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.
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