GENERAL COMMENTS:
As perplexing as it may be, all three livestock markets rallied through Monday's closing. Cattle contracts closed with the biggest rally, but the deferred lean hog contracts weren't all that far behind. Hog prices are unavailable on the National Direct Afternoon Hog Report due to packer submission problems. September corn is up 3 cents per bushel and December soybean meal is up $1.80. The Dow Jones Industrial Average is up 459.67 points and NASDAQ is up 226.02 points.
LIVE CATTLE:
Live cattle contracts closed above $100 throughout the complex, which was a strong close that begs the question -- is this going to last or will the market's pressure of plentiful supply, heavier weights and weakening boxed beef prices erode the contracts to lower prices?
August live cattle closed $0.70 stronger at $100.10, October live cattle closed $1.25 higher at $103.92 and December live cattle closed $1.12 higher at $107.05. So far, the countryside has just seen a mild sampling of trade as most packers as still just inquiring about cattle. There were some cattle that traded in Kansas for $95 for immediate delivery to be killed this week. Bids and asking prices have yet to be established, but seeing that the board has traded higher now for a handful of days ... feeders are anticipated to prices cattle higher this week. Last week's slaughter totaled 593,000 head, with 109,000 head processed Friday and no cattle slaughtered Saturday. Monday's slaughter is estimated at 119,000 head, 2,000 head less than a week ago and steady with a year ago.
Boxed beef prices closed mixed: choice up $0.02 ($205.46) and select down $1.79 ($196.97) with a movement of 169 loads (91.91 loads of choice, 24.67 loads of select, 21.04 loads of trim and 31.79 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. The market will either dance with steady prices or teeter lower again this week. Packers have been diligent about buying cattle consistently and for the most part, they've been mostly scheduled for early delivery. July will pressure the fat cattle market as there's an enormous amount of cattle to be processed.
FEEDER CATTLE:
Feeder cattle contracts were not shy about trading higher all throughout the day and closed anywhere from $0.55 to $1.37 stronger. August feeders closed $1.27 higher at $136.15, September feeders closed $1.37 higher at $137.22 and October feeders closed $1.15 higher at $137.85. Sales that took place early in the week last week fared quite well, but interest dwindles as the week progressed and got closer to the holiday weekend. Last week's auction summaries shared that, for the state of Nebraska, compared to the previous week, yearling steers sold mostly steady and yearling heifers over 650 pounds sold steady to $5.00 stronger. Demand was good with several buyers wanting cattle immediately. Some of the cattle came off grass while others were pulled from the grow yards. There's been more and more slaughter cows and bulls hitting the market as some areas of the state are showing great signs of dryness. The CME feeder cattle index 7/2/2020: down $0.17, $128.88.
LEAN HOGS:
The lean hog complex was able to close the day higher with nearby contracts closing just slightly higher; deferred contracts closed near $1.00 higher. July lean hogs closed $0.22 higher at $44.95, August lean hogs closed $0.7 higher at $49.27 and October lean hogs closed $0.70 higher at $49.05. 2020 contracts seem to be bearish through the end of the year as plentiful supply continues to be an issue, but as the calendar turns to 2021, prices look more optimistic. Pork cutouts totaled 467.53 loads with 414.56 loads of pork cuts and 52.97 loads of trim. Pork cutout values: down $2.12, $64.34. Last week's slaughter totaled 2,043,000 head, with 176,000 head on Friday and no hogs processed Saturday. Monday's slaughter is estimated at 452,000 head, 16,000 head less than a week ago and 31,000 head less than a year ago. The CME lean hog index 7/1/2020: down $0.26, $45.02.
TUESDAY'S CASH HOG CALL: Steady. Without knowing exactly what the cash market is trading for (packer submission problems), the long-term trend leans toward steady trade. There's obvious pressure on the market as ample supply continues to be an issue, but if packers have lofty kills planned, sometimes they have to up their bids to get the hog they need immediately.
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