GENERAL COMMENTS:
Heading into Monday's trade, the biggest questions were looming around feeder cattle contracts and if prices were going to be able to support Friday's jump above resistance levels. Though the complex didn't trade steadily higher throughout the day, the feeder cattle contracts were able to keep above Friday's close. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.66 with a weighted average of $40.28 on 6,053 head. December corn is up 1 1/2 cents per bushel and December soybean meal is down $1.60. The Dow Jones Industrial Average is up 236.08 points and NASDAQ is up 157.52 points.
LIVE CATTLE:
Steady gains have treated the live cattle complex extremely well as that market keeps stepping higher. Getting prices well above the $100 threshold couldn't happen soon enough as producers still suffer from prices far below breakeven levels, but progress is progress nonetheless. August live cattle closed $0.20 higher at $103.02, October live cattle closed $0.40 higher at $108.27 and December live cattle closed $0.27 stronger at $111.82. Both packers and feeders were quiet throughout Monday's trade as asking prices are unknown and packer inquiries have been minimal. Given that the board is continuing with its upward trend, a stronger mindset from feeders is well anticipated. Monday's slaughter is estimated at 113,000 head, down 4,000 head from a week ago and down 7,000 head from a year ago.
Boxed beef prices closed higher: choice up $1.40 ($204.60) and select up $0.51 ($190.40) with a movement of 104 loads (50.39 loads of choice, 21.58 loads of select, 14.37 loads of trim and 17.45 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. The market has been able to move a vast amount of cattle over the last two months and in the past couple of weeks tacking on an extra $1.00 or $2.00 hasn't been an issue. Heading into this week, feeders are anticipated to set their prices higher once again.
FEEDER CATTLE:
It was an encouraging day for the feeder cattle market, as the complex was able to trade solidly above the $143.85 resistance plane that the market closed above Friday afternoon. August feeders closed $0.20 higher at $144.87, September feeders closed $0.85 higher at $147.07 and October feeders closed $0.57 higher at $147.22. In order for the market to fully breakout of the choppy, sideways range, the week will need to see steady to higher trade and support in the higher prices. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers traded on the preliminary report for $1.00 to $3.00 higher and feeder heifers were selling for $2.00 to $3.00 higher. Steer and heifer calves sold steady but were on a lighter test. The CME feeder cattle index 7/31/2020: not available at this time.
LEAN HOGS:
Monday's trade was mostly uneventful as the day's work happened inside Friday's parameters. Nearby contracts closed sharply lower, while deferred contracts were able to rally modestly. August lean hogs closed $2.12 lower at $49.87, October lean hogs closed $1.22 lower at $48.40 and December lean hogs closed $0.30 lower at $50.07. Even though 2020's slaughter has been highly volatile due to COVID-19 and labor issues, to date 2020 is 0.8% ahead of where slaughter was currently in 2019. Considering August is the last full month of summer, packers will start to look at protein demand down the road and hope that demand will be plentiful with Labor Day and that restaurant demand will stabilize sooner rather than later. Monday's slaughter is estimated at 425,000 head, 30,000 head less than a week ago and steady with a year ago. Pork cutouts totaled 393.09 loads with 349.29 loads of pork cuts and 43.81 loads of trim. Pork cutout values: up $1.47, $66.78. Saturday's hog slaughter was revised to 177,000 head. The CME lean hog index 7/30/2020: down $0.04, $53.52.
TUESDAY'S CASH HOG CALL: Steady. Seeing that cutout values are slightly stronger Monday afternoon, we may see some extra buying later in the week if demand remains. But with strong purchases last week, packers could very well have all the hogs they need in the short term.
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