GENERAL COMMENTS:
Contracts have decided that, for the meantime, a lackluster, doggish downward trade is where the chips need to fall. Last week's rally may rival resistance later down the road, but, for now, contracts can't muster up support. Cash hog prices closed $0.23 lower on the National Direct Afternoon Hog Report, with a weighted average of $29.14 on 9,504 head. December corn is up 1 3/4 cents per bushel and December soybean meal is down $1.30. The Dow Jones Industrial Average is up 177.10 points and NASDAQ is up 148.61 points.
LIVE CATTLE:
Live cattle contracts closed lower Wednesday afternoon, though cash cattle prices are inching slightly higher than last week's averages. The market hit resistance and has sank back lower, and thus far traders seem uninterested in rallying those levels again. August live cattle closed $0.85 lower at $99.15, October live cattle closed $0.67 lower at $103.50 and December live cattle closed $0.35 lower at $106.67. Wednesday had a light to moderate cash cattle trade with Southern deals trickling in throughout the day and Northern cattle selling in the afternoon. The South sold cattle live for $90 to $95.25, though mostly at $95, which is $1.00 higher than last week. Northern cattle sold for $155 to $160, which is $1.00 to $6.00 better than last week. Wednesday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 2,000 head more than year ago.
Boxed beef prices closed lower: choice down $1.47 ($203.83) and select down $1.32 ($195.52) with a movement of 178 loads (94.34 loads of choice, 37.17 loads of select, 21.93 loads of trim and 24.15 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Seeing that cattle have not traded in the North or the South, price ranges for the week are most likely set unless a packer needs immediate delivery, at which point they may pay a little extra.
FEEDER CATTLE:
Feeder cattle contracts closed lower Wednesday afternoon, not interested in pursuing a rally whatsoever in the day's timeframe. Seeing live cattle contracts trade lower after pursuing a rally has turned feeders off from trading higher, and collectively the market closed $0.42 to $1.05 lower. August feeders closed $0.87 lower at $134.05, September feeders closed $0.65 at $135.67 and October feeders closed $0.47 lower at $136.77. At Hub City Livestock Auction, in Aberdeen, South Dakota, compared to two weeks ago, the market had its best test on steers weighing 850 to 950 pounds, which sold $2.00 to $3.00 higher. The best test on heifers were the females weighing 750 to 850 pounds, which sold $1.00 to $2.00 stronger. Cattle came in with mixed flesh, but there were some that came off grass in lighter condition. Weather conditions continue to be an issue for the region, as temperatures have been extremely hot and humid. The CME feeder cattle index 7/7/2020: not available at this time.
LEAN HOGS:
The lean hog complex closed mostly lower, though the October and December 2020 contracts closed slightly higher. July lean hogs closed $0.47 lower at $44.05, August lean hogs closed $0.92 lower at $47.95 and October lean hogs closed $0.17 higher at $48.80. Pork cutout values jumped higher and it's interesting that once again -- even though packers got hogs for a little lower price -- they still bought upwards of 9,504 head; continuing to show strong interest and drive to get the backlog worked through. Pork cutouts totaled 384.58 loads with 349.91 loads of pork cuts and 34.67 loads of trim. Pork cutout values: up $4.56, $67.16. Wednesday's slaughter is estimated at 467,000 head, 2,000 head less than week ago and 15,000 head less than a year ago. The CME lean hog index 7/6/2020: up $0.24, $45.90.
THURSDAY'S CASH HOG CALL: Steady. Until the backlog of hogs is worked through, a steady trend is the most likely movement. When packers need hogs for immediate delivery, they may pay a little extra, but through precise planning and scheduling at the plants, they won't be pressured to pay much more, as numbers are exuberant.
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