Feeder cattle futures could care less that the live cattle and lean hog contracts are skeptical; when corn trades lower feeders find themselves an opportunity and capitalize on it.
Feeder cattle futures are the only livestock contracts really taking full advantage of Thursday’s support as both live cattle and lean hog contracts have contradicting signals to manage. Heading into Thursday afternoon the market will be anxious to see what USDA’s quarterly Hogs and Pigs report yields and what cash cattle trade develops into.
July corn is down 9 1/2 cents per bushel and July soybean meal is down $4.40. The Dow Jones Industrial Average is up 238.64 points and NASDAQ is up 135.88 points.
Live cattle futures are caught between a rock and hard spot as the market likes the idea of trading higher but doesn’t feel like the nearby contracts can do so considering the undeveloped cash cattle market. The hype surrounding the feeder cattle rally given the lower trending corn market has allowed for some of the deferred live cattle contracts to rally; but nearby contracts are skeptical.
August live cattle are down $0.35 at $122.52, October live cattle are steady at $128.17 and December live cattle are up $0.17 at $131.67. If the technical side of the market can trade fully higher, it may add enough pressure to the cash cattle market to persuade packers into paying at least $1.00 higher if not more.
There are a few scattered bids on the table thus far but largely the market is still oddly quiet. There’s been a few cattle trade in Nebraska at $126 Thursday morning but otherwise the market’s yet to see any substantial trade develop.
Beef net export sales of 16,900 metric tons (mt) reported for 2021 were up 31% from the previous week, but down 3% from the prior four-week average. The three largest buyers were South Korea (6,700 mt), Japan (4,000 mt) and China (1,600 mt).
Boxed beef prices are mixed: choice down $4.19 ($307.86) and select up $1.00 ($276.41) with a movement of 70 loads (40.21 loads of choice, 13.35 loads of select, 10.29 loads of trim and 6.57 loads of ground beef).
The feeder cattle market is thankfully trading higher amid a lower trending corn complex. It is also savoring the sweet essence of higher trade as Northern is hosting their Early Summer Special sale Thursday. August feeders are up $1.10 at $156.80, September feeders are up $0.85 at $158.92 and October feeders are up $0.87 at $160.85. The market is indeed trending higher but is still timid of pushing past the resistance in the spot August contract at $162.00.
Ahead of Thursday afternoon’s quarterly Hogs and Pigs report, the lean hog market is trying to trudge through another day of mixed market signals. The futures complex is seeing minor support creep into some of the deferred contracts, but the nearby contracts are still feeling heavily pressured. July lean hogs are down $3.95 at $100.57, August lean hogs are down $1.20 at $99.52 and October lean hogs are down $0.20 at $83.65.
The volatility in the pork cutout values lives on as the morning’s pork cutout report shared that the day’s cutout was up $7.00. These violent swings are likely to be the market’s tone until a bottom to this downward spiral is found.
Pork net export sales of 28,600 mt reported for 2021 were down 2% from the previous week and 4% from the prior 4-week average. The three largest buyers were Mexico (11,500 mt), Canada (5,200 mt) and Japan (3,200 mt).
The projected CME Lean Hog Index for 6/22/2021 is down $1.14 at $119.59, and the actual lean hog index for 6/21/2021 is up $0.05 at $120.73. Hog prices are lower on the National Direct Morning Hog Report, down $6.61 with a weighted average of $116.33, ranging from $110.00 to $125.00 on 4,615 head and a five-day rolling average of $119.10. Pork cutouts total 163.02 loads with 143.96 loads of pork cuts and 19.05 loads of trim. Pork cutout values: up $7.00, $114.82.