GENERAL COMMENTS:
Friday
was a rapid-fire day for the livestock contracts as USDA reports
consumed cattlemen with contracts trading mixed, trying to decide where
the week should end, and lean hog prices jumped through the roof. Hog
prices closed exceptionally stronger on the National Direct Afternoon
Hog Report, up $2.88 with a weighted average of $37.87 on 10,207 head.
December corn is down 1/2 cent per bushel and December soybean meal is
up $0.70. The Dow Jones Industrial Average is down 134.86 points and
NASDAQ is down 65.84 points.
From
Friday to Friday livestock futures scored the following changes: August
live cattle down $1.95, October live cattle down $1.77; August feeder
cattle down $0.65, September feeder cattle down $0.57; August lean hogs
up $1.20, October lean hogs up $0.93.
LIVE CATTLE:
Live
cattle contracts dipped higher and lower through Friday's trade,
feeling anxious as the day was loaded with USDA reports. Neither the
Cattle on Feed report nor the Cattle Inventory report yielded anything
too wild that should vastly affect the market in the upcoming weeks.
Earlier in the day, live cattle contracts were optimistic and traded
stronger, but then endured some midday weakness, to then close mostly
stronger. August live cattle closed $0.47 higher at $101.32, October
live cattle closed $0.50 higher at $105.10 and December live cattle
closed $0.30 stronger at $109.32. Cash cattle trade was mostly
unexciting Friday afternoon as just a handful of cattle traded in
Nebraska and Iowa for $158.00. Friday's slaughter is estimated at
113,000 head, down 2,000 head from the previous week and down 6,000 head
from a year ago. Saturday's slaughter is projected to be around 61,000
head.
Friday's Cattle on Feed report came as
no surprise, as USDA figures aligned closely with analyst's estimates:
cattle on feed steady (11.4 million head), placements up 2% (1.80
million head) and cattle marketed up 1% (1.97 million head). The Cattle
Inventory report was mixed as the 2020 Calf Crop was down 1% but all
cattle and calves in the U.S. was up slightly, when most assumed that
the nation's herd would be slightly lower.
Boxed
beef prices closed lower: choice down $0.49 ($201.77) and select closed
$0.16 ($190.63) with a movement of 117 loads (55.20 loads of choice,
26.12 loads of select, 9.58 loads of trim and 26.31 loads of ground
beef).
MONDAY'S CASH CATTLE CALL: Next week's
trade will be a battle of the minds as feeders are going to try to push
the market $1.00 to $2.00 stronger again, and time will only tell if
packers are willing to continue to chase those prices.
FEEDER CATTLE:
Feeder
cattle contracts closed in a timid fashion as there was built-up
pressure looming around the marketplace before the USDA cattle reports
were released. August feeders closed $0.02 higher at $142.05, September
feeders closed $0.42 lower at $142.75 and October feeders closed $0.62
lower at $142.80. The market merely traded sideways as traders
questioned if last week's aggressive rally was overdone. The countryside
supports stronger prices as feeder cattle continue to sell with strong
support, but the board lost its momentum this week especially as live
cattle contracts weakened.
Earlier this week
Northern Livestock Video Auction hosted their Summertime Classic sale,
selling 145,000 feeders. On average the sale was about $5.00 stronger
than their June sale, and even with the uncertainty surrounding the fat
cattle market, buyers had momentum and their demand for calves and
feeders was commendable. Steer calves weighing 500 to 600 pounds sold
for $158 to $175, steers weighing 600 to 700 pounds sold for $146 to
$170, steers weighing 700 to 800 pounds sold for $141 to $151 and the
heavier steers weighing 800 to 900 pounds sold for $139 to $147. The CME
feeder cattle index 7/23/2020: unavailable at this time.
LEAN HOGS:
The
lean hog market battled some mixed emotions as the day teetered back
and forth on where trade should close for the day. Ultimately nearby
contracts lacked support with deferred contracts closed mildly stronger.
August lean hogs closed $0.47 lower at $54.00, October lean hogs closed
$0.87 lower at $50.15 and December lean hogs closed $0.27 lower at
$51.92. Pork cutouts totaled 337.56 loads with 204.57 loads of pork cuts
and 32.99 loads of trim. Pork cutout values: up $0.86, $70.53.
Friday's
slaughter is estimated at 472,000 head, 10,000 head more than a week
ago and 15,000 head more than year ago. Saturday's slaughter is
projected to be around 231,000 head. And Thursday's hog slaughter was
revised to 471,000 head. The CME lean hog index 7/22/2020: up $0.27,
$49.62.
MONDAY'S CASH HOG CALL: Steady. Hog
prices rallied into the later part of the week and could spur
encouraging trade heading into next week as packers continue to keep hog
slaughter elevated.
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