GENERAL COMMENTS:
This past week was far from perfect and, if anything, the market fell short of being able to rally amid new developing surprises like beef plants slowing their processing speeds. July corn is down 31 cents per bushel and July soybean meal is down $2.90. The Dow Jones Industrial Average is up 402.32 points and NASDAQ is up 315.64 points.
From Friday to Friday livestock futures scored the following changes: June live cattle down $0.73, August live cattle down $0.02; May feeder cattle up $5.83, August feeder cattle up $6.88; June lean hogs down $4.12, July lean hogs down $4.55.
LIVE CATTLE:
Heading into next week's trade, the live cattle market knows that it has a mountain ahead of it. With processing speeds being cut back, feedlots are beginning to worry about front end currentness, and after last year we all know too well what a backlog in the supply chain does to prices. Mix weaker processing speeds with the fact that boxed beef prices are mostly likely going to find a top in the next week or two -- and that very few cash cattle traded this past week -- the markets weren't left with a rosy outlook for the weeks ahead.
June live cattle closed $0.30 lower at $115.30, August live cattle closed $0.57 lower at $118.82 and October live cattle closed $0.80 lower at $123.25. The market didn't see much trade develop Friday on the cash cattle front, as only a few clean=-p purchases were made here and there. This week's trade had a range of, $119 to $120 live in the South, while Northern dressed deals had a range of $187.50 to $192.50, mostly $190 to $191.Friday's slaughter is estimated at 115,000 head, 4,000 head more than a week ago. Saturday's kill is projected to be around 62,000 head, 5,000 head more than a week ago. Thursday's kill was revised to only 115,000 head, 3,000 head less than the originally stated 118,000 head.
This week boxed beef prices showed stellar advancements once again. Throughout the week choice cuts averaged $314.55 (up $10.55 from last week) and select cuts averaged $295.27 (up $8.57 from last week) with a total movement of cuts, grinds and trim only totaling 488 loads.
Boxed beef prices closed mixed: choice up $0.16 ($316.94) and select down $2.72 ($293.19) with a movement of 107 loads (62.62 loads of choice, 13.53 loads of select, 21.87 loads of trim and 8.98 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Lower. With packers having committed supplies booked out until the second week of June and reducing processing speeds this past week, the likelihood that the cash cattle market is stronger next week is slim.
FEEDER CATTLE:
With the May corn contract set to expire Friday afternoon, the market's full attention will now belong to the July corn contract. The corn contracts endured another tough day closing anywhere from $0.15 to $0.34 lower, and thankfully their bearish close allowed for the feeder cattle contracts to close modestly higher. May feeders closed $0.10 higher at $137.55, August feeders closed $0.65 higher at $151.15 and September feeders closed $0.70 higher at $152.67. The feeder cattle market should have been able to rally to the moon and back this past week, but with the uncertainty surrounding the live cattle and cash cattle markets, some feeder cattle buyers were still hesitant and traders weren't going to get caught putting the cart before the horse. Even though lower input costs through feed expenses make feeding cattle more appealing, feedlots still have to be able to sell them for more than $119 when corn prices are on the upper end of $6.00. At Farmers and Ranchers Livestock Commission in Salina, Kansas, compared to last week, steer calves under 550 pounds were $8.00 to $10.00 higher, steers weighing 550 to 700 pounds were $2.00 to $8.00 higher, steers weighing 700 to 750 pounds were $6.00 to $7.00 lower and steers weighing 850 to 1,000 pounds were steady to $1.00 higher. Heifers weighing under 850 pounds sold $2.00 to $7.00 higher and heifers over 850 pounds traded $2.00 to $3.00 lower. The CME Feeder Cattle Index for May 13: up $0.72, $131.73.
LEAN HOGS:
Other than the slight dip in prices that the market saw early in April, the lean hog contracts have gotten accustomed to trading fully higher until this past week. With traders leery about how much higher the market could truly go, they wanted to see solid advancements made from the market's fundamentals. With the choppy trade in both cash prices and pork cutout values, traders let the market wane lower. June lean hogs closed $1.37 lower at $108.72, July lean hogs closed $1.10 lower at $109.00 and August lean hogs closed $0.95 lower at $104.77. If pork cutouts can continue to chop sideways, the downward progression may be done slowly, but if pork cutout prices gush lower, then the futures complex will most likely follow. Favoring producer's position is the fact that supplies of market ready hogs continue to remain extremely low. Pork cutouts totaled 340.34 loads with 308.79 loads of pork cuts and 31.55 loads of trim. Pork cutout values: down $0.49, $115.70. Friday's slaughter is estimated at 461,000 head, 1,000 head less than a week ago. Saturday's kill is projected to be around 14,000 head, 1,000 head less than a week ago. The CME Lean Hog Index for May 12: down $0.01, $110.94.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. Seeing that slaughter speeds are trending lower leads one to believe that packers aren't going to dive "hog wild" into Monday's cash market.
No comments:
Post a Comment