GENERAL COMMENTS:
The tension in the live cattle market is thick morning as packers are unwilling to pump up their bids and thus far haven't been able to convince feedlots into caving into steady prices. Meanwhile, the lean hog market is relishing in Friday's support while the feeder cattle complex enjoys anther day of lower trending corn. July corn is down 16 3/4 cents per bushel and December soybean meal is up $7.40. The Dow Jones Industrial Average is up 221.06 points and NASDAQ is up 6.51 points.
LIVE CATTLE
It's not very often that we see the cash cattle market this quiet, for this long. This week's trade has been only lightly tested as packers aren't willing (thus far) to up their bids, and feedlots are unwilling (thus far) to cave into steady prices. The market has had a relatively aggressive slaughter week and if Saturday can post a big kill, packers will need to venture into the cash market to ensure enough supplies for the weeks ahead. The board is trading lower, which doesn't favor feedlots position, but midday boxed beef prices are higher, which does help strengthen their stance. June live cattle are down $0.72 at $122.10, August live cattle are down $1.02 at $121.60 and October live cattle are down $0.90 at $127.37. Asking prices in the South are pinned at $122 to $124 and in the North from $202 to $204. Thus far, there's yet to be any new bids hit the table. Be on the look out for Friday afternoon's Cattle on Feed report, though it's not expected to unveil anything wild, it could spark trade throughout the countryside.
Boxed beef prices are higher: choice up $0.98 ($308.40) and select up $1.19 ($277.33) with a movement of 44 loads (31.33 loads of choice, 8.39 loads of select, zero loads of trim and 4.03 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts welcome another day of lower trading corn and relish the opportunity to trade higher yet again. It may seem somewhat crazy that the feeder cattle market is delighted to see corn prices in the upper $5.00-range when you think of last year's market of $3.00 to $4.50 corn, but feedlots have a more wiggle room to work with when corn is trading at that range as opposed to the prices seen earlier this year when corn was trending from $6.00 to $7.25. The feeder cattle contracts strength this past week has genuinely stemmed from the corn market's regression. As cow-calf producers continue to face drought, high hay prices and too little of water, this week's rally was not only needed financially but also psychologically. August feeders are up $0.55 at $157.70, September feeders are up $0.62 at $159.82 and October feeders are up $0.55 at $161.65.
LEAN HOGS
The lean hog market is trying to make a comeback after Thursday's chaotic trade. The market weathered another export report and though it was down slightly from both the week before and the four-week average, it was rather interesting to see China buying at all given how vastly their own market has deteriorated. As Thursday afternoon rolled around, the market braced itself for the quarterly hogs and pigs report, for the deferred contracts the report could be considered somewhat bullish with fewer hogs than expected surfacing on the report. Still, the market sits with pressure looming above it. Even though the futures market is trading higher in Friday's afternoon, the wild and highly volatile price swings seen throughout the pork cutout market are enough to keep the market on edge. July lean hogs are up $0.50 at $100.52, August lean hogs are up $0.57 at $99.25 and October lean hogs are up $0.37 at $83.57.
The projected lean hog index for June 24 is down $2.23 at $115.29, and the actual index for June 23 is down $1.97 at $117.52. Hog prices are lower on the National Direct Morning Hog Report, down $0.73 with a weighted average of $115.60, ranging from $111.00 to $120.00 on 4,125 head and a five-day rolling average of $118.77. Pork cutouts total 167.30 loads with 148.78 loads of pork cuts and 23.52 loads of trim. Pork cutout values: down $0.53, $112.46.
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