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DTN Midday Livestock Comments 06/08 11:44
Southern Feedlots Hold Out for More Money
The livestock market is trying to patiently wait to see what happens in the
South Thursday afternoon as feedlots are making packers pay up for cattle.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The cash cattle market continues to be where the cattle market's focus
remains as Southern feedlots have yet to really let cattle trade. Trade could
break loose later Thursday afternoon or it could just as easily be delayed
until Friday. July corn is up 6 1/4 cents per bushel and July soybean meal is
down $0.00. The Dow Jones Industrial Average is up 155.42 points.
LIVE CATTLE:
The live cattle complex is trading mixed with some of the nearby contracts
trying to trade higher while most of the deferred contracts continue to trade
lower. June live cattle are up $0.72 at $179.72, August live cattle are up
$0.05 at $173.22 and October live cattle are up $0.02 at $175.65. The cash
cattle market continues to be a nail-biting marketplace as Southern feedlots
are committed to getting substantially higher prices this week for their cattle
and continue to refuse to sell them at what packers are currently offering.
Thursday morning bids of $183 to $184 have been offered, but Southern feedlots
are asking $186 to $190. Trade could break loose Thursday afternoon in the
South, or it could just as easily be delayed until Friday.
A light to moderate trade was reported in Nebraska and Iowa Wednesday with
dressed deals marked at mostly $300, $10 higher than last week's weighted
averages, there were even a few head that sold as high as $304. Live sales in
that area had a range of $189 to $191, $3 to $5 higher than last week's
weighted averages. Just a handful of business has been reported in the South
this week with a range of $180 to $184, $3 to $7 higher than last week's
weighted averages.
Beef net sales of 12,800 mt for 2023 were down 29% from the previous week
and 27% from the prior four-week average. The three largest buyers were Japan
(3,900 mt), South Korea (3,900 mt) and Mexico (1,900 mt).
Boxed beef prices are higher: choice up $2.55 ($327.74) and select up $2.15
($303.71) with a movement of 63 loads (22.43 loads of choice, 17.82 loads of
select, 3.90 loads of trim and 18.99 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is back to trading higher as the market notes the
mostly lower trend in corn prices and loves the continued momentum in both the
cash cattle and feeder cattle markets in the country. It doesn't matter if you
spent your time tracking Superior's Corn Belt Classic sale or if you watched
various sales throughout the country, feeder cattle prices continue to trek
higher as buyers are worried about finding enough replacements to restock their
empty pens later this year. August feeders are up $1.37 at $240.47, September
feeders are up $0.92 at $243.20 and October feeders are up $0.62 at $245.17.
LEAN HOGS:
The lean hog complex is again trading lower as traders remain cautious
market participants even though the market's fundamentals are still rather
supportive. July lean hogs are up $0.02 at $86.95, August lean hogs are down
$1.02 at $82.05 and October lean hogs are down $1.12 at $74.62. Today's export
report had little effect on the market as traders were happy to see China
listed as one of the largest buyers, but unfortunately the report didn't help
propel prices higher. With both cash prices and pork cutout values higher, one
would think that traders would be willing to supportive the market, but outside
pressures remain traders' biggest concern for the time being.
Pork net sales of 25,500 mt for 2023 were up 13% from the previous week, but
down 11% from the prior four-week average. The three largest buyers were Mexico
(9,100 mt), China (8,100 mt) and Japan (3,200 mt).
The projected lean hog index for July 7 is up $0.76 at $83.80, and the
actual index for July 6 is up $1.18 at $83.04. Hog prices are higher on the
Daily Direct Morning Hog Report, up $1.63 with a weighted average price of
$94.07, ranging from $84.50 to $96.00 on 8,778 head and a five-day rolling
average of $89.76. Pork cutouts total 175.33 loads with 163.05 loads of pork
cuts and 12.28 loads of trim. Pork cutout values: up $2.32, $87.47.
ShayLe Stewart can be reached shayle.stewart@dtn.com
**
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