GENERAL COMMENTS:
Wednesday's cattle contracts have to give the cash cattle market all the glory as both the live cattle and feeder cattle contracts were able to close higher thanks to the $1.00 to $5.00 rally seen in cash prices. More trade should develop on Thursday, but prices are likely set at this point. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.64 with a weighted average price of $82.19 on 12,525 head. July corn is up 9 3/4 cents per bushel and July soybean meal is down $4.20. The Dow Jones Industrial Average is down 255.59 points.
LIVE CATTLE:
This week's cash market was a sweet, sweet victory for feedlots! With front-end market-ready supplies of cattle being as thin as they are, packers were chomping at the bit Wednesday morning to get cattle bought and committed. Southern live cattle have traded for mostly $171 which is steady in Kansas but $1.00 higher in Texas, and Northern dressed cattle have traded for mostly $285 to $286, which is $4.00 to $5.00 higher than last week's weighted average. Wednesday's exceptional performance in the cash sector was yet again an example of how the cash cattle market can influence the futures complex as traders collectively ran the contracts higher upon seeing stronger cash sales. June live cattle closed $1.82 higher at $166.10, August live cattle closed $1.55 higher at $164.12 and October live cattle closed $1.20 higher at $168.37. It was exciting to see the June live cattle contract carve out yet another new contract high by the day's end. Feedlots deserve another pat on the back after accomplishing such a feat in the cash market because, without their gumption and desire to push the market higher in the countryside, the market wouldn't likely be rallying like it is.
Wednesday's slaughter is estimated at 126,000 head, steady with a week ago and 2,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $2.44 ($298.30) and select up $2.51 ($283.79) with a movement of 133 loads (95.37 loads of choice, 21.33 loads of select, 3.47 loads of trim and 13.03 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Given that prices have traded in both regions, it's likely that they now remain steady with the week's trend.
FEEDER CATTLE:
Feeders decided that, so long as the cash cattle market was going to rally, they too could look higher corn prices dead in the eye and trade higher as well. It was a good day for the feeder cattle market as promising demand sent the feeder cattle contracts higher through closing even though the nearby corn prices closed $0.03 to $0.09 higher. August feeders closed $1.05 higher at $234.52, September feeders closed $0.87 higher at $237.62 and October feeders closed $0.90 higher at $239.57. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 600 to 925 pounds sold $8.00 to $12.00 higher. Steer calves weighing 400 to 600 pounds sold $20.00 to $30.00 higher. Feeder heifers weighing 700 to 875 pounds sold $8.00 to $12.00 higher and heifer calves weighing between 500 and 700 pounds sold $20.00 to $30.00 higher. Feeder cattle supply over 600 pounds was 78%. The CME Feeder Cattle Index for May 23: up $0.60, $207.36.
LEAN HOGS:
The cattle complex's excitement didn't trickle into the lean hog market, but the deferred contracts did round out the day modestly higher. Volatile pork cutout values continue to keep the nearby contracts on edge, and with Wednesday's closing cutout report, one can see why. Packers moderately supported the cash hog market but not to the point where prices closed any higher but seeing a volume of 12,000 head plus trade is still a win. June lean hogs closed $0.87 lower at $79.80, July lean hogs closed $0.15 lower at $80.82 and August lean hogs closed $0.02 lower at $80.40. Once again, the carcass value close lower because of the belly's volatility as it alone dropped $11.27. The loin fell $1.25 lower, and hams fell $2.02 lower, but those are easier price drops to stomach as opposed to the belly's performance. Pork cutouts totaled 342.91 loads with 305.94 loads of pork cuts and 36.98 loads of trim. Pork cutout values: down $2.63, $80.87. Wednesday's slaughter is estimated at 472,000 head, 6,000 head more than a week ago and 1,000 head less than a year ago. The CME Lean Hog Index for May 22: up $0.52, $80.09.
THURSDAY'S HOG CALL: Steady. Packers could opt to buy a few more hogs in Thursday's market, but then again, they could decide to let the rest of the week pass by as they were somewhat active in Wednesday's market.
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