GENERAL COMMENTS:
It's been a busy afternoon as the USDA released its Cattle Prices Investigation ahead of this week's Cattle on Feed and Bi-Annual Inventory Report. The market closed with a little more optimism than what circulating during the morning, but the live cattle complex was able to shake the bearish undertone that's rooted in nearby contracts. Hog prices are higher on the National Direct Afternoon Hog Report, up $0.66 with a weighted average of $34.25 on 8,548 head. December corn is up 4 cents per bushel and December soybean meal is up $0.90. The Dow Jones Industrial Average is up 165.44 points and NASDAQ is up 25.77 points.
LIVE CATTLE:
Live cattle prices showed nearby pressure and deferred support through Wednesday's close. August live cattle closed $0.35 lower, at $101.50, October live cattle closed $0.40 lower, at $105.72, and December live cattle closed $0.17 lower at $110.12. Deferred contracts rallied and closed anywhere from $0.05 to $0.90 stronger. Feeders are really hoping to squeeze $98 or better out of packers, but packers are sticking their heels in the ground as they've been pretty quiet in inquiring about cattle this week -- and if they do they've just renewed their bids of $96, through Kansas and parts of Texas. Northern cattle have been able to pressure packers a touch more as cattle sold Wednesday afternoon for $97 and $98 live, and $158 dressed. Wednesday's slaughter is estimated at 117,000 head -- 2,000 head fewer than a week ago and 5,000 head fewer than a year ago.
Boxed beef prices closed mixed: choice was up $0.27 ($201.15) and select down $2.02 ($189.28) with a movement of 124 loads (57.96 loads of choice, 29.51 loads of select, 5.91 loads of trim and 30.54 loads of ground beef).
It was a busy day (and will be a busy week) as the USDA shared its Cattle Prices Investigation Report. As many have read through the report, which was released Wednesday afternoon, the USDA concluded that the market's disruption and volatility has stemmed from the Holcomb packing plant fire, and COVID-19. This is not the same investigation that's ongoing by the Department of Justice; this is the USDA's own personal report.
THURSDAY'S CASH CATTLE CALL: Steady. It wouldn't be all that surprising to see packers keep with their quiet tone throughout the week as they've been heavily buying for the last month.
FEEDER CATTLE:
Feeder cattle contracts were able to chop sideways, closing cautiously stronger through Wednesday afternoon. August feeders closed $0.20 higher, at $141.52, September feeders closed $0.30 higher, at $143.27, and October feeders closed $0.40 higher at $143.52. Thankfully, the board has been constantly reminded by the countryside feeder cattle market that cattlemen are optimistic. Northern Livestock Video Auction's Summertime Classic concludes Thursday afternoon and it's been another week where buyers are firing bids off and ring men keep taking them in. Likewise, at OKC West Livestock Auction in El Reno, Oklahoma compared to last week, feeder steers sold $1.00 to $3.00 stronger, while feeder heifers sold $4.00 to $5.00 higher. Demand was excellent and buyers were aggressive. Steer and heifer calves were lightly tested, but of the divisions that were comparable, trades were mostly $1.00 to $2.00 higher. The CME feeder cattle index 7/21/2020 is down $0.06, at $136.42.
LEAN HOGS:
Lean hog contracts caught a second wind Wednesday afternoon to close the day higher. August lean hogs closed $1.17 higher, at $52.65, October lean hogs closed $0.05 higher, at $50.07, and December lean hogs closed slightly lower down $0.10 at $51.45. Thankfully, Wednesday's weaker cutout report didn't affect the market's willingness to close modestly stronger as Tuesday afternoon the cutout market closed nearly $4.00 higher, but come Wednesday afternoon the market gave all but $0.56 of that rally back. Wednesday's slaughter is estimated at 478,000 head -- 8,000 head more than a week ago and 3,000 head more than a year ago. Tuesday's hog slaughter was revised to 473,000 head. The CME lean hog index 7/20/2020: up $0.74, $48.64.
THURSDAY'S CASH HOG CALL: Steady. As the market bounces higher and lower through the cutout value, packers are going to play the middle ground of making sure they have enough hogs to keep processing fully loaded, but aren't going to get overly ambitious as hogs are still numerous and carrying considerable weight.
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