GENERAL COMMENTS:
Wednesday was a rallying day for cattle contracts and treated feeder cattle prices extremely well. The lean hog complex struggled a little because traders seemed uninterested. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.38 with a weighted average of $31.40 on 8,743 head. December corn is up 1/4 cent per bushel and December soybean meal is up $1.10. The Dow Jones Industrial Average is up 227.51 points and NASDAQ is up 61.91 points.
LIVE CATTLE:
The live cattle complex jumped at the opportunity to trade higher and gave bullish traders a day to run wild and free. August live cattle closed $2.50 higher at $101.30, October live cattle closed $1.45 higher at $104.55 and December live cattle closed $1.02 higher at $108.17. The market is caught fighting two different beasts with two different perspectives. The bullish crowd looked at Wednesday and swooned with optimism as some believe that the backlog of cattle is getting closer to being processed through in the North, and know full heartedly that packers will ship cattle north to better distribute current supplies and clean up whatever is needed in the South. Meanwhile, the bearish minded folks look at Wednesday and still remember the scorning burn from this spring when prices went tumbling lower. The bearish minded crowd looks at boxed beef prices that are hanging on by a thread to stay above $200 in the choice cuts but believe that the market could give way easily another $5.00 to $10.00 as the summer heat keeps families inside and away from grilling; not to mention there's still a lot of water to go under the bridge before Labor Day. There was some trade throughout the countryside, trading live for mostly $96 to $97 in the North and $157 dressed; some southern cattle sold for $94 to $95.
Boxed beef prices closed mixed: choice down $0.16 ($200.76) and select up $0.52 ($191.37) with a movement of 151 loads (89.16 loads of choice, 34.65 loads of select, 9.55 loads of trim and 17.20 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Given that there's been a good sampling of this week's trade, trade will most likely keep with the week's trend.
FEEDER CATTLE:
Feeder cattle prices jumped over $2.00 higher in nearby contracts and closed the market fully higher through the deferred months. The August feeder cattle closed $2.70 stronger pushing the contract to $139.42 -- a level not seen since early March. September feeders closed $2.07 higher at $139.55, October feeders closed $1.80 higher at $140.50 and November feeders closed $1.85 higher at $141.40. Fundamentally, it's nearly impossible to understand the immense amount of bullishness in the feeder cattle market, but nevertheless, it's there. At Huss Livestock Market in Kearney, Nebraska, compared to two weeks ago, yearling steers coming off grass sold $2.00 to $5.00 higher. Demand was excellent and the buyers weren't shy as many of them came for multiple loads of cattle. The CME feeder cattle index 7/15/2020: up $0.29, $135.91.
LEAN HOGS:
As cattle contracts drew all the attention through Wednesday's trading hours, the lean hog complex was left high and dry. Even with a higher cash trade and a commendable jump in pork cutout values, the market closed higher in the August contract, but was unable to rally anything further than the spot month. August lean hogs closed $0.22 higher at $50.15, October lean hogs closed $0.25 lower at $49.42 and December lean hogs closed $0.22 lower at $51.00. Pork cutouts totaled 322.33 loads with 287.38 loads of pork cuts and 34.95 loads of trim. Pork cutout values: up $2.71, $68.95. The CME lean hog index 7/13/2020: up $0.43, $46.05.
THURSDAY'S CASH HOG CALL: Steady. Pork producers are thankful that their product has been moving and that packers keep stepping up for more hogs. Hopefully, through the rest of the week, prices can stay steady or trend slightly higher.
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