GENERAL COMMENTS:
The optimism that circulated through livestock futures late last week and Monday disappeared Tuesday as all the contracts are lower as we move into Tuesday afternoon. As strange as it may be, going against all fundamentals, the market seems to have some underlying support. Determining whether the market's regression on Tuesday is a simply a chance to catch a break or is a pivotal turning point back to lower trading ranges is yet to be solidified. December corn is down 4 1/2 cents per bushel and December soybean meal is down $1.80. The Dow Jones Industrial Average is down 210.80 points and Nasdaq is up 23.44 points.
LIVE CATTLE:
Live cattle futures are taking a minute to slightly regress and consider the recent change in direction. August live cattle are down $0.27 at $99.82, October live cattle are up $0.02 at $103.95 and December live cattle are down $0.17 at $106.87. Seeing where Tuesday's boxed beef movement ends up will be interesting as the midday report only showed a small 55 load count. At midday, cash cattle trade is mostly quiet but one regional came into Nebraska and bought cattle for $157, $3.00 higher than last week's weighted average. Trade has been mostly quiet for the week without a trend.
Boxed beef prices are higher: choice up $0.58 ($206.04) and select up $0.89 ($197.86) with a movement of 55 loads (27.74 loads of choice, 13.58 loads of select, 5.75 lads of trim and 7.98 loads of ground beef).
FEEDER CATTLE:
Feeder cattle sales were sparse Monday afternoon as several sale barns took the day off. The feeder cattle complex contemplated for a long time whether contracts should follow the live cattle momentum; after enough time and pressure to do so, the feeder complex did follow suit. But just as the live cattle contracts started to weaken, the feeder cattle contracts were quick to rethink. Nearby contracts are taking the biggest step backwards while deferred contracts are only trading slightly lower. August feeder cattle are down $1.05 at $135.07, September feeders are down $0.80 at $136.42 and October feeders are down $0.47 at $137.37.
LEAN HOGS:
The hog complex isn't supporting Monday rallying except for in the August and October contracts, which is largely traders moving their positions before the July contract expires. July lean hogs are down $0.20 at $44.75, August lean hogs are steady at $49.27 and October lean hogs are up $0.12 at $49.17. The glut of hogs that still needs to be processed is burdensome on nearby contracts but looking past 2020 (let's hope this year's madness ends there) prices are far more optimistic, trading anywhere from $60.50 to $76.77 in 2021.
The projected lean hog index for 7/2/2020 is up $0.64 at $45.66 and the actual index for 7/1/2020 is down $0.26 at $45.02. Hog prices are higher on the National Direct Morning Hog Report, up $0.59 with a weighted average of $29.11, ranging from $24.00 to $30.19 on 5,310 head and a 5-day rolling average of $28.86. Pork cutouts total 210.23 loads with 189.88 loads of pork cuts and 20.35 loads of trim. Pork cutout values: up $1.14, $65.48.
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