General Comments
Midday live cattle contracts are trading mildly higher with the rest of the livestock complex trades lower. Cash trade has treated the lean hog market kindly as for a second day in row cash hogs are trading higher, but unfortunately the cash cattle market isn't celebrating the same news as prices continue to erode. September corn is up 8 1/4 cents per bushel and December soybean meal is up $8.50. The Dow Jones Industrial Average is up 62.09 points and NASDAQ is up 88.16 points.
LIVE CATTLE
Understanding the live cattle market when fundamentally understanding the challenges the industry is up against is truly baffling. Last week's data shared that carcass weights are 47 pounds over a year ago levels for steers, and 37 pounds over a year ago for heifers; we know that the back log of cattle still has to be processed through and concerns about beef demand through the third quarter are heightened - all of which should be bearish sediments but yet the board scales modestly higher. August live cattle are up $0.47 at $96.75, October live cattle are up $0.37 at $100.10 and December live cattle are up $0.12 at $103.77. Cash cattle trade has developed modestly throughout the countryside with Southern cattle selling for $95 live ($1.00 lower than last week) and northern cattle selling dressed for $153 to $155, which is mostly steady for the week. Asking prices remain firm at $98-plus in the South and $158 in the North for dressed cattle.
The Fed Cattle Exchange Auction listed a total of 1,814 head, with 144 actually sold, 1,352 head listed as unsold, and 318 head listed as PO (Passed Offer). The state by state breakdown looks like this: Kansas 1,155 total head, with 144 head sold at $95.00, 693 head unsold, 318 head listed as PO ($93.00); Nebraska 194 total head, with no cattle sold; Texas 465 total head, with no cattle sold. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 768 head total, 144 head sold, with a weighted average price of $95.00; 1-17 day delivery 1,046 head total, with no sales.
Boxed beef prices are lower: choice down $1.38 ($205.59) and select down $0.44 ($199.46) with a movement of 115 loads (73.94 loads of choice cuts, 15.30 loads of select, 5.82 loads of trim and 19.65 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts are truly unimpressed with every notion that Wednesday has offered and insist on trading lower after seeing corn prices trading higher. Feeder cattle contracts are playing the field on a safer note when compared to the live cattle contracts as the industry isn't past the back log of cattle and cash cattle prices are going to only continue to erode through the summer. August feeders are down $1.37 at $131.47, September feeders are down $1.02 at $132.35 and October feeders are down $0.97 at $133.12.
LEAN HOGS
The lean hog complex has trades disappointingly Wednesday morning as the board tips lower while cash prices hit the midday report strong and cutout values post midday gains of over $1.00 stronger. July lean hogs are down $0.20 at $44.97, August lean hogs are up $0.40 at $49.42 and October lean hogs are down $1.05 at 48.35. Interest in pretty slim and given that the Thursday is the last trading day for this holiday shortened week, the complex may simply not have enough trade support and interest to rally.
The projected lean hog index for 6/30/2020 is up $0.03 at $45.27, and the actual index for 6/29/2020 is up $0.01 at $45.24. Hog prices are higher on the National Direct Morning Hog Report, up $0.23 with a weighted average of $28.69, ranging from $24.00 to $30.13 on 5,095 head and a five-day rolling average of $28.64. Pork cutouts total 230.63 loads with 204.33 loads of pork cuts and 26.30 loads of trim. Pork cutout values: up $1.18, $64.30.
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