GENERAL COMMENTS:
Friday's market came as a mixed bag for the livestock sector. Feeder cattle took the opportunity to rally amid a lower trending corn market, but the live cattle sector couldn't muster any support as traders let the contracts venture lower and the cash market couldn't entice any more bids. Meanwhile the lean hog market stood little chance of trading higher as the day's biggest headline was that African swine fever had been confirmed in Rome. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.59 with a weighted average of $101.98 on 4,896 head. July corn is down 12 3/4 cents per bushel and July soybean meal is down $6.30. The Dow Jones Industrial Average is down 98.60 points.
From Friday-to-Friday livestock futures scored the following changes: June live cattle up $0.10, August live cattle up $0.07; May feeder cattle up $3.20, August feeder cattle up $6.43; June lean hogs down $2.27, July lean hogs down $2.98.
LIVE CATTLE:
By Friday's end cattlemen were thankful to see the lights of the weekend nearing as the latter half of this week's trade was tough on the live cattle market. June live cattle closed $1.02 lower at $132.75, August live cattle closed $0.67 lower at $135.35 and October live cattle closed $0.52 lower at $142.87. In looking at what next week could bring, the futures will have to decide what $133 means for the market. The market could rally above support and trend sideways to slightly higher; but if packers tank the cash cattle market, then prices could push lower. Monday's report will print exactly how many cattle packers bought this week but having bought well over 100,000 head in the last two weeks, packers are likely to become absent buyers in the cash market. Throughout the week Southern live cattle traded at $140 and Northern dressed cattle traded at $232 -- both steady with last week's business. Of the cattle that traded in the North, some are committed for next week delivery, but a considerable portion are committed for the weeks of May 16 and May 23.
Friday's slaughter is estimated at 121,000 head -- 3,000 head more than a week ago and 10,000 head more than a year ago. Saturday's slaughter is projected to be around 49,000 head -- 16,000 head more than a week ago and 8,000 head less than a year ago. This week's slaughter is estimated to be 657,000 head -- which is 8,000 head more than last week and 18,000 head more than the same week a year ago.
Boxed beef prices closed lower: choice down $0.74 ($254.44) and select down $0.75 ($245.06) with a movement of 80 loads (45.61 loads of choice, 14.01 loads of select, 8.69 loads of trim and 11.90 loads of ground beef). The choice/select spread now sits at $9.38. Throughout the week choice cuts averaged $258.29 (down $4.92 from last week) and select cuts averaged $246.83 (down $5.99 from last week) and the week's movement of cuts, grinds, and trim totaled 626 loads.
MONDAY'S CASH CATTLE CALL: Lower. Given that packers have strategically bought cattle with time to mitigate their need of purchasing cattle later in May, it's unlikely that cash cattle prices see much support amid weaker boxed beef prices.
FEEDER CATTLE:
The nearby corn contracts closed $0.11 to $0.14 lower while the deferred contracts closed $0.14 to $0.19 lower. The corn market's late-week regression allowed the feeder cattle contracts to close mostly higher ahead of the weekend. The deferred feeder cattle contracts saw the biggest price jump as not only did the market see corn become cheaper in those months, but it also knows that feeder cattle supplies will favor the selling side of the market come later 2022 and into 2023. May feeders closed $0.77 lower at $159.55, August feeders closed $0.32 higher at $174.70 and September feeders closed $0.50 higher at $177.95. Oklahoma's Weekly Cattle Auction Summary shared that compared to last week throughout the state, feeder steers and heifers traded $1.00 to $3.00 higher. Steer calves sold $3.00 to $6.00 lower and heifer calves traded mostly $1.00 to $4.00 softer. Demand for calves is moderate despite the much-needed moisture that fell across the state here recently as it appears that grass orders are complete. Slaughter cows sold steady to $4.00 lower with the biggest decline seen on thin cows. Slaughter bulls traded $2.00 lower. The CME Feeder Cattle Index 5/5/2022: up $0.01, $155.60.
LEAN HOGS:
Friday's lean hog market had little chances of trading higher once news broke that African swine fever had been confirmed in Rome. Unfortunately, not only did the news of the spreading disease affect the futures, but as packers see that Friday's pork cutout values closed lower too, Monday's market could be off to a tough start. In viewing the pork cutout data, the market saw mixed interest all throughout the cuts as some gained a dollar and some lost a dollar; but it was the $15.21 drop in bellies that solidified the lower close. June lean hogs closed $2.97 lower at $104.10, July lean hogs closed $2.37 at $107.05 and August lean hogs closed $2.17 lower at $106.97. Pork cutouts totaled 289.98 with 256.47 loads of pork cuts and 33.51 loads of trim. Pork cutout values: down $1.57, $104.70. Friday's slaughter is estimated at 457,000 head -- 11,000 head more than a week ago and 4,000 head less than a year ago. Saturday's slaughter is projected to be around 48,000 head -- 8,000 head more than week ago and 38,000 head more than a year ago. The CME Lean Hog Index 5/4/2022: down $0.08, $100.96.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. It's likely packers wait until Tuesday or Wednesday to really show interest in the cash market as that's what have done of late. Additionally, they'll likely want to see how pork cutout values fare early in the week and how the market's tone initially starts.
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