GENERAL COMMENTS:
Livestock markets remained mixed in limited trade Thursday, with pre-report pressure developing in lean hog futures trade while all cattle futures closed steady to moderately higher by the end of the trading session. Feeder cattle futures were the bright spot of the complex as traders continue to focus on a generally bullish tone within cash feeder cattle markets over the near future, despite the recent pullback from all-time highs. Moderate activity is expected through the end of the week and in early trade next week, but the upcoming holiday break will dwindle trade activity in the near future. Hog prices closed lower on the Daily Direct Afternoon hog report, down $2.51, with a weighted average of $108.00 on 1,965 hogs. July corn closed down 3/4 at $4.095 and July soybean meal closed down $5.10 at $270.90. The Dow Jones Industrial Average is up 404.41 at 43,386.84.
LIVE CATTLE:
Live cattle futures closed steady to slightly higher, with late-day buying in feeder cattle futures helping to spark an end-of-the-day rally. August futures led the market higher, etching out a rally of 22 cent per cwt in late-day trade, but the rest of the complex remained steady to 10 cents higher, with most contract months ending the day with single-digit gains. Traders continue to focus on the potential for fundamental stability in both cash cattle prices and beef values through the end of the week and the end of June. However, traders remain extremely cautious given the early-week market pressure seen across the entire livestock market. With most contracts dipping below the 40-day moving average during the week, traders are not focused as much on regaining recent highs as they are creating a solid foundation on which to build renewed technical support.
Cash cattle markets remain undeveloped as the country is quiet this afternoon with just a few bids on the table in parts of Nebraska, but they are well below current asking prices of around $228 to $230 in the South, and $376-plus in the North. Packer inquiry should continue to improve as the day progresses, but significant trade volume will likely be delayed until sometime Friday. June live cattle closed $0.10 higher at $221.7, August live cattle closed $0.23 higher at $209.20 and October live cattle closed steady.
Thursday's slaughter is estimated at 105,000 head, 8,000 head less than a week ago and 17,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.11 ($395.05) and select up $3.45 ($379.74) with a movement of 90.95 loads (57.42 loads of choice, 12.63 loads of select, 9.47 loads of trim and 11.43 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Cash cattle activity remains generally quiet late Thursday but should spark additional interest early Friday. Bids continue to develop, but it may be midday or later Friday before active trade is seen in most areas.
FEEDER CATTLE:
Feeder cattle futures quickly became the bright spot of the livestock complex during late Thursday trade. Early market pressure was offset by limited but consistent buying support moving into the complex. This helped to push August feeder cattle futures $1 per cwt higher. Despite pressure early this week and the pullback from recent market highs, the consistency of buyer support is not departing and may continue to help bring additional support to the complex during early July. August feeders closed $1.00 higher at $303.30, September feeders closed $0.78 higher at $303.375 and October feeders closed $0.68 higher at $301.425. The CME Feeder Cattle Index for June 24: up $0.79, $311.39.
LEAN HOGS:
Lean hog futures closed lower Thursday ahead of the June 1st hogs and pigs report. This report is expected to be viewed as generally neutral with limited overall changes from year-ago levels and pre-report estimates. This report is typically a nonissue when it comes to market moves, but once again delivered essentially no surprises. Hog numbers through the country are at 75.1 million head, 100% year-ago levels, and slightly above March 1st levels. Hogs kept for breeding were kept even with last year's levels. The lack of change in numbers and total report levels well within 1% of pre-report expectations will likely cause traders to return market focus back on upcoming pork demand expectations. The largest shifts in breeding intentions were seen in Texas and Nebraska. Texas reported a 15% increase in hogs kept for breeding, while Nebraska posted a 13% increase in breeding hogs. Oklahoma and Pennsylvania reported a more aggressive reduction in hogs kept for breeding.
July lean hogs closed $0.50 lower at $112.325, August lean hogs closed $0.98 lower at $110.25 and October lean hogs closed $0.85 lower at $94.875. Thursday's hog slaughter is estimated at 473,000 head, 13,000 head more than a week ago and 2,000 head less than a year ago. Pork Cutouts totaled 188.32 loads with 158.24 loads of pork cuts and 30.08 loads of trim. Pork cutout values are down $2.16 at $119.65. The CME Lean Hog Index for June 24: up $0.97, $111.41.
FRIDAY'S HOG CALL: Steady. Limited additional end-of-the-week movement is expected early Friday morning. The lack of significant shifts in hog inventories is likely to limit swift and aggressive market moves.
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