The entire livestock sector would be trading higher if the feeder cattle complex wasn’t being pressured by the corn market. Just the live cattle and lean hog contracts are rallying into Friday afternoon.
After Thursday’s bearish afternoon close, the live cattle and lean hog contracts have jumped to Friday’s arrival and are looking to resecure some of the position that Thursday gave up. The feeder cattle contracts are back to bowing down to the corn market, though, as corn prices are anywhere from $0.18 to $0.32 higher.
July corn is up 19 cents per bushel and July soybean meal is up $10.50. The Dow Jones Industrial Average is down 403.77 points and NASDAQ is down 81.80 points.
Attempting to regain some of what the market threw away in Thursday’s sell-off, the live cattle contracts are trading well over $1.00 higher throughout the entire complex. June live cattle are up $1.70 at $121.80, August live cattle are up $1.37 at $122.47 and October live cattle are up $1.20 at $127.77.
Even though Thursday’s sell-off was disappointing, looking at the week the live cattle market and the cash cattle market have had is rather impressive. If Friday’s slaughter can come in at a sizeable level and if packers can run a fast Saturday kill, this week will also be gunning for an impressive slaughter somewhere around 660,000 head, depending on how Friday and Saturday shake out.
I know it can be tempting to see lower boxed beef prices and think the market is subpar. But a seasonal high was fully anticipated and the market’s current boxed beef prices are still allowing packers to make healthy profits. It’s looking like the week’s cash cattle trade is done with as there haven’t been any bids renewed.
Boxed beef prices are lower: choice down $0.78 ($325.47) and select down $1.59 ($285.65) with a movement of 58 loads (32.97 loads of choice, 12.88 loads of select, 5.71 loads of trim and 6.28 loads of ground beef).
Simply put, the feeder cattle contracts are cussing the corn market as they thoroughly enjoyed rallying throughout the earlier part of the week when corn was dogging lower. Thankfully the market’s weaker demeanor comes after the nation’s first big test of feeder cattle prices for the year.
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If you didn’t get a chance to watch Superior’s Corn Belt Classic on Thursday, the market was hot as buyers came charged and ready to buy cattle and program cattle (NHTC, verified natural and GAP 4) especially saw exceptional demand. August feeders are down $0.25 at $157.15, September feeders are down $0.57 at $158.52 and October feeders are down $0.77 at $159.92.
The lean hog complex is somewhat licking its wounds after this last week and attempting to regain some lost positioning before the week’s end. July lean hogs are down $0.30 at $110.70, August lean hogs are up $0.95 at $108.17 and October lean hogs are up $1.92 at $88.85. The market sees more and more support from the October 2021 contract on out into the deferred months, where the market hopes to find more stability.
The cash hog market is lower Friday morning which doesn’t come as an unsettling surprise given how aggressive packers were earlier in the week. Heading into the weeks to come, even though supplies are thin, packers may be a little more cautious of the market until they see some of the week’s demand and performance.
The projected CME Lean Hog Index for 6/17/2021 is down $1.30 at $120.38 and the actual index for 6/16/2021 is down $0.91 at $121.68. Hog prices are lower on the National Direct Afternoon Hog Report, down $3.26 with a weighted average of $116.04, ranging from $113.00 to $134.00 on 2,445 head and a five-day rolling average of $118.50. Pork cutouts total 192.40 loads with 170.29 loads of pork cuts and 22.12 loads of trim. Pork cutout values: up $2.75, $127.58.