General Comments
Livestock contracts jump into the afternoon relentless to weaken as all three markets see various contracts jump over $1.00, and some even $2.00 higher. The morning's strong export report helped boost the market's morale and the underlying support and bullishness that's stemming from the countryside continues to fuel the momentum. December corn is up 4 1/2 cents per bushel and December soybean meal is up $2.10. The Dow Jones Industrial Average is down 152.54 points and NASDAQ is down 142.52 points.
LIVE CATTLE
Live cattle contracts are on to higher prices as the feeder cattle complex paves a way for the live cattle contracts to follow. August live cattle are up $0.90 at $102.20, October live cattle are up $1.35 at $105.90 and December live cattle are up $1.37 at $109.55. Breaking out of the sideways trade is truly refreshing and now the industry patiently waits to see if the rally will hold strong through closing. Feeders are likely how the board is trading and are trying to get their full asking prices out of packers this week for the remaining cattle they'd like to sell. Bids of $157 are noticed throughout the countryside but hopes of $158 to $160 are still strong in the North. Packers are expected to inquire more on cattle throughout the day and could very likely up their bids.
Thursday's export report shared that beef net sales of 27,800 mt were reported for 2020 which was up noticeably from the previous week and up 68% from the prior four-week average. The three primary increases were from South Korea (7,900 mt including decreases of 400 mt), Japan (6,300 mt including decreases of 400 mt) and Mexico (3,600 mt including decreases of 100 mt).
Boxed beef prices are higher: choice up $0.37 ($201.13) and select up $0.05 ($191.42) with a movement of 92 loads (53.65 loads of choice, 17.83 loads of select, 5.65 loads of trim and 15.25 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts continue to spring forward as half of the complex trades over $2.00 higher. August feeders are up $2.37 at $141.80, September feeders are up $2.52 at $142.07 and October feeders are up $2.42 at $142.92. As the market rallies to prices not seen since early this spring, the industry is pushing this rally as feeder cattle prices rolled far stronger than assumed this spring/early summer. With Western Video Market's sale concluding this week, buying interest was evident especially on weaned calves and on programmed (NHTC or GAP) yearlings. As the week starts to near the finishing line, producers are anxious that the market can keep its strength not only through Thursday but through the end of the week.
LEAN HOGS
Lean hog contracts are surging higher in nearby contracts and are modestly rallying in deferred. August lean hogs are up $2.25 at $52.42, October lean hogs are up $1.65 at $51.07 and December lean hogs are up $1.22 at $52.22. Unfortunately, the cutout value gave up some of the headway Wednesday secured, but with strong export sales the market is rallying onward.
Pork net sales of 38,500 mt were reported for 2020 which was up 22% from the previous week and up 16% from the prior four-week average. The three primary increases were from Mexico (10,100 mt including decreases of 400 mt), China (8,000 mt including decreases of 800 mt) and Canada (5,700 mt including decreases of 400 mt).
The projected lean hog index for 7/15/2020 is up $0.39 at $47.49, and the actual index for 7/14/2020 is up $1.02 at $47.10. Hog prices are lower on the National Direct Morning Hog Report, down $0.31 with a weighted average of $31.15, ranging from $30.00 to $31.32 on 3,326 head and a five-day rolling average of $30.33. Pork cutouts total 197.31 loads with 184.48 loads of pork cuts and 12.83 loads of trim. Pork cutout values: down $2.11, $66.84.
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