GENERAL COMMENTS:
Tuesday shaped up to be a strong day for the livestock sector. All three markets were able to close with exciting drivers and look to Wednesday to further that movement. Cash hog prices closed just slightly lower on the National Direct Afternoon Hog Report, down $0.02 with a weighted average of $42.61 on another large volume of hogs traded -- 12,786 head sold. December corn is down 4 1/2 cents per bushel and December soybean meal is down $4.00. The Dow Jones Industrial Average is down 205.49 points and NASDAQ is down 134.18 points.
LIVE CATTLE:
The board was able to close higher throughout the market, feeling fueled by the excitement in feeder cattle contracts and encouraged by the stronger trend in cash cattle prices. August live cattle closed $0.47 higher at $100.90, October live cattle closed $1.17 higher at $105.00 and December live cattle closed $0.80 higher at $108.87. It's going to be an interesting cash cattle week as packers are not interested in paying feeder's full asking price, but feeders seem unwilling, at this point, to accept anything less in the north. There were some cattle that traded in Kansas and Texas Tuesday afternoon for $95 to $97 -- the upper end of trade puts prices $1.00 to $2.00 stronger so far this week. Tuesday's slaughter is estimated at 119,000 head -- 1,000 head more than a week ago and steady with a year ago.
Boxed beef prices closed mixed: choice up $0.41 ($202.96) and select down $1.81 ($188.32) with a movement of 124 loads (63.99 loads of choice, 36.71 loads of select, 14.60 loads of trim and 8.68 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Slightly stronger. Watching cash cattle trade this week is going to be fun. Southern cattle are most likely going to trade with a stronger tone, but the real question surrounds the lighter showlists in the north. It wouldn't be surprising to see northern cattle wait until the later part of the week and sell for full asking prices as feeders are quite adamant about getting $160 this week.
FEEDER CATTLE:
Feeder cattle contracts closed the day fully higher, with nearby contracts feeling supported by the strong test developing throughout the video auctions and sale barns. August feeder closed $1.35 higher at $140.70, September feeders closed $1.67 stronger at $141.30 and October feeders closed $1.25 higher at $141.92. Thankfully Tuesday was able to recover some of what Monday lost, but the market will have to decide if the pressure at $144 is strong enough to overpower how well calves and feeders are trading throughout the countryside.
Watching Superior's Video Royale sale hasn't disappointed, and if the week can continue with how strong the cattle are selling Tuesday afternoon, there will be a lot of producers heading home with their prayers answered. Sharing just a couple of lots that sold for example, there were some non-programmed steers weighing 850 pounds for delivery August 1 through August 10 that sold for $136. Some steers weighing 850 pounds that were both GAP 4 and NHTC certified for delivery late September/early October sold for a strong $167. Steers weighing 885 pounds that were both GAP 1 and NHTC certified for delivery towards the end of August sold for $140. And another group of steers weighing 860 pounds that were again NHTC and GAP 4 certified for delivery early September sold for $157. The CME feeder cattle index 7/27/2020: down $0.22, $139.77.
LEAN HOGS:
Still thrilled with Monday's ginormous jump in cash hog prices, the nearby lean hog contracts closed slightly lower, but the deferred contracts were still able to close $0.15 to $0.60 higher. August lean hogs closed $0.35 lower at $54.20, October lean hogs closed $0.02 lower at $50.72 and December lean hogs closed $0.25 higher at $51.80. Tuesday's movement of pork cutouts was encouraging because, if product can keep getting shipped out to the consumers and quickly picked up from the retail counters, the backlog will be worked through sooner than later. Pork cutouts totaled 395.43 loads with 357.65 loads of pork cuts and 37.78 loads of trim. Pork cutout values: down $1.89, $69.41. Tuesday's slaughter is estimated at 475,000 head, 2,000 head more than a week ago and 7,000 head more than a year ago. The CME lean hog index 7/24/2020: up $0.10, $50.23.
WEDNESDAY'S CASH HOG CALL: Slightly stronger. It's extremely encouraging that cash hog prices only closed $0.02 lower off Monday's close and once again a significant volume of 12,786 head. It wouldn't be surprising to see Wednesday come out and post strong prices again as it seems packers need hogs and they need them now.
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