GENERAL COMMENTS:
Upon hearing confirmation that the first U.S. case of New World screwworm has been found in Texas, both the live cattle and feeder cattle contracts are trading sharply higher. A thin movement of cash cattle has developed in the South Thursday morning at $256 but no new business has developed in the North. July corn is down 7 3/4 cents per bushel and July soybean meal is down $8.40. The Dow Jones Industrial Average is up 923.19 points and NASDAQ is down 28.39 points.
LIVE CATTLE:
Who would have ever thought after hearing about the first positive case of New World screwworm being detected in the U.S. -- the first time in 60 years -- that the cattle complex would trade substantially higher? I think this turn of events really needs to be a reflection point as to how the cattle complex operates, trades and digests information.
It appears in today's environment where digitalized/algorithmic trading has taken over much of the marketplace, the futures complex trades more so on headlines/rumors before knowing the actual facts. We've now seen this play out as clear as day with the NWS situation. It seems although traders pressured the market lower ahead of the actual finding, they now merely feel relieved that a confirmed case has been identified. And in last month's Cattle on Feed report where trades pushed the market sharply lower ahead of the report, assuming that placements would be sharply higher, but then when the data confirmed that, they pushed the market back higher. So let us all make a mental note of this trend and really understand that the futures complex is an anticipatory market that trades on any rumor or on any headline -- it doesn't sit around and wait for the facts. Or as the old saying goes, sell the rumor, buy the fact.
June live cattle are up $2.60 at $249.22, August live cattle are up $3.55 at $241.40 and October live cattle are up $4.47 at $233.35. A light trade is developing in parts of the South at $256, which is steady with Wednesday's trade but $1.00 lower than last week's weighted average. No new trade has developed in the North following Wednesday's light business.
A note about New World screwworm: Last night, USDA confirmed a case of New World screwworm (NWS) was found in the umbilical area of a three-week-old calf in Zavala County, Texas. The under secretary for marketing and regulatory programs at USDA said, "USDA invested heavily in the tools needed to eliminate NWS ever since cases started increasing in Central America and Mexico. The United States has defeated this pest before, and we will do it again." USDA also said they will continue to work with state departments of agriculture, animal health officials, industry, and producers to mitigate economic impacts of restrictions as much as possible, limiting them to defined geographic areas. NWS does not infest meat, fruits, vegetables or other food sources -- the U.S. food supply is safe.
Boxed beef prices are lower: choice down $1.97 ($393.89) and select down $1.95 ($382.48) with a movement of 76 loads (59.81 loads of choice, 5.49 loads of select, 3.19 loads of trim and 7.39 loads of ground beef).
FEEDER CATTLE:
Upon seeing the live cattle contracts shoot higher, the feeder cattle contracts have wasted no time in doing so as well as most of the contracts are currently trading more than $9.00 higher. Aside from wanting to remain in alignment with the live cattle complex, the feeder cattle market may also be trading higher as the finding of NWS in the U.S. likely means the border will remain closed for the distant future. August feeders are up $9.87 at $352.50, September feeders are up $9.92 at $349.25 and October feeders are up $9.57 at $345.47.
LEAN HOGS:
Even though midday pork cutout values are higher, the lean hog complex's momentum seemed to stall out as the cattle contracts rocket-launched higher. June lean hogs are down $0.70 at $95.35, July lean hogs are down $0.57 at $101.42 and August lean hogs are down $0.27 at $99.30. At this point, Thursday's movement simply appears to be a combination of pullback from the market's resistance and a decrease of trader support as the market's immediate attention sits with the cattle contracts.
The projected CME Lean Hog Index for 6/3/2026 is up $0.26 at $92.51 and the actual index for 6/2/2026 is up $0.60 at $92.25. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.27 at $95.64, ranging from $92.00 to $96.00 on 1,415 head and a five-day rolling average of $94.48. Pork cutouts total 115.02 loads with 101.15 loads of pork cuts and 13.86 loads of trim. Pork cutout values: up $2.84, $101.35.
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