Friday, May 7, 2021

Friday Closing Livestock Market Update - Mostly Higher Summarize Developments

 GENERAL COMMENTS:

It was another week of strong advancements in the lean hog market, but plenty of challenging hurdles to dodge in the cattle market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.72 with a weighted average of $113.70 on 5,116 head. July corn is up 13 1/2 cents per bushel and July soybean meal is up $14.50. The Dow Jones Industrial Average is up 229.23 points and NASDAQ is up 119.40 points.

From Friday to Friday livestock futures scored the following changes: June live cattle down $0.55, August live cattle up $0.23; May feeder cattle down $1.88, August feeder cattle down $2.47; June lean hogs up $3.13, July lean hogs up $4.30.

LIVE CATTLE:

The live cattle contracts managed to close mostly higher as traders were feeling generous in Friday's markets. June live cattle closed $0.55 higher at $116.02, August live cattle closed $0.37 higher at $118.85 and October live cattle closed $0.02 lower at $123.45. There wasn't much development that happened in the cash cattle market Friday, as the week's business was already concluded and all that was left to trade was some clean-up pens here and there. This week Southern live cattle traded for $117.50 to $119, though mostly at $118 to $119, and Northern dressed cattle traded from $187 to $192, but mostly $190.

As I sit back and take in the market's developments this past week, one can't help but notice that there are undeniable problems in the cattle market. How can it be that when boxed beef prices are rallying upward of $11.72 for the week in choice cuts and $7.56 in select cuts, and that cash cattle are trading at a measly $118 to $119 live? And better yet, when demand is as evident as it is, how can this week's movement of cuts, grinds and trim only total a mere 492 loads? To say that American feedlots aren't getting their fair share of the market is a repulsive understatement.

Friday's slaughter is estimated at 111,000 head, 4,000 head less than a week ago and only 22,000 head more than a year ago when packing plants were dealing with COVID-19. Saturday's slaughter is projected to be around 57,000 head, steady with a week ago.

Throughout the week, the boxed beef market soared higher again, showing just how hungry Americans are for beef. On average for the week, choice cuts sold for $303.51 (up $11.72 from last week) and select cuts sold for $286.70 (up $7.56 from last week) and the market's total movement of cuts, grinds and trim totaled a sparse 492 loads.

Boxed beef prices closed mixed: choice down $0.49 ($305.88) and select up $0.91 ($290.27) with a movement of 64 loads (36.44 loads of choice, 9.82 loads of select, 8.62 loads of trim and 8.64 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. With packers having ample supplies of forward bought cattle, their need to dive wildly into the cash cattle market is going to be slim.

FEEDER CATTLE:

The feeder cattle contracts roared into Friday's trade, as early in the day the corn market couldn't gather enough trader interest to drive prices higher. But as the day went on, the corn contracts mustered up the support they needed to close fully higher. But thankfully, the feeder cattle contracts were able to still close moderately higher. May feeders closed $1.25 higher at $131.72, August feeders closed $0.87 higher at $144.27 and September feeders closed $0.50 higher at $146.05. Largely, the feeder cattle buyers have their hands tied in the current market. With inputs continuing to rise and fat cattle prices at less than profitable price points, feeders are having a hard time buying cattle as it's a tough business to pencil at this point. At Winter Livestock Auction in Pratt, Kansas, compared to last week, feeder steers weighing 775 to 1,000 pounds sold $3.00 to $5.00 lower. Steer calves weighing 425 to 775 pounds sold $5.00 to $10.00 lower. Feeder heifers weighing 575 to 975 pounds sold $2.00 to $5.00 lower, and heifer calves weighing 400 to 575 pounds sold $7.00 to $10.00 lower. The CME Feeder Cattle Index for May 6: down $0.73, $130.83.

LEAN HOGS:

At this time last week, we were all wondering what was going to happen Monday morning when the markets opened to another week of opportunity and/or potential heartache. Would the lean hog contracts have enough gusto to surpass the resistance at $110.00? Or would traders dig their heels in the ground and say enough is enough, I'm not jumping to the moon over pork? Needless to say, as another week has come and gone, the lean hog market did it again -- onward and forward, folks -- higher ground is what the market is after. The nearby lean hog contracts felt a little pushback through Friday's trade, but the deferred contracts closed fully higher. June lean hogs closed $1.62 lower at $112.85, July lean hogs closed $1.10 lower at $113.55 and August lean hogs closed $0.90 lower at $109.02. Pork cutouts totaled 366.76 loads with 337.53 loads of pork cuts and 29.23 loads of trim. Pork cutout values: down $0.07, 113.79. Friday's slaughter is estimated at 462,000 head, 8,000 head less than a week ago. Saturday's kill is projected to be around 15,000 head, 36,000 head less than a week ago. The CME Lean Hog Index for May 5: up $0.66, $108.55.

­­­­­MONDAY'S CASH HOG CALL: Higher. Packers will most likely be active again in Monday's cash hog market, as they need to secure supplies for the weeks ahead and finding market ready hogs isn't getting any easier; if anything, it's getting harder.




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