GENERAL COMMENTS:
Livestock fans watch another mixed marketplace tromp into Wednesday's afternoon as the cattle contracts are trading lower while the lean hog complex continues to trade higher. The biggest buzz of Wednesday's market has been the spike in corn prices which has the feeder cattle complex trading significantly lower. December corn is up 23 cents per bushel and July soybean meal is up $24.90. The Dow Jones Industrial Average is up 22.12 points.
LIVE CATTLE:
Even though corn prices are soaring and boxed beef prices are lower, the live cattle complex has been able to keep its "wits about it" and is only trading slightly lower. Traders know that packer interest will likely improve at some point Wednesday and that feedlots are ready to pass on any bids that come by that are simply too cheap. The seasonal pressure that the market is currently enduring should be expected as the calendar nears July, and then we also must acknowledge the fact that, this Friday, another Cattle on Feed report will be released, which always stirs the skeptic, hesitant waters of the market. August live cattle are down $0.10 at $169.60, October live cattle are down $0.62 at $172.82 and December live cattle are down $0.52 at $176.87. No cash cattle bids have been renewed at this point, but some could be renewed Wednesday afternoon although trade is looking like it could be delayed until Thursday at this point.
Boxed beef prices are lower: choice down $2.58 ($334.33) and select down $2.28 ($305.65) with a movement of 102 loads (62.30 loads of choice, 14.83 loads of select, 12.76 loads of trim and 11.90 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex isn't rosy by any means as corn prices soar $0.17 to $0.23 higher in the nearby contracts. DTN's Senior Market Analyst, Dana Mantini, said that "Corn futures are soaring early on Wednesday, boosted by the worse-than-expected crop ratings decline in Tuesday's crop progress report. New-crop December corn early on Wednesday reached the highest level in seven months, buoyed by the report, in which USDA said that good-to-excellent corn ratings fell by 6 points to 55%, with the portion of the crop that is rated as poor to very poor rose another 4 percentage points to 12%. Key production states, Illinois and Iowa fell by 12 and 11 points, respectively, with Illinois now a dismal 36% good to excellent. Other notable declines were in Wisconsin (down 16 points), North Dakota (14 points), and South Dakota down 12 points." Unfortunately, even though the cattle complex remains in a strong position with limited supplies and superb demand, the market is rattled by the concern on sharply higher feed prices. Feeder cattle buyers have a hard time figuring a profitable breakeven when both feeder cattle and feed prices are high. August feeders are down $4.17 at $227.97, September feeders are down $3.70 at $231.92 and October feeders are down $3.47 at $234.30.
LEAN HOGS:
Even though feed prices are sharply higher, the lean hog complex is rallying into Wednesday's afternoon as traders seem stanchly committed to digging the market out of the hole it was recently in. July lean hogs are up $0.15 at $96.00, August lean hogs are up $0.30 at $93.50 and October lean hogs are up $0.02 at $81.62. Cash hog demand is strong again this morning, but pork cutout values are weaker as the belly continues to decline. If the market is going to keep with its rallying nature, traders are going to want to see a little more support from cutouts.
The projected lean hog index for June 20 is up $0.87 at $89.62, and the actual index for June 19 is up $0.54 at $88.75. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.77 with a weighted average price of $96.03, ranging from $82.00 to $99.00 on 7,461 head and a five-day rolling average of $94.35. Pork cutouts total 184.76 loads with 156.56 loads of pork cuts and 28.20 loads of trim. Pork cutout values: down $1.35, $94.71.
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