GENERAL COMMENTS:
The livestock complex was anything but boring to watch as the cattle contracts remained strong throughout the day despite seeing corn prices jump sharply higher. Some trade was finally reported in the South midday on Friday, and prices were marked at mostly $182 which is $3.00 lower than last week's weighted average. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $8.15 with a weighted average price of $85.17 on 1,564 head. July corn is up 17 cents per bushel and July soybean meal is up $22.20. The Dow Jones Industrial Average is down 107.03 points.
From Friday to Friday, the livestock futures scored the following changes: June live cattle up $0.13, August live cattle down $0.13; August feeder cattle down $4.07, September feeder cattle down $3.52; July lean hogs up $3.23, August lean hogs up $6.72; July corn up $0.36, September corn up $0.70.
**On Monday, June 19, the markets are closed. Regular DTN commentary will resume on Tuesday, June 20. **
LIVE CATTLE:
Even though the live cattle complex endured some pressure midweek, traders elected to trade the complex modestly higher through Friday's end as packers continued to stay engaged in the cash market through Friday's afternoon. Yes, cash cattle prices were slightly lower this past week, but over the course of the last two weeks, the cash cattle market has gained nearly $20.00! And there were reports that some of the cattle that were bought in the North this week were going to be trucked out of feedlots as early as Saturday, June 17, which emphasizes the fact that packers are still short bought and will likely need to remain engaged in the cash market -- even if prices are high. A light trade was reported in the South Friday afternoon at $182, which is $3.00 lower than last week's weighted average. On Thursday, Northern dressed cattle sold mostly for $296 which is $4.00 lower than last week's weighted average, and Northern live sales were marked at $185 to $186 which is $4.00 to $5.00 lower than last week's weighted average. June live cattle closed $0.77 higher at $178.35, August live cattle closed $0.65 higher at $171.72 and October live cattle closed $1.00 higher at $175.35.
Friday's slaughter is estimated at 118,000 head, 3,000 head more than a week ago but 5,000 head less than a year ago. Saturday's slaughter is projected to be around 16,000 head.
Boxed beef prices closed higher: choice up $1.02 ($343.09) and select up $1.37 ($310.95) with a movement of 74 loads (40.21 loads of choice, 12.51 loads of select, 8.82 loads of trim and 12.71 loads of ground beef). Throughout the week choice cuts averaged $339.93 (up $15.44 from last week) and select cuts averaged $309.90 (up $8.39 from last week) and the week's total movement of cuts, grinds and trim totaled 471 loads.
TUESDAY'S CATTLE CALL: Steady. It's hard telling what prices will do next week as packers need to continue to stay engaged in the market so that don't become short bought, but they'll likely try to price cattle lower.
FEEDER CATTLE:
I'm surprised that the feeder cattle contracts were able to stand strong and watch the corn contracts trade $0.17 to $0.24 higher through closing and still keep their market elevated through Friday's end. Thursday's Drought Monitor showed a big increase in drought expansion across the corn belt which is what largely drove corn prices higher throughout Friday's trade. However, the feeder cattle complex did have the live cattle market backing its position as it too traded higher and continues to thrive on the market's impeccable fundamentals. August feeders closed $0.80 higher at $234.92, September feeders closed $0.65 higher at $238.17 and October feeders closed $0.50 higher at $240.30.
The Oklahoma Weekly Cattle Auction Summary shared that, throughout the entire state and when compared to last week, feeder steers traded mostly steady, but feeder heifers sold steady to $3.00 higher. Steer and heifer calves traded $4.00 to $10.00 lower with an increase in unweaned calves apparent. Slaughter cows sold steady to $2.00 higher and slaughter bulls traded steady. The CME Feeder Cattle Index for June 15: down $3.92, $223.76.
LEAN HOGS:
The lean hog complex wasn't as confident about trading higher through Friday's market as the cattle contracts were, but even though the marketplace closed mixed for hogs, the immediate contracts were able to close slightly higher while most of the deferred months closed lower. July lean hogs closed $0.92 higher at $92.85, August lean hogs closed $0.37 higher at $90.67 and October lean hogs closed $0.15 lower at $80.07. It will be interesting to see how the market trades next week as hog prices are now at the highest price point since early May. The next big resistance threshold that could cause the market some grief is at $95.00, which is less than $5.00 away for the spot August contract. It's been incredibly helpful to continue to see support in pork cutout values, which was again the case in today's afternoon cutout report. Pork cutouts totaled 222.59 loads with 201.55 loads of pork cuts and 21.05 loads of trim. Pork cutout values: up $1.44, $92.33. Friday's slaughter is estimated at 455,000 head, 7,000 head more than a week ago and 4,000 head more than a year ago. Saturday's slaughter is projected to be around 22,000 head. The CME Lean Hog Index for June 16: up $0.62, $86.87.
TUESDAY'S HOG CALL: Higher. Given that packers were merely nonexistent in Friday's cash market, they'll likely need to procure a sizeable volume of hogs on Tuesday.
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