Weaker corn prices call for stronger cattle prices as the cattle market has long waited its turn to trade higher.
Even though corn prices are still plenty high for feedlots liking, any downward trade is a good day in their books. Both the live cattle and feeder cattle contracts are soaking up the day’s opportunity to trade higher while the corn market ispressured to trade lower. If the market can keep this progression through the day, it may have a positive effect on the cash cattle market.
July corn is down 1 3/4 cents per bushel and July soybean meal is up $3.40. The Dow Jones Industrial Average is down 472.60 points and NASDAQ is down 318.74 points.
Live cattle futures are battling for higher prices. Even though the market faced some minor resistance through midmorning, the market is now back to trading fully higher. June live cattle are up $0.70 at $119.30, August live cattle are up $0.60 at $122.65 and October live cattle are up $0.50 at $126.65.
Even though the morning’s online auction is done, the market is still quiet without any bids placed by packers and without feedlots seeming to be in too big of a hurry as they sit back and watch the corn market trade lower. The market will see more cash cattle trade develop but it could wait until potentially Thursday to break loose. Asking prices are noted in the South at $120 and in the North at $193.
The Fed Cattle Exchange Auction listed a total of 2,749 head, of which 1,458 actually sold, 82 head were scratched from the auction and 1,209 head were listed as unsold, as they did not meet the reserve prices, which ranged from $118.25 to $120. Opening prices ranged from $117.50 to $119, high bids ranged from $118.50 to $120.25.
The state-by-state breakdown looks like this: Texas 1,712 total head, with 82 head scratched from the auction, and 1,158 head sold at $119.25-$120.25, 472 head unsold; Nebraska 783 total head, with 232 head sold at $120, 551 head unsold; Kansas 254 total head, with 68 head sold at $120.00, 186 head unsold.
Boxed beef prices are higher: choice up $2.34 ($314.71) and select up $1.39 ($297.73) with a movement of 67 loads (39.12 loads of choice, 6.34 loads of select, 12.22 loads of trim and 9.09 loads of ground beef).
As the corn market trades mostly lower, the feeder cattle contracts are hoping corn will keep in a mostly downward spiraling trend. May feeders are up $0.75 at $136.07, August feeders are up $0.77 at $149.62 and September feeders are up $0.97 at $151.45.
There’s still a lot that could develop Wednesday, but currently the lower corn prices mixed with the fact that fat cattle are seeing a slight increase in price, all while be accompanied by stronger boxed beef prices, encourages the feeder cattle market. But, as always, if the corn market makes a turn and scales for higher ground, the feeder cattle contracts will face a tough fight once again.
Lean hog futures are trying to hold a rally in the nearby contracts while the deferred contracts trade lower. Some of the deferred contracts pressure could be stemming from the WASDE report as the second quarter of 2021 is forecast to be the highest earning quarter for the year and from there the market sees a gradual decline all the way until year’s end. June lean hogs are up $0.92 at $112.10, July lean hogs are up $0.62 at $112.05 and August lean hogs are up $0.80 at $107.55.
The projected CME Lean Hog Index for 5/11/2021 is up $0.22 at $110.95, and the actual index for 5/10/2021 is up $0.63 at $110.73. Hog prices are lower on the National Direct Moring Hog Report, down $0.10 with a weighted average of $111.61, ranging from $105.76 to $124.00 on 5,550 head and a five-day rolling average of $110.97. Pork cutouts total 168.41 loads with 142.79 loads of pork cuts and 25.62 loads of trim. Pork cutout values: up $4.90, $118.10.