.	4)	Cutouts reaching a new high for the year may be near a level of consumer resistance. Any weakness of cutouts that lasts for more than a day or two could indicate the rally might be over.

**

Friday Closing Livestock Market Update - Contracts Catch a Gust of Support

GENERAL COMMENTS:

It was a touch and go week for the livestock complex as the market must manage both technical and fundamental influences extremely close in Friday's market. Thankfully, both beef and pork demand continue to run wild and before Friday's close, traders upped their ante and the contracts closed higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.99 with a weighted average of $106.80 on 3,596 head. July corn is down 5 cents per bushel and July soybean meal is down $2.20. The Dow Jones Industrial Average is up 123.69 points and NASDAQ is down 64.75 points.

From Friday to Friday livestock futures scored the following changes: June live cattle up $2.38, August live cattle up $2.10; May feeder cattle down $0.33, August feeder cattle up $2.55; June lean hogs up $5.50, July lean hogs up $7.55.

LIVE CATTLE:

The live cattle market rounded out the week fully higher amid a bullish Cattle on Feed report and strong boxed beef prices. Not surprising at all is the fact that the market's broken component continues to be the cash cattle market. While boxed beef prices soar, the cash cattle market was left to trade mostly steady and traded very few cattle again this past week. There wasn't enough cash cattle traded Friday afternoon to even mention, but throughout the week, Southern live cattle sold for $118 to $120 (steady to $1.00 higher than last week) and Northern dressed cattle traded for $188 to $193, which was steady to $1.00 lower than last week. June live cattle closed $1.07 higher at $117.67, August live cattle closed $1.05 higher at $120.92 and October live cattle closed $0.70 higher at $125.05. Friday's slaughter is estimated at 119,000 head, 4,000 head more than a week ago. Saturday's slaughter is estimated at 78,000 head, 16,000 head more than a week ago.

Boxed beef prices averaged higher yet again throughout the week and closed above $3.00 per pound in both choice and select cuts on Thursday and Friday afternoon. Throughout the week, choice cuts averaged $323.14 (up $9.08 from last week) and select cuts averaged $299.91 (up $4.64 from last week) and the week's total movement of cuts, grinds and trim only totaled a scant 459 loads.

Friday's Cattle on Feed report was actually quite bullish when you compare 2021's data to that of 2019. Click on the link provided to see DTN's COF comments and to access the full report:

Boxed beef prices closed higher: choice up $0.99 ($325.17) and select up $0.70 ($302.31) with a movement of 67 loads (32.52 loads of choice, 14.32 loads of select, 13.25 loads of trim and 7.01 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. Packers seem to be making ungodly amounts of money in today's current market and it's not likely that they'll start to support the cash market and risk giving up some margin.

FEEDER CATTLE:

As the corn market rounded out the day lower, the feeder cattle contracts were given the opportunity to trade $1.00 to $2.00 higher before Friday's close. August feeders gained enough momentum that the contract closed above both the 40- and 100-day moving averages. August feeders closed $2.62 higher at $153.70, September feeders closed $2.35 higher at $154.90 and October feeders closed $1.97 higher at $155.70. The Oklahoma Weekly Cattle Auction summary shared that, compared to last week, feeder steers and heifers sold mostly steady to $1.00 higher. Steer calves traded steady to $4.00 lower, and heifer calves sold $1.00 to $3.00 higher. Slaughter cows sold steady to $2.00 lower and slaughter bull sold $1.00 to $3.00 higher. Of all the slaughter cows sold 68% went to packers. The CME Feeder Cattle Index for May 20: up $1.34, $135.20.

LEAN HOGS:

The cash market did indeed close lower (and sharply lower as a matter of fact), but traders didn't seem to mind as the market closed fully higher feeling completely supported by strong consumer demand. June lean hogs closed $1.97 higher at $114.22, July lean hogs closed $3.00 higher at $116.55 and August lean hogs closed $2.70 higher at $112.02. Looking to next week's trade, the market will once again be skeptical of making any higher technical advancements until traders see confidence in followed through buying from consumers. Pork cutouts totaled 335.31 loads with 302.73 loads of pork cuts and 32.57 loads of trim. Pork cutout values: up $1.64, $120.86. Friday's slaughter is estimated at 463,000 head - 2,000 head more than a week ago. Saturday's slaughter is projected to be around 32,000 head, 18,000 head more than a week ago. The CME Lean Hog Index for May 19: down $0.18, $111.44.

­­­­­MONDAY'S CASH HOG CALL: Steady to somewhat lower. Friday's cash hog market closed sharply lower and, looking at the recent weeks past, packers haven't been overly aggressive in their purchases on Monday. If the week trends as it has been, packers could wait until Tuesday or Wednesday to really support the market.

Friday Midday Livestock Market Summary - Lean Hogs Rally Amid Follow-Through Consumer Demand

GENERAL COMMENTS:

Lean hog futures have rallied confidently Friday as consumers are showing excellent support for pork products. Meanwhile, cattle futures enjoy some of support, but largely the market needs to see stronger slaughter speeds and a supported cash cattle market before it can get really excited. July corn is down 1 1/2 cents per bushel and July soybean meal is down $0.60. The Dow Jones Industrial Average is up 168.91 points and NASDAQ is down 41.40 points.

LIVE CATTLE:

The most aggravating component of this week's trade (and really the last entire year's trade) is that the cash cattle market isn't getting the attention it needs. The nearby live cattle contracts are trading higher, boxed beef prices are above $3.00/pound in both the choice and select cuts and yet feedlots are sitting on cattle that they can't get moved. It's utterly maddening. June live cattle are up $0.47 at $117.07, August live cattle are up $0.42 at $120.30 and October live cattle are up $0.05 at $124.40. The cash cattle market hasn't seen a speck of interest develop and, unless something happens in the next couple of hours, it's looking like this week's movement is going to be rather light again. Southern live deals have had a range of $118 to $120 and it looks like the bulk has come in at $119, which is fully steady with last week's weighted averages. Northern dressed deals have had a full range of $189 to $193, mostly $191, also fully steady with last week's weighted average basis Nebraska.

Seeing that Friday's morning boxed beef report only had a movement of 35 loads is troubling. But if we remember back to a week ago, it was at this time rumors started to stir that a couple of plants were planning dark Saturdays in the week ahead. As some packers prep for a dark weekend, their Friday ambitions are likely to be less as well.

Boxed beef prices are higher: choice up $1.74 ($325.92) and select up $1.55 ($303.16) with a movement of 35 loads (16.81 loads of choice, 7.62 loads of select, 6.22 loads of trim and 4.82 loads of ground beef).

FEEDER CATTLE:

Thursday's weaker close is allowing feeder cattle contracts to trade higher as the market is now back below the 40- and 100-day moving averages in the August contract and the market doesn't face immediate resistance pressure. August feeders are up $0.65 at $151.72, September feeders are up $0.45 at $153.00 and October feeders are up $0.35 at $154.07. Unfortunately, without strong advancements in the cash cattle market, the feeder cattle contracts are having to rely on a weaker corn complex to find opportunities to rally as the cash cattle market can't seem to gain any momentum.

LEAN HOGS:

The confidence stemming from stronger pork cutout values is helping move the lean hog complex higher into Friday afternoon trade. June lean hogs are up $1.50 at $113.77, July lean hogs are up $2.90 at $116.47 and August lean hogs are up $2.25 at $111.57. The market stands a good chance at closing higher before heading into the weekend. But, again, the market will be challenged next week as traders will need to see follow-through buying support from consumers before they rally the board.

The projected CME Lean Hog Index for 5/20/2021 is up $0.02 at $111.43 and the actual index for 5/19/2021 is down $0.19 at $111.41. Hog prices are lower on the National Direct Morning Hog Report, down $0.72 with a weighted average of $105.80, ranging from $101.68 to $116.00 on 2,660 head and a five-day rolling average of $107.02. Pork cutouts total 229.24 loads with 211.02 loads of pork cuts and 18.22 loads of trim. Pork cutout values: up $3.03, $122.25.

Friday Morning Livestock Market Update - USDA Makes Huge Beef Export Reporting Error

GENERAL COMMENTS:

USDA's Foreign Agricultural Service released a correction to the weekly export sales report for beef. There were only 34 metric tons (mt) of beef sold to the Netherlands rather than the 33,700 mt that were reported. A correction will be made on the export sales report next week. This makes a huge difference. Rather than the reported export sales of 56,900, export sales for the week were 23,234 mt. This may have a large impact on cattle futures. Futures did not respond to the marketing-year high sales number Thursday, but this may have a greater impact. Traders also will have the Cattle on Feed report to ponder as the day progresses. The report will be somewhat difficult to decipher as it will be compared to last year. Placements and marketings will be distorted due to the disruptions of COVID-19 last year. Total cattle on feed might be the only number that some sense could be made of, but still not an accurate representation. The trade estimates total cattle on feed up 3.7%, placements up 20.7% and marketings up 33%. Boxed beef continued higher Thursday with select cuts breaking above $300 level only the second time in history.

Hog futures put in a good day Thursday, extending the gains of the week even though cash was slightly lower, according to the National Direct Afternoon Hog report. This was made up for with a strong cutout value of $119.22, up $1.21. Good export sales of 19,220 mt, up 29% from the previous week, also provided support. It seems as if traders have gained confidence to buy back into the market more aggressively. June closed its chart gap that was left on May 13. Saturday slaughter is estimated at 25,000. This is higher than the previous two weeks due to a plant having mechanical issues during the week moving those hogs to Saturday to make up for the downtime.

	BULL SIDE		BEAR SIDE
1)	Cash cattle were able to hold generally steady this week after some anticipation of lower prices.	1)	The export sales reporting error by the USDA may have a negative impact on the market.
2)	Cash cattle trade has been light so far this week. Packers might become more aggressive Friday in order to increase ownership due to strong beef demand. Cash could see some late strength.	2)	The Cattle of Feed report may not have much influence due to the difficulty of making a comparison to last year. This may leave the market lethargic.
3)	Hog futures extended that gains of the week and may be poised to revisit the highs again.	3)	June hog futures closed the upside gap Thursday, which could be the extent of the gains for the time being now that that was accomplished.
4)	Traders seem confident to buy back into the break more aggressively. The potential of tighter supply still hangs over the market.	4)	Packers have not been very aggressive with purchases this week but have still been able to obtain a sufficient number of hogs.

**

Thursday Closing Livestock Market Update - For Only the Second Time in History, Select Cuts Close Above $300

GENERAL COMMENTS:

Thursday rounded out the day with strong gains seen in the hog market, but distressing realizations were meant to be drawn in the cattle market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.06 with a weighted average of $109.79 on 7,256 head. July corn is up 6 1/4 cents per bushel and July soybean meal is down $2.10. The Dow Jones Industrial Average is up 188.11 points and NASDAQ is up 236.00 points.

LIVE CATTLE:

If you look at the live cattle market, it doesn't take long to realize that the beef industry is a disastrous situation. And yes, I truly mean a disastrous, dire situation. With the onset of slower processing speeds, showlists are growing larger, cattle are gaining weight when historically they'd be losing weight, and the cash cattle market has only a sparse amount of time left until boxed beef prices tip lower and packers begin to pay even less than they are now.

For only the second time in history (second to the madness seen in 2020), Thursday's afternoon boxed beef prices made history as select cuts closed above $3.00 per pound. And while beef consumers are being charged historic meat prices, American feedlots are left begging for bids. Thursday's cash cattle trade was another showing of measly trade as just a few head sold here and there, and the week's total movement remains thin. So far throughout the week, Southern live cattle have traded for $118 to $120, which is steady to $1.00 higher than last week. Northern dressed cattle have sold for $189 to $193, but mostly $190 to $191, which is steady to $1.00 lower. June live cattle closed $0.30 lower at $116.60, August live cattle closed $0.25 lower at $119.87 and October live cattle closed $0.27 lower at $124.35. Thursday's slaughter is estimated at 119,000 head, 4,000 head more than a week ago.

Thursday's actual slaughter data shared that, for the week ending May 8, both steer and heifer weighers were up slightly. Steers averaged 896 pounds which is 5 pounds more from the previous week, and heifers averaged 826 pounds, which is 2 pounds more.

Beef net sales of 56,900 mt report for 2021 -- a marketing-year high -- were up noticeably from the previous week and from the prior four-week average. The three largest buyers were Netherlands (33,700 mt), China (9,200 mt) and Japan (5,900 mt).

Boxed beef prices closed higher: choice up $0.80 ($324.18) and select up $1.92 ($301.61) with a movement of 70 loads (34.35 loads of choice, 16.53 loads of select, 9.52 loads of trim and 9.69 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. At this point, the week's prices are set. What the market desperately needs to see is a strong movement of cattle sold by Friday's afternoon close or this week's movement will be slim following last week's limited trade.

FEEDER CATTLE:

The pressure of taking on an unpredictable corn market amid drought conditions and looking the market's 40-day moving average in the eye was too much for the August feeder cattle contract -- and all others as well. August feeders closed $1.80 lower at $151.07, September feeders closed $1.72 lower at $152.55 and October feeders closed $1.62 lower at $153.72. At Clovis Livestock Auction in Clovis, New Mexico, compared to last week, steer calves under 600 pounds sold unevenly steady and feeders over 600 pounds sold $2.00 higher. Heifer calves under 550 pounds sold $3.00 lower while calves and feeders over 550 pounds traded steady to $1.00 higher. Slaughter cows traded $1.00 to $2.00 higher and demand was moderate to strong throughout the sale. The CME Feeder Cattle Index for May 19: up $0.06, $133.86.

LEAN HOGS:

The cash hog market closed lower Thursday afternoon, but the strength gained in the pork cutout value, alongside the strong export report, was enough to encourage traders into pushing the lean hog futures complex higher. June lean hogs closed $1.30 higher at $112.25, July lean hogs closed $2.15 higher at $113.55 and August lean hogs closed $1.82 higher at $109.32. Pork cutouts totaled 291.26 loads with 256.87 loads of pork cuts and 34.39 loads of trim. Pork cutout values: up $1.21, $119.22. Thursday's slaughter is estimated at 477,000 head, 2,000 head less than a week ago. The CME Lean Hog Index for May 18: down $0.17, $111.62.

Thursday's actual slaughter data shared that, for the week ending May 8, both live and dressed hog carcass weights were down 1 pound from the previous week. Live carcasses averaged 288 pounds and dressed carcasses averaged 215 pounds.

Pork net sales of 19,200 mt reported for 2021 were up 29% from previous week but down 1% from the prior four-week average. The three largest buyers were Mexico (8,300 mt), Japan (3,600 mt) and China (3,100 mt).

­­­­­FRIDAY'S CASH HOG CALL: Lower. With packers processing very few hogs on Saturday, their aggression toward the later part of the week isn't likely to be much.

Thursday Midday Livestock Market Summary - Choice, Select Cuts Over $3 at Midday

GENERAL COMMENTS:

You would think with such excellent demand the live cattle market would be rocking and rolling and wanting to send the day fully higher. But traders know all too well the boxed beef market is soon going to be making a top and they don't want to get caught in an over-extended position when boxed prices start to fall. July corn is up 9 1/4 cents per bushel and July soybean meal is down $0.50. The Dow Jones Industrial Average is up 215.30 points and NASDAQ is up 202.34 points.

LIVE CATTLE:

As Thursday draws closer and closer to the noon hour, the live cattle contracts are flirting, ever so timidly, with the idea of trading higher. With boxed midday choice and select cut prices above $3.00/pound, the market has plenty of demand fueling its flame. June live cattle are up $0.07 at $116.97, August live cattle are up $0.07 at $120.20 and October live cattle are down $0.02 at $124.60. The tricky part is knowing when the boxed beef market is going to put in a top and head south. And knowing how fast cash cattle prices are going to deteriorate once the boxed beef high is in. There are a few cash cattle deals being reported in the North at mostly steady prices with the week's trend. Asking prices of cattle left on showlists are around $120 in the South and $192-plus in the North. Thus far there's only been a light movement of cattle, so more business needs to develop either Thursday afternoon or Friday.

Beef net sales of 56,900 metric tons (mt) for 2021 -- a marketing year high -- were up noticeably from the previous week and from the prior four-week average. The three largest buyers were Netherlands (33,700 mt), China (9,200 mt) and Japan (5,900 mt).

Boxed beef prices are higher: choice up $0.14 ($323.52) and select up $2.07 ($301.76) with a movement of 45 loads (22.62 loads of choice, 9.61 loads of select, 6.24 loads of trim and 6.95 loads of ground beef).

FEEDER CATTLE:

It seems to be as fickle as rolling the dice, but today the doubles landed in favor of the corn market, which consequently has put pressure on feeder cattle contracts. May feeders are down $1.15 at $135.42, August feeders are down $2.02 at $150.85 and September feeders are down $2.02 at $152.25. The market felt some additional technical pressure build as the August contract grew extremely close to trading alongside the 40-day moving average. If traders were going to support that movement, they were going to need to be confident in their upward advancement. And, with cash cattle holding basically steady and boxed beef prices expected to top any day now, the risk seemed a little more daunting than what the reward granted.

LEAN HOGS:

Even though Chinese pork prices have fallen, and the country is understood to be rebuilding their own domestic supply, the encouragement from Thursday morning's export report helped add some gusto to the lean hog complex. June lean hogs are up $1.07 at $112.05, July lean hogs are up $2.32 at $113.75 and August lean hogs are up $1.82 at $109.32. The midday pork cutout value is more than $1.00 stronger, but we know all too well that we can't put our faith in the midday but instead need to wait for the afternoon prices. If pork cutout values do indeed close higher Thursday afternoon, the market stands a fair chance at trading potentially higher again Friday with demand supporting the marketplace.

The projected CME Lean Hog Index for 5/19/2021 is down $0.19 at $111.41 and the actual index for 5/18/2021 is down $0.15 at $111.60. Hog prices are lower on the National Direct Morning Hog Report, down $3.09 with a weighted average of $106.52, ranging from $101.68 to $115.50 on 4,036 head and a five-day rolling average of $107.36. Pork cutouts total 178.58 loads with 158.63 loads of pork cuts and 19.95 loads of trim. Pork cutout values: up $1.28, $119.29.

Pork net sales of 19,200 mt reported for 2021 were up 29% from previous week but down 1% from the prior 4-week average. The three largest buyers were Mexico (8,300 mt), Japan (3,600 mt) and China (3,100 mt).