GENERAL COMMENTS:
Heading
into the weekend, cattlemen are blessed with optimism and now wait to
see where the chips will fall next week. The lean hog sector didn't
close higher Friday, but with commendable slaughter speeds the industry
is flat-out rocking and rolling to get hogs caught back up to current.
Hog prices are lower on the National Direct Afternoon Hog Report, down
$0.09 with a weighted average of $29.09 on 9,705 head. August live
cattle are up $0.75 at $100., August feeder cattle are up $1.23 at
$135.75, August lean hogs are down $0.35 at $49.875, December corn is
down 12 1/4 cents per bushel and December soybean meal is down $5.30.
The Dow Jones Industrial Average is up 369.21 points and NASDAQ is up
69.69 points.
From Friday to Thursday,
livestock futures scored the following changes: August live cattle up
$0.60, October live cattle up $1.90; August feeder cattle up $0.88,
September feeder cattle up $1.48; July lean hogs up $1.25, August lean
hogs up $0.67.
LIVE CATTLE:
Closing
above the $100 mark throughout the complex gives the industry a shot of
bullish morale. The live cattle contracts followed closely behind the
feeder cattle complex, rallying into Friday's close and not seeming to
bat an eye. August feeders closed $0.75 higher at $100.00, October
feeders closed $0.65 higher at $104.57 and December live cattle closed
$0.95 higher at $108.40. Cash cattle trade was aggressive this week as
packers were active early in the week and rallied prices higher. Friday
offered just a little bit of clean-up trade but most of the week's
business was already done. Trade this week in the Southern Plains was
mostly $94 to $97, and in the Northern Plains $155 to $157. Friday's
slaughter is estimated at 119,000 head, 10,000 head more than a week ago
and 2,000 head more than a year ago. This week's slaughter is estimated
at 664,000 head; which would be 0.9% greater than a year ago.
Boxed
beef prices closed mixed: choice up $0.91 ($204.50) and select down
$0.54 ($194.29) with a slim movement of 93 loads (45.23 loads of choice,
23.07 loads of select, 7.57 loads of trim and 17.25 loads of ground
beef).
MONDAY'S CASH CATTLE CALL: Steady.
It's a tough call heading into next week. There's plenty of conversation
being had that Northern feedlots are getting closer to being current
while Southern feedlots still have plenty of cattle to move. Official
reports will come out Monday, but it's likely that packers bought over
100,000 head again this week.
FEEDER CATTLE:
Feeder
cattle contracts saw the optimism throughout the cattle sector and
rallied stronger into the week's close. Fueled by strong sales
throughout the countryside, affordable corn and the simple yearning for
better days -- the feeder cattle complex closed over $1.00 stronger.
August feeders closed $1.22 higher at $135.75, September feeders closed
$1.15 higher at $137.32 and October feeders closed $1.37 higher at
$138.50. Wrapping up the week in Oklahoma, USDA Weekly Cattle Auction
report shared that for the state of Oklahoma, compared to a week ago,
steer and heifer calves sold steady to $5.00 higher on a lighter test as
receipts were smaller this week. Demand continues to be strong for both
feeders and calves. The biggest concern before fall continues to be
weather and drought as the state had temperatures over 100 degrees this
week. The CME feeder cattle index 7/9/2020: up $1.23, $134.92.
LEAN HOGS:
Lean
hog contracts ran out of steam as Friday progressed. August lean hogs
closed $0.35 lower at $49.87, October lean hogs closed $0.70 lower at
$49.85 and December lean hogs closed $0.82 lower at $51.77. Despite the
market's lower close Friday, the week trended higher compared to a last
week's close. As cattle contracts rallied stronger into Friday's closing
hours, attention seemed to shift to the cattle complex instead. It was
encouraging to see pork cutout values carry some of the midday momentum
into closing and pork slaughter continues to run rapidly.
Pork
cutouts totaled 334.01 loads with 270.62 loads of pork cuts and 63.39
loads of trim. Pork cutout values: up $1.83, $68.95. Friday's slaughter
is estimated at 466,000 head, 290,000 head more than a week ago and
6,000 head more than a year ago. This week's slaughter is estimated at
2,606,000 head; which could be 7.7% greater than a year ago. The CME
lean hog index 7/8/2020: down $0.17, $45.18.
MONDAY'S
CASH HOG CALL: Steady. Packers bought a lot of hogs this week through
the cash market. As they continue to run aggressive processing
schedules, they continue to need more hogs. Thankfully, if the industry
can continue to run at this pace, the backlog will become a thing of the
past in due time.
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