With the corn complex holding mostly steady, the cattle contracts have been granted the chance to trade slightly higher after Tuesday’s sharply lower close.
This week’s trade hasn’t been for the lackadaisical as the week’s developments have been quick to change and in drastic measures. Following Tuesday’s sharply lower close in both the live cattle and feeder cattle contracts, Wednesday has lent the cattle complex some opportunity to regain part of its lost position as the corn market trades mostly steady.
July corn is up 2 cents per bushel, and July soybean meal is up $4.10. The Dow Jones Industrial Average is up 132.70 points, and NASDAQ is up 72.29 points.
It’s too bad that the fat cattle market has already seen a moderate movement as boxed beef prices keep scaling higher and theoretically speaking cash cattle should be worth more as well. June live cattle are up $0.97 at $114, August live cattle are up $0.87 at $117.50, and October live cattle are up $1.07 at $122.82.
The minor break in the corn market’s rally has eased some of the pressure looming above the cattle contracts and is allowing for slightly higher trade throughout Wednesday.
For the rest of the cattle that are to sell this week, their odds of demanding higher prices is slim as packers have already procured a moderate movement this week at steady prices in the North, and steady to $1 higher in the South; and we can’t forget to mention that packers have forward bought cattle for this time, so their need to rely solely on the cash market is lessened.
The Fed Cattle Exchange Auction listed a total of 2,153 head, of which 1,091 actually sold, 202 head were scratched from the auction, and 860 head were listed as unsold, as they did not meet the reserve prices, that ranged from $118 to $120. Opening prices ranged from $117 to $117.50, high bids ranged from $117.50 to $119.
The state-by-state breakdown looks like this: Texas 1,967 total head, with 1,038 head sold at $118.50-$119, 727 head unsold, and 202 head were scratched; Nebraska 118 total head, with 53 head sold at $117.75, 65 head went unsold; Kansas 68 total head, all of which went unsold.
Boxed beef prices are sharply higher: choice up $3.95 ($305.17) and select up $3.14 ($287.05) with a movement of 79 loads (51.14 loads of choice, 13.65 loads of select, 4.51 loads of trim and 9.29 loads of ground beef).
The feeder cattle contracts have been alleviated from some of their pressure as the corn market takes a break from its usual $0.20 rally and is only currently rallying by a mere $0.02 to $0.03 in the nearby contracts at noon. May feeder cattle are up $0.85 at $130.60, August feeder cattle are up $0.62 at $143.80 and September feeders are up $0.70 at $146.30.
Given how aggressively the feeder cattle contracts have been pushed lower by the onset of unfathomable input prices and sorry fat cattle prices, the complex has plenty of room to trade higher before feeling any resistance.
The lean hog complex continues to rally as traders see demand thriving throughout the market and know that with shortened supplies of market-ready hogs that tight supplies drive prices higher. June lean hogs are up $0.47 at $114.02, July lean hogs are up $0.80 at $114.22 and August lean hogs ae up $0.90 at $109.37.
For a second day in a row now, the top bid in the cash market has seen a steady increase and cash hog prices continue to scale higher as packers are buying any hogs that become available.
The projected lean hog index for 5/4/2021 is up $0.52 at $107.89, and the actual index for 5/3/2021 is up $0.27 at $107.37. Hog prices are higher on the National Direct Morning Hog Report, up $2.50 with a weighted average of $114.11, ranging from $107.04 to $122.00 on 5,625 head and a five-day rolling average of $111.26. Pork cutouts total 184.40 loads with 158.50 loads of pork cuts and 25.89 loads of trim. Pork cutout values: up $3.11, $114.29.