GENERAL COMMENTS:
The live cattle and feeder cattle contracts are keeping with their rally as Friday's afternoon quickly approaches. Meanwhile, the lean hog complex is fading lower as traders seem to want to see how demand will fare next week before pushing the market much higher. July corn is up 2 1/4 cents per bushel and July soybean meal is down $5.80. The Dow Jones Industrial Average is down 305.77 points.
LIVE CATTLE:
Technically speaking, the live cattle market is continuing to see tremendous support as traders move the market higher again. June live cattle are up $0.02 at $133.65, August live cattle are up $0.25 at $134.37 and October live cattle are up $0.32 at $139.95. Currently, the market has two different realities to manage: that of the near term, and that of the long term. In the near term, it's likely that cash prices continue to see pushback from packers as they know that record numbers of cattle sit in feedlots. But from a long-term perspective, once the summer comes and goes, and the gluten of cattle is worked through, the market's attitude is going to change, as it's equally important to know that there are dramatically fewer cattle in the U.S. sitting outside feedlots than in years past. Nevertheless, the market must balance these two realities. The cash cattle market hasn't seen any renewed interest as the bulk of this week's business is done with. Throughout the week, live cattle have traded for $135 and dressed cattle have traded for $222, both of which are $2.00 cheaper than last week.
Beef net sales of 17,900 mt for 2022 were down 11% from the previous week and 17% from the prior four-week average. The three largest buyers were Japan (6,000 mt), China (4,800 mt) and South Korea (2,700 mt).
Boxed beef prices are higher: choice up $0.65 ($267.30) and select up $0.46 ($250.09) with a movement of 50 loads (32.64 loads of choice, 6.02 loads of select, 4.39 loads of trim and 7.39 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market is keeping with its stellar gains through Friday's market as the corn market hasn't posed any serious threat. August feeders are up $1.07 at $174.02, September feeders are up $0.87 at $176.35 and October feeders are up $0.90 at $178.57. As the market has successfully blown past its 40-day moving average, sellers are growing more optimistic about what the market could become as the board is starting to realize how stringent culling is going to affect feeder cattle demand this summer and well into 2023.
LEAN HOGS:
The lean hog market isn't rolling as aggressively through Friday's trade as the market did earlier in the week. June lean hogs are up $0.45 at $110.50, July lean hogs are down $0.67 at $111.50 and August lean hogs are down $0.85 at $108.90. Midday pork cutout values are still seeing widespread support, but it's seeming as through packers have bought enough hogs earlier in the week to fulfill their needs. Not to mention, as the market propelled itself higher this past week, traders could let the rally rest until next week to see how demand appears then.
The projected lean hog index for June 2 is up $1.02 at $106.05, and the actual index for June 1 is up $0.12 at $105.03. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.21 with a weighted average of $112.64, ranging from $108.00 to $117.50 on 2,960 head and a five-day rolling average of $112.50. Pork cutouts total 114.94 loads with 105.32 loads of pork cuts and 9.62 loads of trim. Pork cutout values: up $3.38, $115.40.
Pork net sales of 31,900 mt for 2022 were down 13% from the previous week but up 15% from the prior four-week average. The three largest buyers were Mexico (13,000 mt), China (9,000 mt) and South Korea (3,900 mt).
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