GENERAL COMMENTS:
Tuesday's close leaves Wednesday with a lot of unknowns to sort out. A stronger tone is set for cash cattle trade, but how much stronger will the week's averages line out to be? Is the feeder cattle complex rethinking its aggression or did the day's trade simply allow for a rest before continuing with upward strength? Hog prices are unavailable on the National Direct Afternoon Hog Report due to packer submission problems. October lean hogs are up $0.63 at $49.025, December corn is down 8 1/4 cents per bushel and December soybean meal is down $4.30. The Dow Jones Industrial Average is up 164.07 points and NASDAQ is up 38.36 points.
LIVE CATTLE:
Live cattle contracts kept giving away their position as Tuesday afternoon advanced, closing anywhere from $0.10 to $0.80 lower. August live cattle closed $0.75 lower at $102.27, October live cattle closed $0.80 lower at $107.47 and December live cattle closed $0.45 lower at $111.37. Meanwhile cash cattle trade had a shot of optimism, but in a very narrow window. Early Tuesday morning Kansas was able to trade some live cattle for $100 ($3.00 more than last week's average) and in the afternoon some live cattle traded in the southern part of Kansas for $100 as well. A jump of $3.00 stronger early in the week leaves feeders optimistic, and their asking prices plead for more money than last week, but packers weren't overly ambitious to step out on a limb and buy the whole week's movement for that much of a jump. Tuesday's slaughter is estimated at 119,000 head, steady with a week ago and 2,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $0.42 ($204.24) and select up $0.05 ($190.45) with a movement of 160 loads (83.28 loads of choice, 25.51 loads of select, 12.07 loads of trim and 39.22 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. After Wednesday's online auction, packers will mostly get serious and place some bids on the table. With a higher tone already set for the week, another $1.00 or $2.00 over last week's averages should be attainable.
FEEDER CATTLE:
Feeder cattle contracts teetered slightly lower throughout the day, leaving market enthusiasts on pins and needles. Bull spreaders look at Tuesday's close and, though prices were slightly lower, they still see levels above the $143.85 resistance plane as a strong sign. Meanwhile, those taking the bearish position look at Tuesday's close and see an overdone movement that's starting to rethink its advancements. August feeders closed $0.17 lower at $144.70, September feeders closed $0.45 lower at $146.62 and October feeders closed $0.15 lower at 147.07. Monday's recap of the feeder cattle sale at Joplin Regional Stockyards shared that, compared to a week ago, steer calves sold fully steady, yearlings were steady and heifers under 700 pounds sold steady to $3.00 higher, while heifers over 700 pounds sold steady. Considering that it was a big sale (over 7,000 head), demand was considered strong and the market held its way from top to bottom. The recent rain showers benefited grain crops and pastures, allowing producers to take advantage of some cooler weather, making it easier to haul cattle to the sale. The CME feeder cattle index 8/3/2020: up $0.70, $140.50.
LEAN HOGS:
"Trapped" seems the best way to accurately describe the lean hog complex as contracts continue to trade sideways and the cash market keeps trading with a tight rein. August lean hogs closed $0.17 lower at $49.70, October lean hogs closed $0.62 higher at $49.02 and December lean hogs closed $0.50 higher at $ 50.57. Pork cutouts totaled 465.94 loads with 421.38 loads of pork cuts and 44.56 loads of trim. Pork cutout values: down $1.28, $65.50. Tuesday's slaughter is estimated at 474,000 head, 1,000 head less than a week ago and steady with a year ago. Monday's hog slaughter was revised to 420,000 head. The CME lean hog index 7/31/2020: down $0.41, $53.11.
WEDNESDAY'S CASH HOG CALL: Steady. Seeing that packers have been so far modest in their acquisition of hogs this week leads one to believe that last week's aggressive buying positioned them to be mostly bought up in the near term.
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