Friday Closing Livestock Market Summary - Softer through the Livestock Markets

GENERAL COMMENTS:

The livestock complex more or less checked out Thursday afternoon after feeder cattle sales were finished and the hogs and pigs report was released. Friday traded mostly uneventful through the day, seeming to look for the weekend and without much interest. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.18 with a weighted average of $28.48 on 6,201 head. July corn is down 1/4 cent per bushel and July soybean meal is down $3.40. The Dow Jones Industrial Average is down 730.05 points and NASDAQ is down 259.78 points.

From Friday to Friday, livestock futures scored the following changes: June live unchanged, August live cattle up $0.63; August feeder cattle up $0.05, September feeder cattle down $0.10; July lean hogs down $3.18, August lean hogs down $4.68.

LIVE CATTLE:

Live cattle closed lower Friday afternoon with nearby contracts faring better than deferred. Unfortunately, as the industry grapples with knowing that there is a surplus of cattle lining the bunks of feedlots, cash cattle prices are bound to drop lower. August live cattle closed $0.05 lower at $96.02, October live cattle closed $0.17 lower at $99.47 and December live cattle closed $0.47 lower at $103.07. This week was rough on the cash cattle market as this week's trade ranged from $152 to $156 dressed in the North ($5.00 to $11.00 cheaper than a week ago) and live cattle traded for $93 to $97 ($5.00 cheaper than a week ago) in the South. Friday's slaughter is estimated at 119,000 head, steady with a week ago and 2,000 head shy of a year ago. Saturday's kill is projected to be around 82,000 head, 23,000 head more than a week and year ago.

This week's kill is estimated at an enormous 680,000 head, which is 3.7% greater than a week ago and 1.5% greater than a year ago. The USDA shared that the last time cattle slaughter exceeded 680,000 head was for the week ending March 28, 2020, which totaled exactly 684,835 head. Slaughter speeds are anticipated to be higher due to next week being the Fourth of July holiday, as plants know that next week's production may be limited.

Boxed beef prices closed lower: choice down $1.09 ($207.17) and select down $1.08 ($198.85) with a movement of 135 loads (61.28 loads of choice, 18.29 loads of select, 22.53 loads of trim and 32.88 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Lower. With looming supply burdening the industry, cash cattle prices are going to get worse before the get better.

FEEDER CATTLE:

Cheap corn and the ruthless will of a cattle feeder's heart rallied feeder cattle sales this week. The two large sales that took place Thursday throughout the countryside surprised most as prices were easily $6.00 to $12.00 stronger than anticipated. Feeder cattle contracts closed lower Friday afternoon, with deferred contracts taking a bigger hit than nearby contracts. August feeders closed $0.65 lower at $132.60, September feeders closed $0.72 lower at $133.77 and October feeders closed $0.72 lower at $134.72. The market closed above both the 40-day moving average ($129.98) and the 100-day moving average ($127.00).

The USDA reported that for South Dakota's Weekly Cattle Auction Summary, compared to last week, feeder steers and heifers sold steady to $2.00 higher with a few instances of $3.00 to $5.00 higher on light fleshed heifers. Demand was good for yearlings and heifers as well. The CME feeder cattle index 6/25/2020: up $0.22, $130.04.

LEAN HOGS:

Thursday's bearish quarterly hogs and pigs report didn't help the complex whatsoever come Friday. Lean hog contracts scaled lower closing $1.15 to $3.52 lower throughout the entire complex. July lean hogs closed $1.65 lower at $45.27, August lean hogs closed $3.20 lower at $48.12 and October lean hogs closed $3.52 lower at $47.00.

Pork cutouts totaled 482.18 loads with 436.98 loads of pork cuts and 45.20 loads of trim. Pork cutout values: up $0.90, $65.95. Friday's slaughter is estimated at 472,000 head,15,000 head greater than a week ago and 19,000 head greater than a year ago. Saturday's slaughter is projected to be 323,000 head. This week's hog kill is estimated at 2,641,000 head, which is 2.1% greater than a week ago and a substantial 10.7% above a year ago. The CME lean hog index 6/24/2020: down $0.23, $44.87.

MONDAY'S CASH HOG CALL: Lower. With supply being bountiful, cash prices are going to suffer as packers won't have to work at getting hogs.

#completeherdhealth

Friday Midday Livestock Market Summary - Coasting Through the Day

General Comments

Heading into Friday's noon hour the industry seems to be taking a deep breath out slowly after all of what Thursday processed - the board was higher; the hogs and pigs report came out and the feeder cattle market was avidly tested. Friday's markets aren't near as ambitious as all three livestock contracts are trading lower and cash markets are either lower (hogs) or extremely idle (cattle). July corn is up 1/4 cent per bushel and July soybean meal is down $2.70. The Dow Jones Industrial Average is down 643.28 points and NASDAQ is down 196.84 points.

LIVE CATTLE

Live cattle contracts are kicking the can lower down the road as cash cattle prices sit mostly quiet thus far through the day. August live cattle are down $0.37 at $95.70, October live cattle are down $0.37 at $99.27 and December live cattle are down $0.42 at $103.12. Packers have inquired on some cattle throughout the countryside, but bids are scarce indicating that the bulk of this week's trade is down. There has been a moderate amount of trade transpire this week with cattle in the North selling for $152 to $156, and cattle in the South selling from $93 to $97.

Boxed beef prices are lower: choice down $0.68 ($207.58) and select down $0.17 ($199.76) with a movement of 95 loads (37.29 loads of choice, 12.08 loads of select, 20.40 loads of trim and 24.79 loads of ground beef).

FEEDER CATTLE

After Thursday's highly anticipated run of feeder cattle sales, feeder cattle contracts coast into Friday feeling an immense amount of pressure relieved now that those sales are over. Feeder cattle prices were far higher than most assumed given the current challenges the industry is facing. Feeders saw an opportunity to buy exceptional calves and liked how corn prices were in their favor! Heading into the second half of Friday, feeder cattle contracts are lower and have traded mostly lower throughout the day. August feeders are down $0.55 at $132.70, September feeders are down $0.65 at $133.85 and October feeders are down $0.80 at $134.65.

Northern's Sale Recap: https://www.northernlivestockvideo.com/…

Superior's Sale Averages: http://www.superiorlivestock.com/…

LEAN HOGS

Lean hog contracts are feeling even more pressure after Thursday's hogs and pigs report solidified the fact that the industry will struggle with the built-up supply of readily available hogs for quiet some time. July lean hogs are down $1.55 at $45.37, August lean hogs are down $3.47 at $47.85 and October lean hogs are down $3.42 at $47.10. As Thursday's report came as another bitter reminder of how COVID-19 has affected the livestock markets; there is some comfort in knowing that the industry is against instead of dancing around the unknown.

The projected lean hog index for 6/25/2020 is up $0.36 at $45.23, and the actual index for 6/24/2020 is down $0.22 at $44.87. Hog prices are lower on the National Direct Morning Hog Report, down $0.17 with a weighted average of $28.49, ranging from $24.00 to $30.00 on 5,856 head and a five-day rolling average of $28.55. Pork cutouts total 274.73 loads with 243.76 loads of pork cuts and 30.97 loads of trim. Pork cutout values: up $0.93, $65.98.

#completecalfcare

Friday Morning Livestock Market Summary - Hog Market Pressure Expected Following Hogs and Pigs Report

General Comments:

Cash cattle is expected to have set the market range for the week with trade over the last couple of days hovering around $95 to $97 per cwt live basis and $152 to $156 per cwt. This is generally steady to $2 per cwt lower than midweek levels, and $5 to $8 per cwt lower than last week's price levels. There could be some clean-up trade on Friday, but it is unlikely that any significant developments in price levels will develop. Compared to the past few weeks, cash cattle prices have remained in a relatively narrow trading range, which is encouraging. The fact that prices are not swinging within a $10 to $20 price everyday means that some additional cash market structure is starting to return to the volatile cash market of the last two months. This will allow feeders to get a better feel for where markets are moving rather than having to wait until next week when price averages are released. Futures trade is expected mixed early Friday morning. The underlying firmness in feeder cattle futures driven by stronger cash feeder cattle sales through the week as well as increasing overall open interest building through late June is expected to help build on support levels at or above the $96 per cwt price levels in spot month August contracts. Friday slaughter is expected at 118,000 head.

Early movement in lean hog trade Friday morning is expected to be focused on the quarterly Hogs and Pigs report. Price pressure is likely to quickly develop in nearby contracts as bearish overall hog numbers compared to pre-report estimates are likely to put pressure on most 2020 contract months. Total hog supplies as of June 1 are 5% above year-ago levels. The expectation that packer shutdowns and a growing hog supply going into the COVID-19 pandemic makes it obvious that hog numbers are actively increasing. But the fact that hogs over 120 pounds have seen the largest increase in numbers will not only create concerns of a backlogged hog supply over the near term, but well into fall. The reduction of hogs kept for breeding as of June 1 and reduced farrowing intentions is expected to cause long-term support with a smaller hog herd heading into 2021. This may spark moderate-to-firm buyer support in deferred contracts Friday. Cash hog prices are expected $1 lower to 50 cents higher with most bids expected steady to weak. Slaughter Friday is expected at 468,000 head. Saturday runs are expected at 309,000 head.

	BULL SIDE		BEAR SIDE
1)	Active cash feeder cattle prices are seen through late-week activity with increased buyer support in the active video auctions on Thursday. This support in cash markets continues to focus on long-term support expected to develop in the cattle complex through late fall winter months.	1)	Cash cattle prices continue to erode lower through the week, with the established market trend showing a $5 to $8 per cwt price drop from last week's levels. The continued pressure in cash cattle markets could continue as boxed beef prices are still unsupported.
2)	August live cattle futures are holding well above short-term support levels of $95.12 per cwt, creating the potential for follow-through buyer support to build through the next couple of weeks.	2)	Continued concerns of summer beef demand are still creating uncertainty through the entire market. The volatile price movement in wholesale and retail price levels over the last three months have caused many consumers to remain cautious about stepping back into the market to purchase needed supplies. Sluggish food service demand is still expected to slow demand recovery over the near future.
3)	Cash hog prices have started to firm through the end of the week with prices focusing on increased packer demand. This is likely to create more need for packers to get into a more traditional routine of buying hogs, putting more emphasis on cash market movement through the end of June and early July.	3)	Hog numbers increased 5% over year-ago levels in Thursday's quarterly Hogs and Pigs report. This is well above pre-report estimates and is likely to create moderate-to-active pressure during early Friday trade.
4)	Farrowing intentions in June through November are expected to be significantly reduced with expected farrowing levels to be 95% of year-ago levels. This will help to contract the overall herd size, leading to tighter supplies through most of 2021.	4)	Increased numbers of hogs weighing 120 to 179 pounds and 180 pounds and higher focused on burdensome supply of hogs ready for market over the next several months. This will continue to put pressure on prices not only in August futures, but will carry the bearish market trend through most of 2020.

#completecalfcare

Thursday Midday Livestock Market Summary - Contracts Look for Higher Prices

General Comments

Livestock contracts are battling the obvious pressures of the market to trade higher through Thursday and the lean hog and feeder cattle contracts are doing so but the live cattle contracts are fighting some added resistance. It helps that the cash hog market was higher Thursday morning and that the two feeder cattle specialty sales (Northern and Superior's Sales) are underway. Heading into the afternoon pork participants are ready to get their eyes on the latest quarterly hogs and pigs report which comes out Thursday afternoon. July corn is down 7 1/4 cents per bushel and July soybean meal is down $2.30. The Dow Jones Industrial Average is up 51.58 points and NASDAQ is up 37.81 points.

LIVE CATTLE

The live cattle market is trading on opposite ends of the spectrum as the board moves higher while cash cattle prices continue to crumble. The biggest blessing of the morning is that the feeder cattle market seems to be largely unaffected by the cash cattle market's weakness. August live cattle are down $0.02 at $96.30, October live cattle are up $0.17 at $99.80 and December live cattle are up $0.30 at $103.65. Thus far there has been only a light trade in Texas at $95 -- $6.00 lower than last week's weighted average. Asking prices hold at $98 to $100 in the South while cattle in the North are priced at $160 dressed.

Boxed beef prices are lower: choice down $1.75 ($207.94) and select down $1.11 ($200.58) with a movement of 123 loads (65.08 loads of choice, 17.68 loads of select, 21.97 loads of trim and 18.53 loads of ground beef).

FEEDER CATTLE

It's a feeder cattle junkie's dream this Thursday ... Even though there are enough reasons in the marketplace to be as bearish as the scrooge himself, the live cattle market is trending higher, feeder cattle contracts are higher and the two specialty sales taking place right now on Northern's Livestock Video Auction and Superior's Livestock Auction are faring considerably well -- I will report prices once the sales are complete. August feeders are up $0.95 at $133.85, September feeders are up $0.80 at $134.97 and October feeders are up $0.75 at $135.92.

LEAN HOGS

Lean hog contracts are rallying into Thursday's noon hour as pork demand is strong through the retail sector and packers are playing a little extra for cash hogs Thursday morning. July lean hogs are up $0.72 at $46.65, August lean hogs are up $0.15 at $51.40 and October lean hogs are up $0.12 at $50.35. Heading into the afternoon all hog participants will be watching closely for the quarterly hogs and pigs report which will debut insight into the U.S. herds since COVID-19.

The projected lean hog index for 6/24/2020 is down $0.22 at $44.87 and the actual index for 6/23/2020 is down $0.07 at $45.10. Hog prices are higher on the National Direct Morning Hog Report, up $0.28 with a weighted average of $28.77, ranging from $24.00 to $31.50 on 5,461 head and a five-day rolling average of $28.56. Pork cutouts total 163.01 loads with 126.56 loads of pork cuts and 36.44 loads of trim. Pork cutout values: up $0.92, $68.60.

#completecalfcare