Thursday, June 2, 2022

Thursday Closing Livestock Market Update - Complex Defends Gains

GENERAL COMMENTS:

It was another impressive day for the livestock contracts as the market closed fully higher. The market has seen substantial technical interest this past week, which has led the contracts to higher prices. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.46 with a weighted average of $115.22 on 10,049 head. July corn is down 1 cent per bushel and July soybean meal is up $2.20. The Dow Jones Industrial Average is up 435.05 points.

LIVE CATTLE:

The live cattle market had an impressive technical day as the market leaped higher and pulled itself out of its sideways trading range. The long-term realities of having few beef cows is seeming to resonate with the market, even though everyone is sober in realizing and understanding that this summer has a record number of cattle on feed to work through. June live cattle closed $0.82 higher at $133.62, August live cattle closed $1.22 higher at $134.12 and October live cattle closed $1.72 higher at $139.62. The cash market didn't see much more business develop as the bulk of this week's trade is done with. Throughout the week, Southern live cattle have traded for $135 and Northern dressed cattle have traded for $222 -- both are $2.00 lower than last week's averages. 

Thursday's slaughter is estimated at 127,000 head, 3,000 head more than a week ago and 8,000 head more than a year ago.

For the week ending May 21, steer carcasses averaged 888 pounds -- 3 pounds less than the week before and steady with year ago levels. Heifer carcasses for the same week averaged 821 pounds -- steady with the previous week but 3 pounds heavier than a year ago.

Boxed beef prices closed mixed: choice down $0.77 ($266.65) and select up $0.72 ($249.63) with a movement of 131 loads (78.92 loads of choice, 26.76 loads of select, 12.44 loads of trim and 12.52 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady with the week. Given that the week's business is essentially done with, prices shouldn't waiver.

FEEDER CATTLE:

The corn market didn't do much throughout Thursday's hours and ended up rounding out the day mostly steady. Given that the corn complex added no pressure, feeders kept with their upward rally and saw $2.00 to $3.00 easily added to their contracts. August feeders closed $3.22 higher at $172.95, September feeders closed $3.07 higher at $175.47 and October feeders closed $2.90 stronger at $177.67. Many of the contracts were able to close above the market's 40-day moving average as technical support continues to build. At Huss Livestock Market in Kearney, Nebraska, compared to two weeks ago, steers weighing 600 pounds traded $1.00 higher, but yearling steers weighing over 700 pounds traded $8.00 to $9.00 stronger. Heifers sold steady to $6.00 higher. Cow-calf pairs sold steady, but a large crowd showed up at the market too, as rain helped producers' morale. The CME Feeder Cattle Index for June 1: up $0.12, $153.48.

LEAN HOGS:

The lean hog market closed mostly higher other than in the July contract, which faced only mild pressure. June lean hogs closed $0.25 higher at $110.05, July lean hogs closed $0.25 lower at $112.17 and August lean hogs closed $0.82 higher at $109.75. The impressive fundamental push that the lean hog complex has seen from the cash and pork cutout market continued through Thursday's close. The cash market saw another 10,049 head traded, and the top bid rose to $120, which equates to a $20 spread in the cash hog market from its top bid to bottom bid. The combination of higher cash prices and a stronger cutout price will likely keep the market elevated through Friday's end. Pork cutouts totaled 331.84 loads with 305.42 loads of pork cuts and 26.42 loads of trim. Pork cutout values: up $2.00, $112.02. Thursday's slaughter is estimated at 475,000 head, steady with a week ago and 3,000 head more than a year ago. The CME Lean Hog Index for May 31: down $0.24, $104.91.

­­­­­FRIDAY'S CASH HOG CALL: Steady to somewhat lower. Given that a considerable volume of hogs has traded, it wouldn't be surprising to see packers slightly back away from the cash market. Then again, volumes of market-ready hogs are thin so packers could stay active in the market.




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