GENERAL COMMENTS:
The cattle contracts waltzed out of Thursday's market with a mixed close, and the poor lean hog market rounded out the day fully lower. Heading into Friday's market, be prepared for another WASDE report midmorning. Hog prices are unavailable due to packer submission issues. July corn is up 8 1/2 cents per bushel and July soybean meal is up $11.90. The Dow Jones Industrial Average is down 638.11 points.
LIVE CATTLE:
The futures market closed with a mixed of red and green contracts as it seems to be catching its breath after Wednesday's sprint. August live cattle closed $0.32 lower at $137.20, October live cattle closed $0.10 lower at $142.65 and December live cattle closed $0.27 lower at $148.20. While some may worry that the nearby contracts closed lower, I'd quickly remind them that even though the contracts saw slightly weaker closes, the market is still trading on the upper end of Wednesday's peak and not gushing. The cash cattle market saw a little more trade develop at prices fully steady with Wednesday's trend. Throughout the week Southern live cattle have traded at $136 ($1.00 higher than a week ago) and Northern dressed cattle have traded for $225 to $226 ($3.00 to $4.00 higher than a week ago). It's likely that bulk of this week's business is done with. Thursday's slaughter is estimated at 126,000 head, 1,000 head less than a week ago and 4,000 head more than a year ago.
Beef net sales of 17,700 mt for 2022 were down 1% from the previous week and 21% from the prior four-week average. The three largest buyers were Japan (5,600 mt), China (5,200 mt) and South Korea (3,600 mt).
Thursday's actual slaughter data shared that for the week ending May 28, 2022, steers averaged 882 pounds, down 6 pounds from the previous week and two pounds lighter than a year ago. Heifers for the same week averaged 819 pounds, 2 pounds lighter than the week before but 2 pounds heavier than a year ago.
Boxed beef prices closed mixed: choice down $0.64 ($271.10) and select up $0.20 ($249.61) with a movement of 108 loads (60.92 loads of choice, 29.71 loads of select, 3.35 loads of trim and 14.36 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. It's looking like the bulk of this week's business is done with and any trade that does develop will likely be at prices that are steady with the week's tone.
FEEDER CATTLE:
The feeder cattle complex closed lower, aside from the August and September 2022 contracts, which were able to keep mild gains through the day's end. August feeders closed $0.37 higher at $176.02, September feeders closed $0.12 higher at $177.37 and October feeders closed $0.22 lower at $178.70. The market has been able to sustain its new threshold, as fundamentally, recent rains have sent feeder buyers to town to look for more calves, and technically speaking, the market is surrounded with support given that live cattle are showing strength. At Winter livestock Auction in Pratt, Kansas, compared to last week, feeder steers weighing 800 to 1,000 pounds traded $3.00 to $7.00 higher. Steers weighing 500 to 800 pounds traded $6.00 to $7.00 lower. Feeder heifers weighing 600 to 850 pounds traded steady to $2.00 higher, and heifers weighing 850 to 950 pounds traded $10.00 higher. Slaughter cows traded $14.00 to $15.00 higher and slaughter bulls traded $6.00 to $8.00 higher. The CME Feeder Cattle Index for June 8: up $0.12, $159.80.
LEAN HOGS:
Even though pork cutout values closed higher, the market gapped lower and could not muster any substantial support to keep the market from trading lower. July lean hogs closed $2.95 lower at $105.00, August lean hogs closed $2.80 lower at $103.10 and October lean hogs closed $0.92 lower at $92.10. Even though pork cutout values closed higher (largely because of the $17.55 jump in belly prices), it's likely that Friday's market trades steady to somewhat weaker as the market's tone has taken a depressed stance and that will be hard to change ahead of the weekend. Pork cutouts totaled 212.50 loads with 192.28 loads of pork cuts and 20.22 loads of trim. Pork cutout values: up $4.62, $109.09. Thursday's slaughter is estimated at 476,000 head, 1,000 head more than a week ago and 6,000 head less than a year ago. The CME Lean Hog Index for June 7: down $0.32, $107.48.
Pork net sales of 16,700 mt for 2022 were down 48% from the previous week and 44% from the previous four-week average. The three largest buyers were Mexico (8,300 mt), Japan (4,700 mt) and South Korea (900 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that it's Friday, it's unlikely that packers will chase the cash hog market much and will most likely pick up any more hogs that they need in next week's market.
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