GENERAL COMMENTS:
The livestock complex fared extremely well (other than the cash cattle market) as all three contracts were able to close higher, and even the cash hog market closed stronger. Cash hog prices held strong and closed higher on the National Direct Afternoon Hog Report, up $0.29 with a weighted average of $28.68 on 9,930 head. July corn is down 3 1/4 cents per bushel and July soybean meal is down $0.20. The Dow Jones Industrial Average is up 131.14 points and NASDAQ is up 74.90 points.
LIVE CATTLE:
Live cattle contracts jumped on the bandwagon of trading higher throughout Tuesday and were able close stronger all the way through closing. August live cattle closed $2.07 higher at $97.20, October live cattle closed $1.30 higher at $99.87 and December live cattle closed $1.00 higher at $103.52. The August contract tested the waters and, for a while, traded above the $98 threshold, but decided to end in the $97 range.
On the contrary, cash cattle trade hasn't been as bountiful. Live cattle traded in Nebraska for $95.00 to a major packer for the week of 6/29/2020, and dressed cattle sold anywhere from $153 to $155. Live cattle traded in Iowa for $97.00 to $99.00; one packer picked the cattle up already and the other listing was committed for the week of 6/29/2020. Tuesday's slaughter is estimated at 120,000 head, 1,000 head more than a week ago and 3,000 head shy of a year ago.
Boxed beef prices are lower: choice down $2.25 ($211.81) and select down $0.73 ($203.57) with a movement of 205 loads (95.57 loads of choice, 40.20 loads of select, 17.69 loads of trim and 51.99 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to lower. The bottom on the cash market seems to be digging lower and lower with no ambition to stop anytime soon, regardless of what the board is doing.
FEEDER CATTLE:
Feeder cattle contracts rallied throughout the day and closed anywhere from $1.17 to $1.52 higher. Deferred contracts rallied on the upper end of the spectrum but nearby contracts weren't far behind. Tuesday's strength comes as a mixed bag. The complex is undoubtedly happy to see contracts rally and to see support avid throughout the feeder cattle contracts, but knowing that the looming pressure that lies heavily on the market didn’t just disappear overnight makes traders question how long the rally will last. At Blue Grass Stockyards in Lexington, Kentucky, compared to last week, feeder steers under 600 pounds sold steady while steers over 600 pounds sold $1.00 to $3.00 lower. Feeder heifers under 600 pounds sold $1.00 to $3.00 lower and heifers over 600 pounds sold $1.00 to $3.00 higher. Slaughter cows and bulls sold mostly steady. The CME feeder cattle index 6/22/2020: down $0.41, $128.71.
LEAN HOGS:
Not only was the futures market able to close higher, but the cash market closed fully higher, with the market moving a plethora product. The market remains far behind the 100-day moving average of $56.25 and the 40-day moving average of $56.49, but a strong close is extremely bullish, not only for the marketplace but also for producer moral. July lean hogs closed $0.07 higher at $46.90, August lean hogs closed $1.40 higher at $52.50 and October lean hogs closed $1.02 higher at $50.92. Pork cutouts totaled 583.67 loads with 531.90 loads of pork cuts and 51.77 loads of trim. Pork cutout values: down $1.66, $63.18. Tuesday's slaughter is estimated at 468,000 head, 10,000 head more than a week ago and 5,000 head shy of a year ago. The CME lean hog index 6/19/2020: down $0.55, $45.06.
WEDNESDAY'S CASH HOG CALL: Steady. It's phenomenal that the cash market was able to closer higher despite a backlog of hogs, and it was interesting to see that packers bought upwards of 9,930 head. It would be a long shot for the market to close higher two days in a row given the current circumstances, but a steady market may be something the cash market can pull off.
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