GENERAL COMMENTS:
The lean hog contracts had no problem closing higher, but it was the cattle contracts that had to work a little more diligently to secure their higher closes. Heading into Wednesday, the cash cattle market should see packer interest arise and feedlots are gunning for higher prices. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.90 with a weighted average of $110.63 on 3,126 head. December corn is up 1 1/4 cents per bushel and December soybean meal is down $5.50. The Dow Jones Industrial Average is up 9.02 points and NASDAQ is up 27.83 points.
LIVE CATTLE:
The live cattle contracts flirted with the notion of trading higher, and though the market wasn't able to pull off the victory, the nearby contracts did close mildly higher. August live cattle closed $0.32 higher at $121.92, October live cattle closed $0.22 higher at $127.75 and December live cattle closed $0.15 lower at $131.77. The soon to be spot contract of August has a lot more room, technically, to trade higher than the December contract, which is already trading $9.85 higher than the August contract. The downward spiral of the boxed beef market continues and that will likely continue through July. The cash cattle market wasn't able to accomplish much of anything Tuesday afternoon. There was a handful of cattle that traded in Iowa from $198 to $200 but it wasn't on a large enough sampling to even mention. The CBP Texas Cash Pool sold 989 head at $121.25, with the only bother bid coming in at $118.00. Tuesday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and steady with year ago levels.
Boxed beef prices closed lower: choice down $5.09 ($292.34) and select down $3.56 ($270.40) with a movement of 157 loads (100.46 loads of choice, 30.73 loads of select, 10.41 loads of trim and 15.77 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. Packers left the cash cattle market high and dry last week, and feedlots know that, with their aggressive slaughter speeds, at some point they're going to have to look at the cash market again. Holidays always throw a curveball into the markets, but I truly believe that feedlots are going to hold out until they see more serious offers.
FEEDER CATTLE:
Feeder cattle sales are light ahead of the holiday weekend. Given that the Fourth of July lands on Sunday this year, next week's market will be lightly tested, and sale barns that host sales early in the week are likely to postpone until the following week. Nevertheless, the feeder cattle market is still trying to trade diligently amid any opportunity that arises on the board. The spot July corn contract closed a whopping $0.19 stronger, but the rest of the market closed mostly steady, as recent rains are appreciated in some regions but burdensome to the new crop in others. August feeder cattle closed $1.05 higher at $157.40, September feeders closed $0.72 higher at $159.80 and October feeders closed $0.52 higher at $161.57. The feeder cattle market would love to see some support arise from the live cattle complex, but thus far the cash cattle market hasn't been able to throw the market any bones. The CME Feeder Cattle Index for June 28: up $0.54, $146.72.
LEAN HOGS:
The lean hog contract kept its wind through closing despite seeing weaker cash hog prices, softer pork cutout values and a relatively small daily slaughter. July lean hogs closed $2.02 higher at $106.97, August lean hogs closed $0.85 higher at $103.62 and October lean hogs closed $0.35 higher at $87.75. What was more surprising to see than the market's lower cash hog trade (which isn't surprising), as that the day's total volume only amounted to 3,126 head. With the last two days having doggish processing speeds, one would be inclined to think that the entire week could run at sub-75,000 head per day levels with the Fourth of July holiday being this weekend and with packers not showing much support for the cash market. Pork cutouts totaled 288.91 loads with 258.59 loads of pork cuts and 30.32 loads of trim. Pork cutout values: down $0.91, $114.22. Tuesday's slaughter is estimated at 461,000 head, 14,000 head less than a week ago and 11,000 head less than a year ago. The CME Lean Hog Index for June 25: down $1.24, $114.19.
WEDNESDAY'S CASH HOG CALL: Lower. With packing speeds running slower this week, packers aren't likely to dive into the cash hog market ahead of the holiday.
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