Friday Midday Livestock Market Summary - Cattle Complex Trading Higher Thanks to Better Cash Cattle Sales

GENERAL COMMENTS:

Both the live cattle and feeder cattle contracts are trading higher into Friday's noon hour as the market is thankful to see boxed beef prices higher again and is still in awe of Thursday's strong trade in the cash cattle market. Heading into Friday afternoon, be ready for the Cattle on Feed report and for the potential that some more cash cattle trade could develop. August live cattle are up $0.78 at $181.85, August feeder cattle are up $0.15 at $261.6, July lean hogs are down $0.13 at $97.35, July corn is up 1 1/2 cents per bushel and July soybean meal is up $9.40. The Dow Jones Industrial Average is up 107.91 points.

LIVE CATTLE:

Even though no new cash cattle sales have been reported yet Friday, the live cattle complex is back to trading higher as Thursday's impressive trade in the cash market has captivated traders. Also helping matters Friday morning is the fact that boxed beef prices are back to trading fully higher too. Bids are currently offered in Kansas at $188 but no new sales have been reported at this point. More trade will likely develop throughout Friday afternoon, and there's still a chance that Southern live prices could trade higher. On Thursday, Southern live cattle traded for $187, which is $1.00 higher than last week's weighted average, and Northern dressed cattle traded for $300 to $304, which is steady to $4.00 higher than last week's weighted average. June live cattle are up $0.77 at $184.30, August live cattle are up $0.85 at $181.92 and October live cattle are up $0.70 at $184.77.

Boxed beef prices are higher: choice up $1.72 ($311.56) and select up $1.70 ($301.78) with a movement of 71 loads (48.87 loads of choice, 8.56 loads of select, 4.59 loads of trim and 9.40 loads of ground beef).

FEEDER CATTLE:

With the exciting news in the live cattle market (higher cash cattle trade and stronger boxed beef prices) the feeder cattle market is back to trading higher as the entire cattle complex is again encouraged. With the market currently trading at its two-month high, traders will likely allow the complex to trade steady to somewhat higher through Friday's end but not advance the market wildly before see what this afternoon's Cattle on Feed report amounts to. August live cattle are up $0.20 at $261.65, September feeders are up $0.40 at $263.12 and October feeders are up $0.25 at $263.57.

LEAN HOGS:

The lean hog complex is trading mixed into Friday's noon hour as some of the deferred contracts are seeing mild support while the nearby contracts continue to struggle as demand has not been as strong as hoped for. June lean hogs are down $0.17 at $94.35, July lean hogs are down $0.15 at $97.32 and August lean hogs are down $0.15 at $96.87. Midday pork cutout values may be higher, but traders aren't turning the nearby contracts higher as demand has been minimal throughout the earlier part of the week.

The projected CME Lean Hog Index for 5/23/2024 is down $0.14 at $91.63, and the actual index for 5/22/2024 is down $0.05 at $91.77. Hog prices on the Daily Direct Morning Hog Report average $86.88, ranging from $86.00 to $88.00 on 898 head and a five-day rolling average of $87.46. Pork cutouts total 171.06 loads with 158.78 loads of pork cuts and 12.28 loads of trim. Pork cutout values: up $0.78, $99.47.

Friday Morning Livestock Market Update - Trader Positioning Ahead of COF Report Will be Evident

GENERAL COMMENTS:

Weekly export sales were positive, increasing 42% from the previous week. That was not enough to underpin the market throughout the day as traders turned their attention to the Cattle on Feed report and began positioning ahead of the report as Thursday progressed. The report has been known for its surprises and this one will be no exception due to the wide estimate for the placement number. Estimates for the report are for an on-feed number on May 1 of 99.1% of a year ago. Placements in April at 93.3% and marketings at 109.5%. The range of estimates for the on-feed number is 97.9% to 100.5%. Placements again have a wide range of 86.5% to $104.5% and will keep traders cautious going into the report. The range for marketing is from 108.6% to 110.7%. Boxed beef prices were mixed with choice down $2.33 and select up $0.47. The April Livestock Slaughter Report released Thursday showed beef production at 2.30 billion pounds, 11% above April 2023. Cattle slaughter totaled 2.73 million head, up 7% from a year earlier with the average live weight being 1,395 pounds, up 41 pounds from April 2023.

Hogs tried but could not hold the gains that developed Thursday. Support remains elusive with bearish traders trading the trend. The market is overdone to the downside but may remain that way until positive support develops from cash and cutouts. The National Direct Afternoon Hog report showed a gain of $0.44 but was offset by cutouts declining $1.38. Weekly export sales were good at 26,300 metric tons (mt), which may have provided brief early support until the buying dried up. Pork production in April totaled 2.32 billion pounds, up 9% from April 2023. Hog slaughter reached 10.7 million head, up 10% from a year earlier. The average hog weight was one pound lower at 290 pounds. Saturday slaughter is estimated at 12,000 head.

	BULL SIDE		BEAR SIDE
1)	Light cash cattle trade on Thursday at $1 to $2 higher with a few sales $5 higher. Packers did not want to wait until after the report and possibly be short-bought for the week.	1)	Selling in the cattle complex may take place on Tuesday if April placements are higher than the trade expectations.
2)	Higher cash trade would support futures once the Cattle on Feed report is released and digested over the long weekend. There is a discount of cash to futures.	2)	Further selling of cattle futures may be evident Friday as traders position themselves ahead of the report.
3)	The further hog futures decline and the more oversold they become, the greater the potential for a substantial price retracement.	3)	Hog futures continue to post lower lows, keeping sellers aggressive as they trade the trend. Fundamental support remains elusive.
4)	Lower prices should stimulate greater demand. The volume of pork for the Memorial Day weekend may be realized next week as retail will need to restock shelves.	4)	The packers may not be aggressive Friday in the cash market as they may have already purchased sufficient hogs for the week.

Thursday Closing Livestock Market Update - Northern Feedlots Traded Cattle for $300 to $305 -- steady to $5.00 Higher

GENERAL COMMENTS:

The cattle contracts may have rounded out the day on a weaker note in the futures complex, but the cash cattle market achieved yet another victory as prices ranged anywhere from $1.00 to $5.00 higher. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.44 with a weighted average price of $88.27 on 1,679 head. July corn is up 2 3/4 cents per bushel and July soybean meal is down $1.50. The Dow Jones Industrial Average is down 605.78 points.

Thursday's export report shared that beef net sales of 21,500 metric tons (mt) for 2024 were up 42% from the previous week and 32% from the prior four-week average. The three largest buyers were China (5,800 mt), South Korea (5,100 mt) and Mexico 2,900 mt). Pork net sales of 26,300 mt for 2024 were up 24% from the previous week but down 3% from the prior four-week average. The three largest buyers were Mexico (10,300 mt), Japan (4,100 mt) and South Korea (2,600 mt).

LIVE CATTLE:

The futures complex may have cooled down ahead of Thursday's close, but thankfully feedlot managers continued to market their showlists and it paid dividends for them as early Northern sales have been marked at $304 -- which is $5.00 higher than last week's weighted average in Nebraska, and if the week's weighted average ends up being at $304, that's a new all-time high for dressed cattle trade. Southern live cattle have been lightly traded at $187 which is $1.00 higher than last week's weighted average. I have to applaud feedlot managers and their willingness to work the cash cattle market because it's in times like this, that true price discovery is achieved. Well done, friends, what a historic time to be living in!

June live cattle closed $0.65 lower at $183.52, August live cattle closed $0.60 lower at $181.07 and October live cattle closed $0.57 lower at $184.07. The board's performance may be frustrating to see today as one would expect that record-breaking cash cattle sales in the North should have a positive effect on the futures complex. But the Northern plains didn't begin to trade cattle until after the market was closed and traders noted the continued pressure on choice cuts which influenced their decision to turn the complex lower. 

Thursday's slaughter is estimated at 122,000 head -- 2,000 head less than a week and a year ago.

Boxed beef prices closed mixed: choice down $2.33 ($309.84) and select up $0.47 ($300.08) with a movement of 114 loads (80.61 loads of choice, 14.40 loads of select, 8.96 loads of trim and 10.52 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady. Given that cattle have traded now in both regions, it's likely that the week's prices are set.

FEEDER CATTLE:

The feeder cattle complex slumbered through Thursday's end as the market was patiently waiting for some fundamental support to arise but with the Northern plains not trading cash cattle until after the day's closing bell, even the feeder cattle complex closed slightly lower this afternoon. August feeders closed $1.45 lower at $261.45, September feeders closed $1.02 lower at $262.72 and October feeders closed $0.87 lower at $263.32. The feeder cattle complex will likely rally again on Friday as the market will be encouraged by the strong sales in the cash cattle market. The only thing that could be holding traders back is the fact that the month's Cattle on Feed report will be released again tomorrow afternoon which always leaves traders on edge until they see the data. Thankfully the report is expected to showcase fewer numbers of cattle on feed, lighter placements and aggressive marketings so the report should bode well for the cattle complex. The CME feeder cattle index 5/22/2024: not available at this time.

LEAN HOGS:

Yet again, with domestic demand being less than hoped for, the lean hog complex closed lower. June lean hogs closed $0.87 lower at $94.52, July lean hogs closed $0.65 lower at $97.47 and August lean hogs closed $0.52 lower at $97.02. The cash hog market saw a little more support and prices did close slightly higher, but with less than 2,000 head having traded -- it's hard to say that that lent much support to the greater market. Unfortunately, lean hog prices closed lower again with the belly being the biggest reason why as it alone fell $5.01. Pork cutouts totaled 237.35 loads with 212.97 loads of pork cuts and 24.38 loads of trim. Pork cutout values: down $1.38, $98.69. Thursday's slaughter is estimated at 485,000 head -- 6,000 head more than a week ago and 16,000 head more than a year ago. The CME lean hog index: down $0.19, $91.82.

FRIDAY'S HOG CALL: Lower. Given that pork cutout values continue to trade lower, it's likely packers won't pay much attention to the cash sector.

Thursday Midday Livestock Market Summary - Light Southern Trade Beginning to Develop for $1 Higher

GENERAL COMMENTS:

With some light trade beginning to develop in the South for $1.00 higher than last week's weighted average, both the live cattle and feeder cattle contracts are continuing to trend higher. Meanwhile, not even better export news can help turn the lean hog complex higher as its market is frustrated by a lack of domestic demand. July corn is up 3 3/4 cents per bushel and July soybean meal is down $0.70. The Dow Jones Industrial Average is down 245.21 points.

Thursday's export report shared that beef net sales of 21,500 metric tons (mt) for 2024 were up 42% from the previous week and 32% from the prior four-week average. The three largest buyers were China (5,800 mt), South Korea (5,100 mt) and Mexico 2,900 mt). Pork net sales of 26,300 mt for 2024 were up 24% from the previous week but down 3% from the prior four-week average. The three largest buyers were Mexico (10,300 mt), Japan (4,100 mt) and South Korea (2,600 mt).

LIVE CATTLE:

Even though the choice cut is under some slight pressure, the live cattle complex is able to continue to trade higher as the market is encouraged by the light cash cattle trade that's developing in the South at $187, which is $1.00 higher than last week's weighted average. Bids of $300 to $302 dressed are being offered in Nebraska, but with feedlots asking $305 in the North, that bid simply won't do at this point. June live cattle are up $0.27 at $184.45, August live cattle are up $0.32 at $182.00 and October live cattle are up $0.30 at $184.95. Asking prices for cattle left to trade in the South remain firm at $188 to $190, and more trade will need to develop before the week's end.

Boxed beef prices are mixed: choice down $2.50 ($309.67) and select up $1.35 ($300.96) with a movement of 60 loads (39.66 loads of choice, 7.26 loads of select, 6.91 loads of trim and 6.64 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is continuing to grind higher as the market is encouraged by the early developments in this week's cash cattle market. Yes, corn prices are trading slightly higher, but traders are finding more support in the early notes of cash cattle sales than they are worried about $0.03 gains in the corn complex. Not to mention, sales in the countryside remain extremely strong, which is evident by the CME Feeder Cattle Index closing at $248.44 Wednesday afternoon. August feeders are up $0.15 at $263.05, September feeders are up $0.30 at $264.05 and October feeders are up $0.32 at $264.45.

LEAN HOGS:

Even though export sales were slightly better for the hog complex, the market continues to trade lower as pork cutout values continue to drop. June lean hogs are down $0.52 at $94.87, July lean hogs are down $0.45 at $97.67 and August lean hogs are down $0.42 at $97.12. Unfortunately until the hog complex finds some support, the technical downward spiral will likely continue.

The projected CME Lean Hog Index for 5/22/2024 is down $0.05 at the actual index for 5/21/2024 is down $0.19 at $91.82. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality. However, we can see that 969 head have traded and the market's five-day rolling average now sits at $87.97. Pork cutouts total 151.05 loads with 130.23 loads of pork cuts and 20.82 loads of trim. Pork cutout values: down $0.51, $99.56.