Friday Closing Livestock Market Update - Markets Feeling the Dog Days of Summer

GENERAL COMMENTS:

It was a mixed week for the livestock complex as boxed beef demand should have spurred higher cash cattle trade, but the market didn't make the full connection. Feeder cattle prices continued to see robust interest from buyers in the countryside, but, technically, the market neglected to find the support it needed. In the lean hog market, a sideways trending pork cutout value didn't add much gusto the futures market trade. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.88 with a weighted average of $101.70 on 3,010 head. December corn is down 11 1/4 cents per bushel and December soybean meal is down $5.50. The Dow Jones Industrial Average is down 149.19 points and NASDAQ is down 105.58 points.

From Friday to Friday, livestock futures scored the following changes: August live cattle up $0.58, October live cattle up $0.05; August feeder cattle down $1.90, September feeder cattle down $0.72; August lean hogs down $1.15, October lean hogs down $4.60.

LIVE CATTLE:

Every Monday and Thursday, all the analysts at DTN get together on a call to discuss the market's developments. On one particular call, I remember DTN Lead analyst Todd Hultman saying, "Don't ever get too confident in the fundamental windshield, because it changes before your eyes." And as we look at the upcoming months of 2021 and how the cattle market should perform, I don't think anything could be more true -- especially in the case of the cash cattle market.

This past week, boxed beef prices traded positively as pre-Labor Day buying has retailers prepping their coolers and we will likely see stronger prices for at least the next week or two. So, as we analyze the "fundamental windshield," one would naturally think that heightened demand and thinner supplies would yield a stronger cash cattle market as packers need the cattle -- but guess again my friends.

This past week's cash cattle market was a pitiful and lousy example of what the cash cattle market should be amid stronger consumer demand and rallying box prices. Friday's afternoon reports shared that, throughout the entire nation, only 53,512 head of cattle were traded in the cash cattle market. Southern cattle this past week traded at mostly $120, which was $1.00 stronger than last week, and Northern dressed cattle traded at mostly $196, which is roughly steady.

August live cattle closed $0.42 lower at $122.07, October live cattle closed $0.95 lower at $127.20 and December live cattle closed $0.62 lower at $132.65. Friday's slaughter is estimated at 114,000 head, 4,000 head more than a week ago and 3,000 head more than a year ago. Saturday's kill is projected to be around 58,000 head. This week's total slaughter is estimated at 649,000 head, which is 1,000 head more than a week ago and 13,000 head more than a year ago.

Boxed beef prices closed higher: choice up $3.24 ($278.46) and select up $2.37 ($259.19) with a movement of 117 loads (60.79 loads of choice, 25.04 loads of select, 22.36 loads of trim and 8.60 loads of ground beef). Throughout the week choice cuts averaged $272.90 (up $7.02 from last week) and select cuts averaged $255.40 (up $6.09 from last week) with a total movement of cuts, grinds and trim of 628 loads.

MONDAY'S CASH CATTLE CALL: Steady. With packers having cattle committed for the weeks ahead, there's little hope that the cash cattle market will be able to demand higher prices unless packers simply offer up charity bids.

FEEDER CATTLE:

The feeder cattle complex didn't gain any support by the day's close, but the market does like to see that the corn market waned lower with fears of rain in the forecast. Feedlots would gladly take lower corn prices and they may even breakout some colorful dance moves for a good rain, as deteriorating pasture conditions continue to plague cattlemen in the West. August feeders closed $0.32 lower at $158.17, September feeders closed $0.15 lower at $161.80 and October feeders closed $0.15 lower at $164.05. Even though the futures market didn't accomplish much throughout the week, the strength in feeder cattle prices remained strong this past week. Buyers are constantly analyzing their breakevens but continue to see the optimism built into the next year's fat cattle market, and so long as the April 2022 live cattle contract continues to trade close to $140, buyers will likely stay aggressive. Looking to next week's trade, the market will be glued to watching how Superior's Video Royale sale does in Winnemucca, Nevada, as there are roughly 184,000 head of cattle consigned to the sale. Oklahoma's Weekly Cattle Auction Summary shared that throughout the entire state, and compared to last week, feeder steers sold steady to $3.00 higher and feeder heifers sold $2.00 to $5.00 higher. Steer calves sold $4.00 to $6.00 stronger, and heifer calve traded steady to $5.00 higher. Slaughter cows sold $1.00 to $5.00 higher this last week with instances up to even $11.00 stronger, slaughter bulls sold $1.00 to $4.00 higher. The CME Feeder Cattle Index for July 29: up $0.04, $154.04.

LEAN HOGS:

Even though the futures market petered out as the week grew long, it was far from a boring week in the hog world. Heading into next week's trade, continuing to watch how slaughter speeds fare will be on the forefront of everyone's mind as supplies are becoming easier for packers to secure. Secondly, the market has a balancing act to manage with pork cutout prices. High pork prices seem stimulating, but when it comes to exports, they can be costly. Monitoring the market to make sure no more news breaks about African swine fever will continue to be an issue that needs closely monitored. August lean hogs closed $0.10 lower at $106.20, October lean hogs closed $0.95 lower at $88.02 and December lean hogs closed $0.75 lower at $81.65. Pork cutouts totaled 266.96 loads with 246.11 loads of pork cuts and 20.86 loads of trim. Pork cutout values: up $0.02, $123.89. Friday's slaughter is estimated at 439,000 head, 5,000 head more than a week ago and 35,000 head more than a year ago. This week's total slaughter is estimated at 2,327,000 head, 5,000 head less than a week ago and 210,000 head less than a year ago. The CME Lean Hog Index for July 28: up $0.08, $112.02.

­­­­­MONDAY'S CASH HOG CALL: Lower. With pork cutout values closing a slim $0.02 higher, packers are going to be cautious about diving into the cash hog market as they'll want to see how next week's demand appears and they know that finding hogs is getting easier to do as more hogs are becoming available.

Friday Midday Livestock Market Summary - Crickets for the Complex

GENERAL COMMENTS:

The livestock complex is trading about as excitingly as it would on a day before a long three-day weekend. Traders are mostly absent from the market and packers haven't even bothered to renew one single bid in the cash cattle market. At this point, it's looking like Friday's trade won't amount to much other than a weaker close throughout the futures complex. December corn is down 8 1/4 cents per bushel and December soybean meal is down $4.00. The Dow Jones Industrial Average is down 129.30 points and NASDAQ is down 92.36 points.

LIVE CATTLE

The live cattle complex isn't having a grand-slam day by any measure, as packers continue to see the benefit in higher boxes, but consumers are still enduring high beef prices. August live cattle are down $0.32 at $122.17, October live cattle are down $0.80 at $127.35 and December live cattle are down $0.55 at $132.75. The countryside hasn't seen a bit of interest develop following the trade that transpired Thursday afternoon. The market still has plenty of cattle to trade but it seems as though packers have secured their immediate needs and are already checked out of the market and enjoying a long weekend. So far, this past week live cattle have traded anywhere from $116 to $123.50, but mostly at $120, which is $1.00 stronger than last week. Northern dressed cattle have traded from $195 to $201, mostly at $196, which is steady with last week's trade. There could be some trade that develops Friday afternoon but it's most likely that this week's cash cattle trade is done with.

Boxed beef prices are higher: choice up $3.60 ($278.82) and select up $1.59 ($258.41) with a movement of 64 loads (28.68 loads of choice, 16.57 loads of select, 12.95 loads of trim and 5.59 loads of ground beef).

FEEDER CATTLE

One would naturally be inclined to thinking that because corn is trading $0.06 to $0.07 lower in its nearby contracts, the feeder cattle market would be having a heyday. But without an active presence from traders, the market has been left high and dry to drift lower into the weekend. August feeders are down $0.35 at $158.15, September feeders are down $0.35 at $161.60 and October feeders are down $0.25 at $163.95.

LEAN HOGS

Just like the cattle contracts, the lean hog market has been left to trail lower into the weekend. August lean hogs are down $0.30 at $106.00, October lean hogs are down $1.52 at $87.45 and December lean hogs are down $1.32 at $81.07. With Thursday's afternoon pork cutout values closing more than $1.00 lower, it will be interesting to see how Friday's cutout closes as demand is still alive and well in the market, but supplies are being more readily available. Even though it seems like an oxymoron, lower pork cutout prices could mean a weaker futures market, but they could also mean stronger exports as U.S. pork prices are still high compared to other nations.

The projected CME Lean Hog Index for July 29 is up $0.06 at $112.08 and the actual index for July 28 is up $0.08 at $112.02. Because hog prices weren't available Thursday, due to confidentiality, there is no comparison to be made Friday morning in regard to day-over-day price trends. We do, however, know that there have been 2,360 head sell with a weighted average of $101.65, ranging from $100.00 to $105.00, and a five-day rolling average of $103.51. Pork cutouts total 144.34 loads with 132.58 loads of pork cuts and 11.77 loads of trim. Pork cutout values: up $1.10, $124.97.

Friday Morning Livestock Market Update - Lackluster Trade Expected

GENERAL COMMENTS:

Traders were a bit disappointed over cash cattle trade on Thursday, which put a little pressure on live cattle futures. Even though purchases of cattle have been rather limited, Southern cattle traded $1.00 higher while Northern cattle traded steady with last week. Further strength is not expected Friday. Increasing boxed beef prices are improving packer margins with choice cuts up $2.06 and select cuts up $0.70. However, as long as packers can purchase the cattle they need ahead of time without having to pay up for them, the more confident they become in holding the line on spending. Feedlots initially had high hopes for $2.00 to $3.00 higher cash, but that has dwindled as the week moves to the final day of trading and the pattern has been set. Weekly export sales were neutral, providing little in the way of market direction.

Hogs rebounded Thursday but could not hold the gains that unfolded earlier in the day. The October contract took it on the chin, the only contract to close lower. Traders digested the discovery of African swine fever in the Dominican Republic and realized it is not a bearish issue at the present time. However, it does provide concern and will continue to be monitored. The focus is back on ongoing hog supplies and how much tighter they may become. Friday's slaughter is estimated around 440,000 head. Cash continues to falter with the National Direct Afternoon report down $1.22 and cutouts declining $1.10. Weekly export sales were good at 38,500 metric tons (mt), but China was not listed as a buyer for the third consecutive week. Saturday slaughter is projected to be 12,000 head.

	BULL SIDE		BEAR SIDE
1)	It appears cash cattle trade will be no worse than steady with some trade actually $1.00 higher. Not as much as feedlots would like, but better than the alternative.	1)	Disappointing cash cattle trade is putting a little pressure on futures as traders become uncertain over upside price potential.
2)	Boxed beef continues to increase, which should increase chain speed to satisfy demand, requiring packers to be more aggressive with purchasing cattle.	2)	Technically, cattle futures may have stalled out after the large price increase earlier this week.
3)	Hogs were able to shake off the initial bearish reaction to the discovery of African swine fever in the Dominican Republic, possibly resuming the uptrend.	3)	Hog futures were generally higher Thursday, but it may be difficult to regain what was lost in the near term.
4)	Weekly export sales were strong even though China was not a buyer. Other countries are increasing purchases, making up the difference.	4)	Lower cash and lower cutouts may not provide traders with the confidence they need in order to increase their long positions, leaving them less aggressive.

Thursday Closing Livestock Market Update - Hogs Perk Back Up

GENERAL COMMENTS:

It was a mixed day throughout the livestock complex as cattle closed lower upon higher corn prices and another week of disappointing cash cattle trade. Meanwhile, the lean hog market doesn't like the fact that African swine fever is creeping closer to our homeland, but the market was able to regain what Wednesday threw away in a panic-struck mindset. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.22 with a weighted average of $102.58 on 3,660 head. December corn is up 7 1/2 cents per bushel and December soybean meal is up $1.30. The Dow Jones Industrial Average is up 153.60 points and NASDAQ is up 15.68 points.

LIVE CATTLE:

The cash cattle market is coming up empty handed as feedlots were hoping to confidently add at least $1.00 to this week's market, if not $2.00 amid the stronger boxed beef prices. But with packers having cattle committed for the weeks ahead, their dependence on the cash cattle market is minimal and they don't want to sacrifice any margin. Thus far, there's been cattle trade in the South for $120, which is $1.00 higher than last week, but in the North deals have been pinned at mostly $196, which is roughly steady with last week's trade. Based on Thursday's afternoon close, there's only been 44,286 head of cattle trade thus far this week in the cash cattle market. When packers buy cattle with time and only buy 60,000 to 75,000 head per week, it makes it really hard for feedlots to ever gain an upper hand on the market. August live cattle closed $0.57 lower at $122.50, October live cattle closed $0.37 lower at $128.15 and December live cattle closed $0.22 lower at $133.27. Thursday's slaughter is estimated at 119,000 head, 1,000 head more than a week ago and steady with a year ago.

Thursday's actual slaughter data shared that, for the week ending July 17, there were 650,315 head of cattle processed. Of that, steer carcass weights jumped 3 pounds from the previous week to average 888 pounds and heifers gained 1 pound to average 813 pounds.

Beef net sales of 22,500 mt reported for 2021 were down 11% from the previous week but up 28% from the prior four-week average. The three largest buyers were South Korea (8,200 mt), Japan (6,100 mt) and China (4,500 mt).

Boxed beef prices closed higher: choice up $2.06 ($275.22) and select up $0.70 ($256.82) with a movement of 112 loads (41.70 loads of choice, 32.17 loads of select, 18.77 loads of trim and 18.96 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady with the week's trend. Unfortunately, it doesn't look like the cash cattle market is going to come out with the upper hand this week. Some more trade should take place on Friday, but it will be for steady prices with the week's trend.

FEEDER CATTLE:

A weaker board was seen through Thursday's trade and the feeder cattle market watched the corn market rally and close $0.07 to $0.08 higher by the day's end. Demand throughout the country's sales is still strong, but technically speaking, the market will need to no sign of hesitancy whatsoever in order to trade above $162 in the August contract and in order to trade above $164 in the September contract. August feeders closed $1.67 lower at $158.50, September feeders closed $1.50 lower at $161.95 and October feeders closed $1.37 lower at $164.20. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, a lower undertone was noted on steers up to 950 pounds. Steers weighing 950 to 999 pounds sold $1.00 lower and steers weighing 1,000 to 1,500 pounds sold $1.00 higher. An unevenly steady undertone was seen on heifers up to 850 pounds, but heifers weighing 850 to 900 pounds sold $1.00 stronger. The CME Feeder Cattle Index for July 28: down $0.36, $154.00.

LEAN HOGS:

After closing fully lower Wednesday afternoon, the lean hog market regained some of its lost position as the market confirmed that the rumors of African swine fever were detected in the Dominican Republic. Unfortunately, the news makes everyone hold their breath and pray that it doesn't eventually work its way in our hog population, but like with all things, putting the cart before the horse never does the market any justice. The hog market needs to continue to closely monitor pork cutout prices (which closed lower Thursday afternoon) and the seasonal ebbs and flows of supply as the market turns to the second half of 2021. Thin supplies of market-ready hogs has treated the hog market extremely well over the last seven months, but as supplies become more abundant in the months ahead, the market desperately hopes that both an international and domestic customer base continues to pick up pork at the grocery store to keep prices supported. August lean hogs closed $0.60 higher at $106.30, October lean hogs closed $0.55 lower at $88.97 and December lean hogs closed $0.25 higher at $82.40. Pork cutouts totaled 275.37 loads with 250.60 loads of pork cuts and 24.77 loads of trim. Pork cutout values: down $1.10, $123.87. Thursday's slaughter is estimated at 474,000 head, 5,000 head more than a week ago and 8,000 head less than a year ago. Wednesday's hog slaughter was revised to 465,000 head, which is 6,000 head less than what was originally stated. The CME Lean Hog Index for July 27: down $0.11, $111.94.

Pork net sales of 38,500 mt reported for 2021 were up 57% from the previous week and 43% from the prior four-week average. The three largest buyers were Mexico (25,100 mt), Chile (3,300 mt) and Japan (3,200 mt).

Thursday's actual slaughter data shared that, for the week ending July 17, there were 2,288,350 hogs slaughtered. Both live and dressed carcass weights remained steady with the previous week as live weights averaged 281 pounds and dressed weights averaged 210 pounds.

­­­­­FRIDAY'S CASH HOG CALL: Lower. Packers haven't been showing much interest in the cash market toward the later part of the week, as they're able to secure their supplies earlier.

Thursday Midday Livestock Market Update - Hogs Find Renewed Confidence

GENERAL COMMENTS:

All eyes and ears have intensely watched the lean hog market as confirmation of African swine fever in the Dominican Republic has been reported. Meanwhile both the live cattle and feeder cattle contracts are trading lower as the market has undermining pieces about it still. December corn is up 6 1/2 cents per bushel and December soybean meal is up $0.60. The Dow Jones Industrial Average is up 215.06 points and NASDAQ is up 57.49 points.

LIVE CATTLE:

Live cattle futures are trailing slightly lower as the market saw a lackadaisical export report and cash cattle trade is still only slowly starting to develop. August live cattle are down $0.27 at $122.82, October live cattle are down $0.30 at $128.20 and December live cattle are down $0.20 at $133.30. You could argue the market's higher boxed beef prices should be a rallying torch; and it most certainly adds positive steam to the market's current. But without seeing substantially higher cash cattle trade, the market is still left with some unsupported sides. Thus far the market has seen cattle trade in Kansas and Texas for $120, which is $1.00 higher than last week, and bids of $122 and $195 to $196 are currently being offered in Iowa and Nebraska. More trade should develop before the week's end.

Beef net sales of 22,500 metric tons (mt) reported for 2021 were down 11% from the previous week but up 28% from the prior four-week average. The three largest buyers were South Korea (8,200 mt), Japan (6,100 mt) and China (4,500 mt).

Boxed beef prices are higher: choice up $2.06 ($275.22) and select up $0.57 ($256.69) with a movement of 73 loads (26.78 loads of choice, 23.17 loads of select, 7.63 loads of trim and 15.51 loads of ground beef).

FEEDER CATTLE:

Nearby feeder cattle futures are battling lower prices as the corn market posts a modest midday rally. August feeders are down $1.07 at $159.10, September feeders are down $1.02 at $162.42 and October feeders are down $1.00 at $164.65. The feeder cattle contracts do see that the cash cattle market is trading about $1.00 higher in the South and that boxed beef prices are continuing to trade higher; but with the day's rally in the corn market, the complex is still skeptical and on edge. Lower prices will most likely be the day's fate as corn directly affects how much feeder buyers can pay for calves.

LEAN HOGS:

After tumbling lower Wednesday afternoon, the lean hog complex is posting a modest rally, seeming to regain some confidence. Late Wednesday afternoon rumors were popping up that African swine fever had been confirmed in Canada, but thankfully, those rumors weren't true and our neighbor to the north is ASF free. However, USDA did confirm that ASF has been detected in the Dominican Republic, which frankly is still too close for comfort. The U.S. currently does not import any pork from the Republic. August lean hogs are up $0.92 at $106.62, October lean hogs are up $0.05 at $89.57 and December lean hogs are up $0.65 at $82.80.

The CME Projected Lean Hog Index for 7/27/2021 is down $0.11 at $111.94 and the actual index for 7/26/2021 is down $0.17 at $112.05. Hog prices are unavailable on the National Direct Morning Hog Report due to confidentiality. However, we do know 2,840 head have sold and the five-day rolling average sits at $103.83. Pork cutouts total 115.66 loads with 96.66 loads of pork cuts and 19.00 loads of trim. Pork cutout values: up $2.40, $127.37.

Pork net sales of 38,500 mt reported for 2021 were up 57% from the previous week and 43% from the prior four-week average. The three largest buyers were Mexico (25,100 mt), Chile (3,300 mt) and Japan (3,200 mt).

Thursday Morning Livestock Market Update - African Swine Fever Confirmed in Dominican Republic

GENERAL COMMENTS:

Live cattle futures tried valiantly Wednesday to regain what was lost Tuesday, but to no avail. Cash did not provide any solid direction, but the few that did trade were $1.00 to $3.00 higher. Packers are reaping greater benefit from higher boxed beef prices but will be reluctant to pass this along by increasing their bids. Feedlots have been holding firm with higher asking prices, which they fully expect to get by the end of the week. There is some concern developing over the rise of COVID cases again and how that might impact demand. Some renewed restrictions may result in some impact on demand, but there is no indication of another economic shut down. Thus, this is something to think about, but not dwell on. Weekly export sales will be released Thursday morning, which may provide some initial market direction until there is more volume of cash cattle traded.

Hog futures traded lower much of Wednesday, remaining in a price range. However, near the close, substantial pressure came into the market, pushing the October contract limit down. USDA reported African swine fever was confirmed in the Dominican Republic. This may have been a knee-jerk reaction to this news, but it should not have an impact on the hog market in the U.S. However, the concern is that it is the first time it has been found in the Western Hemisphere. Pork and pork products have been not been allowed into the U.S. due to swine fever restrictions that have already been implemented some time ago. Cash prices continue to erode with the National Direct Afternoon report posting a decline of $1.74. However, cutouts increased $1.48, indicating continued strong demand. The weekly export report Thursday will be watched for any indication of renewed purchases from China.

	BULL SIDE		BEAR SIDE
1)	A few cattle were traded at higher cash Wednesday. This may set the bar for cash the rest of the week once greater activity develops.	1)	August live cattle futures already have higher cash factored in leaving little reason to push higher this week.
2)	The steady increase of boxed beef prices and somewhat smaller showlists may give feedlots the edge to obtain higher prices for their cattle.	2)	If weekly export sales are less than stellar, it may be difficult for futures to push higher.
3)	August hogs hold a substantial discount to the index with a little over two weeks remaining for the contract.	3)	The confirmed case of African swine fever in the Dominican Republic indicates it is the first time it has been reported in the Western Hemisphere and a closer threat to the U.S.
4)	The quick sell-off seen later Wednesday seems to be more of a knee-jerk reaction rather than from any solid evidence that African swine fever in the Dominican Republic is a threat in the U.S.	4)	If China is again not listed as a buyer on the weekly export sales report, futures may not be able to regain the losses of Wednesday anytime soon.

Wednesday Closing Livestock Market Update - Can Feedlots Get Higher Prices This Week?

GENERAL COMMENTS:

It was a mixed day for the livestock complex as the live cattle market aspired to trade fully higher, but the cash cattle market's lack of commitment waned on its rally. The feeder cattle contracts grew skeptical as the corn market flirted with higher prices and as the live cattle market couldn't signal full-throated support. And the lean hog complex had the toughest day as the market's deferred contracts continue to worry about long-term demand. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.74 with a weighted average of $103.80 on 7,936 head. December corn is up 2 3/4 cents per bushel, and December soybean meal is down $3.10. The Dow Jones Industrial Average is down 127.59 points, and the NASDAQ is up 102 points.

LIVE CATTLE:

The live cattle contracts gave the market all that they had through Wednesday's trade, but without having fundamental support from the cash cattle market, the market simply spun its wheels. August live cattle closed $0.15 higher at $123.07, October live cattle closed $0.10 higher at $128.52 and December live cattle closed $0.02 higher at $133.50. With boxed beef prices closing anywhere from $2 to $3 higher, the market should have been able to easily gain positioning on the board and add at least $1 if not $2 in the cash cattle market. Packers love seeing the dividends that these higher boxes are bringing in, but they are slow to negotiate any higher cash cattle trade. There were a handful of cattle that traded throughout the cash cattle market but not enough to say that any sort of a trend was established. Kansas saw a few head trade from $120 to $122, and Iowa saw a small sampling trade at $195. Interest should be more aggressive in Thursday's market. Wednesday's slaughter is estimated at 120,000 head -- 3,000 head more than a week ago and 1,000 head more than a year ago.

The Fed Cattle Exchange Auction listed a total of 7,773 head; of that, 1,085 sold, 181 were scratched from the auction and 6,507 head were listed as unsold, as they did not meet reserve prices, which ranged from $119 to $123. Opening prices ranged from $115 to $118; high bids ranged from $116 to $120. The state-by-state breakdown looks like this: Texas 7,463 total head, with 1,085 head sold at $119 to $120, 6,197 head unsold and 181 scratched from the auction; Kansas 310 total head, all of which went unsold.

Boxed beef prices closed higher: choice up $3.43 ($273.16) and select up $2.18 ($256.12) with a movement of 136 loads (76.68 loads of choice, 29.60 loads of select, 14.57 loads of trim and 15.22 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady to $1 higher. This week's cash cattle market has the chance to trade higher, but if it's going to champion higher prices, feedlots will have to be patient, and they will have to work together. If some feedlots start selling early and packers get close to 50,000 head (plus or minus) bought, then the market will most likely lose its chance to trade higher, as packers will step back and wait for the following week.

FEEDER CATTLE:

The feeder cattle contracts had high hopes for Wednesday's trade, but traders wouldn't dive into the complex while corn was flirting with the notion of trading higher. August feeders closed $0.52 lower at $160.17, September feeders closed $0.55 lower at $163.45 and October feeders closed $0.37 lower at $165.57. Throughout the countryside, the market's ambition hasn't eased up whatsoever, but technically speaking, the board is looking for strong signs in order to merit the higher trade the market yearns for. If the cash cattle market can prove that prices will be higher this week, then alongside stronger boxed beef prices, the feeder cattle contracts may feel safe in their upward quest. But, for now, the market's leeriness comes as the corn market could trade higher and as the cash cattle market hasn't committed itself to higher trade. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers sold $1 to $3 higher, and feeder heifers traded $3 to $5 higher. Steer and heifer calves under 500 pounds sold $6 to $8 higher, and those weighing heavier sold $2 to $5 higher. The market saw good demand throughout the entire sale but saw excellent interest in the lighter-weight calves. The CME feeder cattle index 7/27/2021: up $0.39, $154.36.

LEAN HOGS:

The lean hog complex closed lower as uncertainty pertaining to what the second half of 2021 will look like continues to undermine the market. August lean hogs closed $1.77 lower at $105.70, October lean hogs closed $3 lower at $89.52 and December lean hogs closed $2.70 lower at $82.15. Unfortunately, the questions the market keeps raising will only be able to be answered with time. Historically, hog supplies increase by September, and the market must navigate its way through the added tonnage. But supplies are thin heading into fall, and with a robust domestic consumer base and a lively export market, the market could fare better than what the board is showing at this point. More than anything, keeping close tabs on how supplies manage throughout the countryside will be incredibly important as well as consumer demand domestically and internationally. Pork cutouts total 284.96 loads with 256.46 loads of pork cuts and 28.51 loads of trim. Pork cutout values: up $1.48, $124.97. Wednesday's slaughter is estimated at 471,000 head -- 3,000 head less than a week ago and 5,000 head less than a year ago. The CME lean hog index 7/26/2021: down $0.07, $112.05.

THURSDAY'S CASH HOG CALL: Steady to somewhat lower. Packers have shown in recent weeks that they have grown comfortable buying aggressively in the early part of the week and then have let the latter part of the week coast on by. If Thursday's export report shows heightened demand, then packers may get anxious and buy a few more hogs in Thursday's market. Largely, prices will likely remain steady to somewhat lower, but the real question will be in the number of hogs they buy.

Tuesday Midday Livestock Market Summary - Live Cattle Seek Higher Levels

GENERAL COMMENTS:

Live cattle futures are realizing with consumer demand as robust as it is and with boxes jumping higher throughout the week, the futures might as well trade higher too! This comes with perfect timing for the cash cattle trade as feedlots aspire to see higher prices this week but will need the market's full support to do so. December corn is up 3 1/2 cents per bushel and December soybean meal is down $4.20. The Dow Jones Industrial Average is down 54.78 points and NASDAQ is up 104.65 points.

LIVE CATTLE:

Live cattle contracts are just itching for another good rally to develop in Wednesday's market. With boxed beef prices continuing to seek a brisk pace to higher prices, the cash cattle market stands an excellent chance at demanding higher prices this week. Thus far, there's not been much trade throughout the countryside other than a few head in Nebraska which sold for $123.00; but before the day is over more trade should develop. Asking prices remain around $122-plus in the South and $200-plus in the North. August live cattle are up $0.27 at $123.20, October live cattle are up $0.40 at $128.80 and December live cattle are up $0.25 at $133.72.

The Fed Cattle Exchange Auction listed a total of 7,773 head; of that, 1,085 sold; 181 were scratched from the auction; and 6,507 head were listed as unsold, as they did not meet reserve prices which ranged from $119 to $123. Opening prices ranged from $115 to $118, high bids ranged from $116 to $120. The state-by-state breakdown looks like this: Texas 7,463 total head, with 1,085 head sold at $119 to $120, 6,197 head unsold and 181 scratched from the auction; Kansas 310 total head, all of which went unsold.

Boxed beef prices are higher: choice up $2.72 ($272.45) and select up $1.57 ($255.51) with a movement of 93 loads (49.06 loads of choice, 18.61 loads select, 11.97 loads of trim and 13.10 loads of ground beef).

FEEDER CATTLE:

The feeder cattle and corn markets have quarreled Wednesday morning as both aspire to trade higher. Breaking into Wednesday's trade, the corn market held the advantage as the feeder cattle contracts were leery upon corn's advancement and upon not having seen any developments being made in the cash cattle market. Thankfully Wednesday's midday report showed boxed beef prices were higher once again and cattle are starting to sell in Nebraska for $123. Both these factors gave feeders the confidence they needed to move the market higher and begin to creep toward the resistance at $162.00. August feeders are up $0.10 at $160.80, September feeders are up $0.07 at $164.07 and October feeders are up $0.05 at $166.00.

LEAN HOGS:

Lean hog futures may have petered out but there's still traction being made in the market fundamentals. It's impressive to see packers have already bought upward of 6,000 hogs; with supplies being short they wouldn't be aggressively chasing the cash hog market if they thought the pork cutout value was going to wane lower. August lean hogs are down $0.57 at $106.90, October lean hogs are down $1.77 at $90.75 and December lean hogs are down $1.37 at $83.47.

The projected CME Lean Hog Index for 7/26/2021 is down $0.17 at $112.05 and the actual index for 7/23/2021 is up $0.01 at $112.22. Hog prices are unchanged from Tuesday on the National Direct Morning Hog Report, thus far there's been 6,386 head bought with a weighted average of $103.93, ranging anywhere from $101.00 to $108.00 and a five-day rolling average of $103.96. Pork cutouts total 167.32 loads with 153.17 loads of pork cuts and 14.16 loads of trim. Pork cutout values: up $1.69, $125.18.

Wednesday Morning Livestock Market Update - Mixed Trading Expected

GENERAL COMMENTS:

Live cattle futures tried, but just could not maintain the upward momentum Tuesday. The October contract made a higher high reaching near chart resistance, but then fell back as buying interest waned. Boxed beef continued to push higher as retail is looking ahead to Labor Day demand. Choice cuts gained $1.80 with select cuts up $3.02. Whether the strength in boxed beef will increase the need for packers to step up and pay more for cattle remains to be seen. The few cattle that traded Tuesday was not a good indication of what will possibly take place Wednesday or the rest of the week. Weights are holding rather steady at the time of year when generally they would increase, indicating marketing is current.

Hogs again pushed to new highs for the current trend with the December contract nearly closing the chart gap left from June 15. That will likely be filled quickly. Hog futures have made an impressive comeback from the lows on June 24 despite some lackluster cash and China being out of the export market with the only activity from them being cancellations. Cash was slightly lower on the National Direct Afternoon report with a decline of $0.45. However, cutouts gained $0.55 with strong demand. Packers continue to scour the countryside to find the hogs necessary to keep chain speed balanced with strong demand.

	BULL SIDE		BEAR SIDE
1)	Boxed beef prices are trending higher again indicating strong demand. This should cause packers to be more aggressive and possibly pay higher prices.	1)	Cattle could not hold the highs Tuesday as short-covering and new buying ran its course. Technical resistance was not able to be penetrated in the October contract.
2)	December and later live cattle contracts made new highs Tuesday as cattle supplies look to be tighter down the road based on the recent reports.	2)	Packers have cattle purchased ahead, which may leave them less aggressive this week and possible bidding no better than steady cash.
3)	The trend in hogs is up with higher highs made again Tuesday. Traders have more confidence purchasing futures in anticipation of tighter supplies.	3)	Packers were able to purchase a significant amount of hogs without having to spend more money already this early in the week. This does not bode well for the rest of the week.
4)	Monday's hog slaughter was revised lower, possibly indicating the hogs just are not out there to keep slaughter at the usual levels.	4)	Hog futures are overbought technically and may have a larger price correction if weekly export sales Thursday are not supportive.

Tuesday Closing Livestock Market Update - Traders Cautiously Look for Additional Support

GENERAL COMMENTS:

It was a rather uneventful day throughout the livestock sector, as traders let most of the contracts wane lower, wanting more reassurance that the market does indeed support higher trade. Heading into Wednesday's trade, seeing where cash cattle prices land will be critical as feedlots have an opportunity to demand at least $1.00 to $2.00 more. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.45 with a weighted average of $105.54 on 7,166 head. December corn is down 1/2 cent per bushel and December soybean meal is up $6.10. The Dow Jones Industrial Average is down 85.79 points and NASDAQ is down 180.13 points.

LIVE CATTLE:

The live cattle contracts endured a slight regression in their nearby contracts, but the market's deferred contracts still rounded out the day higher. The market's set ack simply comes as a technical pause as traders look to see how sustainable this rally is. With boxed beef prices likely to rally over the next two to three weeks to keep up with the market's swift demand, packers may run slightly more aggressive kill schedules and even dip into the cash cattle market ever so slightly. All these points que positive accolades and should bring confidence. August live cattle closed $0.52 lower at $122.92, October live cattle closed $0.77 lower at $128.42 and December live cattle closed $0.50 lower at $133.47. There were a handful of cattle that traded in Iowa for $195 to $200, but largely the cash cattle market was idle throughout the day. Significant trade isn't expected to transpire until sometimes Wednesday, most likely after the online auction. Tuesday's slaughter is estimated at 119,000 head, 2,000 head more than a week ago and steady with a year ago. The CBP Texas Cash Pool listed 291 head but no trade was reported. Bids were at $119.05, $117.40, $119.13, and $119.

Boxed beef prices closed higher: choice up $1.80 ($269.73) and select up $3.02 ($253.94) with a movement of 157 loads (87.03 loads of choice, 39.31 loads of select, 15.79 loads of trim and 14.84 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. If feedlots will stick together and resist the urge to settle for steady prices, the market has at least $1.00 or $2.00 more to give than what last week's weighted averages were. The tricky part about the current cash cattle market is that feedlots and packers know that packers don't need a large quantity of cattle, as they've been committing cattle for the deferred delivery for weeks on end. So, if the market is going to achieve the advancement this week, feedlots will have to rally along one another and resist the urge to fold their hand at steady prices.

FEEDER CATTLE:

The feeder cattle contracts may have closed lower, but it's not because the market lacks fundamental support. Instead, traders hit the sidelines of the market seeming to want to see renewed follow-through support before they confidently continue to rally the market. But with knowing that there are fewer calves roaming the countryside this year than years past -- all while the April live cattle contract trades a mere $0.15 away from $140 and cash cattle are expected to trade higher this week -- traders are likely to see the follow-through support they're looking to find before the week's end. August feeders closed $1.50 lower at $160.70, September feeders closed $0.82 lower at $164.00 and October feeders closed $0.50 lower at $165.95. Thankfully, the market didn't see any pressure from the corn market as it closed steady to $0.01 lower in most of its nearby contracts. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers and heifers sold $2.00 to $5.00 higher. Steer calves traded $4.00 to $6.00 higher and heifer calves traded $1.00 to $4.00 higher. The CME Feeder Cattle Index for July 26: up $0.12, $153.97.

LEAN HOGS:

The lean hog market didn't do a whole lot throughout the day, but given that pork cutout values closed slightly higher and that Tuesday's slaughter is estimated at a snappy 474,000 head (I know, it's not a run away day in terms of slaughter but compared to what's become normal it was a hefty day), the market didn't round of the day defeated by any means. August lean hogs closed $0.07 higher at $107.47, October lean hogs closed $0.57 lower at $92.52 and December lean hogs closed $0.67 lower at $84.85. The market may continue to chop sideways until Thursday, when the market's export report could give the market some steam to roll higher or send contracts rolling lower depending on its outcome. Pork cutouts totaled 339.85 loads with 314.15 loads of pork cuts and 25.70 loads of trim. Pork cutout values: up $0.55, $123.49. Tuesday's slaughter is estimated at 474,000 head, 5,000 head more than a week ago and steady with a year ago. Monday's hog slaughter was revised to 463,000 head, 5,000 head less than what was originally stated. The CME Lean Hog Index for July 23: up $0.01, $112.21.

WEDNESDAY'S CASH HOG CALL: Steady. Packers have been able to secure hog supplies without breaking the bank this past week and they will likely do so again in Wednesday's market.

Tuesday Midday Livestock Market Summary - Boxed Beef Prices Jump

GENERAL COMMENTS:

Of all the complications markets saw through 2020 and 2021, demand has not hindered 2021's beef or pork sectors. As Labor Day quickly approaches, boxed beef prices are again rallying and feedlots cross their fingers and hope they can push the cash cattle market higher as packers see increased dividends from consumers (once again). December corn is up 1/4 cent per bushel and December soybean meal is up $5.40. The Dow Jones Industrial Average is down 196.47 points and NASDAQ is down 270.43 points.

LIVE CATTLE:

With boxed beef prices strutting a fancy $2.00 advancement at midday, one can't help but want the cash cattle market to trade higher. With Labor Day buying spurring boxes higher, packers are again seeing their end margin increase and consequently have more to give for cash cattle. The tough component of the market will be whether feedlots stick together in marketing this week and demand higher prices. August live cattle are down $0.30 at $123.17, October live cattle are down $0.72 at $128.47 and December live cattle are down $0.57 at $133.30. There's yet to be any action in cash cattle trade, but asking prices should develop in at least the South before the day's end.

Boxed beef prices are higher: choice up $2.72 ($270.65) and select up $2.92 ($253.84) with a movement of 76 loads (45.10 loads of choice, 20.54 loads of select, 6.04 loads of trim and 4.39 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures haven't been lackadaisical in their trade over the last month as the corn market has given the complex an opportunity to rally and calf buyers have hit the early summer sales with immense aggression. But now that the spot August contract has come up against resistance at $162, the market sits and ponders how much true upside there is. As the corn market dips another 1 to 3 cents lower early Tuesday, the feeder cattle market has the green light from the feed sector to trade higher. But traders continue to look at the market and want to see more signs that the market should indeed continue to scale higher. The cash cattle market has yet to do anything this week, but most believe higher trade is in the week's reach. If cash cattle can trade higher, the feeder cattle market may get the supportive signals it needs in order to keep trading higher. August feeders are down $1.12 at $161.07, September feeders are down $0.32 at $164.50 and October feeders are down $0.20 at $166.25.

LEAN HOGS:

Lean hog futures are chopping mostly sideways through Tuesday's trade as the market aspires to trade higher amid robust consumer demand, but traders pull back in caution. August lean hogs are down $0.05 at $107.35, October lean hogs are down $0.42 at $92.65 and December lean hogs are down $0.52 at $85.00. The market is once again hopeful to see another strong pork cutout close, and it surely wouldn't hurt the market's feelings if packers stepped up and bought a large sum of hogs in the afternoon cash market.

The projected CME Lean Hog Index for 7/26/2021 is down $0.18 at $112.06, and the actual index for 7/23/2021 is up $0.01 at $112.24. Hog prices are higher on National Direct Morning Hog Report, up $0.36 with a weighted average of $103.93, ranging from $102.00 to $108.00 on 3,661 head and a five-day rolling average of $104.67. Pork cutouts total 215.82 loads with 194.75 loads of pork cuts and 21.08 loads of trim. Pork cutout values: up $2.82, $125.76.

Tuesday Morning Livestock Market Update - Traders are Cautiously Optimistic

GENERAL COMMENTS:

Both live and feeder cattle futures were the beneficiaries of the reports that were released on Friday. Traders did not buy the rumor, sell the fact Monday, but rather bought the fact. The numbers on the reports gave traders confidence that cattle supplies may be tightening over time. The reports and the surge of futures over the past three days may increase the desire of feedlots to hold for higher cash this week. Boxed beef prices have been increasing after seemly finding a bottom for prices with choice cuts up $1.30 and select cuts of $0.98. This may push packers into having to pay up for cattle this week as they need to keep up with demand. The Commitment of Traders report showed funds reducing their long positions by 487 contracts to 54,627 net-long futures positions. Follow-through trading is expected Tuesday, but there may be a limit to the upside until cash activity begins to unfold.

Hogs did not find the same strength as cattle but did manage a higher close in some contracts. As anticipated, packers were a bit more aggressive to begin the week with the National Direct Afternoon report showing an increase of $1.40. Pork cutouts provide some support with prices up $0.57. Unfortunately, only the August contract was able to establish a higher high. However, the trend remains up in all contracts, keeping the bullishness alive and well. The Commitment of Traders report showed funds very active purchasing 7,618 futures contracts, bringing net-long positions to 77,064 contracts.

	BULL SIDE		BEAR SIDE
1)	Packers may need to bid higher in order to procure the necessary cattle this week as feedlot will hold for higher prices.	1)	Cash will need to support the price movement of cattle futures over the past three days or futures could fall back.
2)	Cattle futures moved solidly above the 20- and 40-day moving averages thereby increasing the desire of traders to buy into the market.	2)	Cattle futures could reach some price resistance at current levels. Short-covering rallies generally last three days and this is day four.
3)	Hogs were able to hold and maintain the upward price trend with August setting a higher high.	3)	Hogs were able to close slightly higher, but not without a fight Monday.
4)	Packers are expected to be aggressive again Tuesday following the pattern of the last few weeks. They need to gain ownership of sooner rather than later.	4)	China is a wild card and with two weeks of net export cancellations, a third would not be supportive to the market. The market might be a bit cautious prior to Thursday.

Monday Closing Livestock Market Update - Go Time

GENERAL COMMENTS:

It was a busy Monday throughout the futures complex as the cattle contracts jumped into the new week ready to blaze new trails and demand trader interest. Early in the day, the lean hog contracts weren't able to summon any support, but as the market closed and fundamental backing shined through, the nearby contracts closed higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.40 with a weighted average of $105.99 on 7,560 head. December corn is up 3 3/4 cents per bushel and December soybean meal is down $1.10. The Dow Jones Industrial Average is up 82.76 points and NASDAQ is up 3.72 points.

LIVE CATTLE:

Live cattle futures didn't waste any time Monday and jumped higher on support from Friday's strong fundamental reports, including the latest Cattle on Feed report and bi-annual Cattle Inventory report. With corn prices trending lower (even though they closed just slightly above steady Monday afternoon) and boxed beef prices finding support -- the market feels charged and fully supported with strong backing. August live cattle closed $1.95 higher at $123.45, October live cattle closed $2.05 higher at $129.20 and December live cattle closed $1.67 higher at $133.97. Packers only bought a dismal 76,804 head of cattle last week in the negotiated cash cattle market, but feedlots have been paying close attention to the market's recent developments and intend to push prices higher this week. Packers obviously won't like the idea of paying more for cash cattle but when boxed beef prices are finding support once again, it's a challenge that feedlots deem worthy of taking on. New showlists appear to be somewhat larger in Texas, larger in Kansas but smaller in Nebraska/Colorado. Monday's slaughter is estimated at 119,000 head -- 4,000 head more than a week ago and 2,000 head more than a year ago. Friday's cattle slaughter was revised to 110,000 head -- that's 4,000 head less than what was originally stated. Saturday revised week to date cattle slaughter totaled 648,000 head.

Last week's negotiated cash cattle trade totaled 76,804 head. Of that, 73% (56,040 head) were bought for nearby delivery while the remaining 27% (20,764 head) were bought with delivery for the following 15 to 30 days.

Boxed beef prices are higher: choice up $1.30 ($267.93) and select up $0.98 ($250.92) with a movement of 106 loads (65.94 loads of choice, 21.80 loads of select, 9.68 loads of trim and 8.91 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Higher. With plenty of supportive signs pinging throughout the cattle market, feedlots are going to stick to their guns this week and try to move the market at least $1.00 to $2.00 higher.

FEEDER CATTLE:

Feeder cattle futures rallied throughout Monday and closed substantially higher amid the corn market's dismal close, up only 2 to 4 cents. August feeders closed $2.12 higher at $162.20, September feeders closed $2.30 higher at $164.82 and October feeders closed $1.95 higher at $167.25. There was concern the August contract would be pressured to be close below resistance at $160.00 if the market wasn't strong enough to sustain the new levels. But the market had ample support and had no problem closing above $162, let alone maintaining $160. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, feeder steers sold $5.00 to $9.00 higher compared to last week, with the exception of those weighing 900 to 950 pounds which sold $1.00 to $2.00 lower. Feeder heifers sold $8.00 to $12.00 higher except those weighing 950 to 1,000 pounds which traded $4.00 to $5.00 lower. Buyers are continuing to come to the sale week-in and week-out amid these lower corn prices and are ready to get their orders filled. The CME Feeder Cattle Index 7/23/2021: up $1.82, $153.85.

LEAN HOGS:

By Monday's close, the lean hog complex was able to muster up enough support to closed mixed. Early in the day, the lean hog contracts failed to pull in any trader interest as the cattle market was stealing front and center stage. But by the day's end lean hog nearby contracts closed mostly higher. August lean hogs closed $0.05 higher at $107.40, October lean hogs closed $0.47 higher at $93.10 and December lean hogs closed $0.05 lower at $85.52. Largely the market needed to see how the day's pork cutout value was going to close and wanted to see where Monday's slaughter figure would land. With pork cutout values closing slightly higher once again and with Monday's slaughter being steady with the market's recent behavior, traders felt and that enough support backed the market. Pork cutouts totaled 300.24 loads with 281.92 loads of pork cuts and 18.33 loads of trim. Pork cutout value: up $0.57, $122.94. Monday's slaughter is estimated at 468,000 head -- 11,000 head more than a week ago and 12,000 head more than a year ago. The CME Lean Hog Index 7/22/2021: down $0.04, $112.21.

TUESDAY'S CASH HOG CALL: Higher. It was surprising to see packers so aggressive in Monday's cash hog market; that most likely means they need hogs and have intentions of keeping hogs close to the knife throughout the week.

Monday Midday Livestock Market Update - Cattle Soak Up Fundamental Support

GENERAL COMMENTS:

It's been an exciting Monday for the cattle contracts as the market frolics in superb fundamental support. Meanwhile, the lean hog market needs to see follow-through support from consumers in order to trade higher and, unfortunately, hasn't been able to draw much attention from traders as the cattle contracts earn all the attention. December corn is up 1 1/2 cents per bushel and December soybean meal is down $0.40. The Dow Jones Industrial Average is up 20.89 points and NASDAQ is down 15.23 points.

LIVE CATTLE:

Live cattle futures are rallying as the market feels extremely confident in its long-term fundamental windshield. With both Friday's Cattle on Feed report and the bi-annual Cattle Inventory report showing bullish figures, the market has every reason to be optimistic. August live cattle are up $1.82 at $123.32, October live cattle are up $1.92 at $129.07 and December live cattle are up $1.55 at $133.85. Boxed beef prices saw support creep into their lower-waning market late last week and to Monday's surprise, both choice and select cuts are trending higher again. The market will eventually see some pressure creep back into the sector as prices are still incredibly high compared to where historic figures comfortably run, but with Labor Day not that far away buyers are securing inventory. New showlists appear to be somewhat higher in Texas, higher in Kansas but lower in Nebraska/Colorado.

Last week's negotiated cash cattle trade totaled 76,804 head. Of that, 73% (56,040 head) were bought for nearby delivery while the remaining 27% (20,764 head) were bought with delivery for the following 15 to 30 days.

Boxed beef prices are higher: choice up $0.98 ($267.61) and select up $0.37 ($250.31) with movement of 51 loads (35.71 loads of choice, 11.07 loads of select, zero loads of trim and 3.77 loads of ground beef).

FEEDER CATTLE:

Following last week's exciting close, feeder cattle futures have jumped headfirst into Monday's trade full of ambition and hopefulness that the market support will sustain. August feeders are up $1.92 at $162.00, September feeders are up $2.10 at $164.62 and October feeders are up $1.70 at $166.20. The corn market has traded cautiously all day and so long as corn continues to trade mostly steady, the feeder cattle market shouldn't have any issues keeping its momentum primed through Monday's close. Looking at the August contract, specifically, with Friday closing right above the $160.00 resistance, we knew the market was going to be pressured to once again prove the contract could trade above $160; thus, seeing $162.00 currently being tested shows how much support backs the complex.

LEAN HOGS:

The lean hog market has had a tough time drawing the interest of traders Monday morning as livestock excitement flutters around the cattle contracts. But as we near the noon hour, the nearby contracts are seeing some modest support creep in and, if the day shows strong fundamentals at closing, the market could see more support in Tuesday's trade. Largely, the lean hog market wants to see strong follow-through demand from consumers. Any export hype will gladly be taken, but with domestic demand being as robust as it is and with supplies being so thin, focusing on U.S. consumers' needs is just as important at this point. August lean hogs are up $0.17 at $107.52, October lean hogs are up $0.32 at $92.95 and December lean hogs are down $0.02 at $85.55.

The projected CME Lean Hog Index for 7/22/2021 is down $0.04 at $112.21, and the actual index for 7/21/2021 is down $0.09 at $112.25. There are no comparisons on the National Direct Morning Hog Report, but 3,670 head and have been with a weighted average of $103.57, ranging from $103.00 to $108.00 and a five-day rolling average of $105.55. Pork cutouts total 148.80 loads with 139.20 loads of pork cuts and 9.60 loads of trim. Pork cutout values: up $5.20, $127.57.

Monday Morning Livestock Market Update - Were the Cattle Reports Friendly Enough?

GENERAL COMMENTS:

Cattle received their support Friday in part from the Cold Storage report but mostly from substantially lower grain prices. Feeder cattle reacted directly from the lower grain prices. Surprisingly, traders have not shied away from the market due to lower cash sales for the week and they seemed confident that the Cattle on Feed report was not going to burn them if they held onto their long positions. Their assessment of the Cattle on Feed report was correct in that it was a friendly report. I would not say it was bullish as placements were down about 1% from a year ago while marketings were up about 1%. The caution here is that futures increased on Thursday and Friday despite lower cash. This could potentially result in futures not needing to move higher as the trade had already factored in a friendly report. Cattle futures are notorious for trading in the opposite direction the following day relative to what the report indicates. How much support will come from the bi-annual Cattle Inventory report is difficult to determine. It generally is not a market mover as it looks at cattle inventory from the previous year. Even though total inventory was down 2% from a year ago with calves down 2% as well, it may little impact.

Hog futures continued to push higher Friday. Even though the National Direct Afternoon report showed cash down $0.72, the anticipation is that packers may follow the pattern of the past few weeks and begin the week aggressively looking for hogs and paying higher prices to get them. They may want to do business early in the week to make sure they have enough on the books by the middle of the week. Strong consumer demand keeps packers active in order to make sure they can keep chain speed at the desired level. There continues to be evidence that hog supplies will become tighter as the year progresses, but now that China may be curtailing imports, more supply may be available to the domestic market. Cutouts were up only $0.06 Friday leaving little support from that area.

	BULL SIDE		BEAR SIDE
1)	Cattle futures have been able to rally even though cash traded lower last week. Traders may feel downside is limited.	1)	Cash is expected to be lower this week as packers are in the position of being less aggressive due to already committed supplies.
2)	Smaller supply of market-ready cattle may limit the downside of cash. Feedlots are current and lower grain prices may keep them willing to hold for nothing less than steady cash.	2)	Buy the rumor sell the fact, may be the response of traders after the Cattle on Feed report resulted in a price correction.
3)	Hog futures for October and later contracts set higher highs each day last week as traders feel confident in stronger prices yet to come.	3)	Hogs have not been able to find much support recently from the cash market. Packers have been able to find sufficient number to fill demand.
4)	The December contract is only about $1.00 shy of closing the chart gap on the upside. This may be accomplished sooner rather than later.	4)	China may be backing away from purchasing U.S. pork as their internal supplies may be increasing. This had been expected and may now be coming to fruition.

Friday Closing Livestock Market Update - Contracts Triumph

GENERAL COMMENTS:

It was a good day for the livestock complex as the cattle contracts were supported by favorable USDA reports and the lean hog market saw higher pork cutout values Friday afternoon and their nearby contracts closed higher as well. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.72 with a weighted average of $104.59 on 3,779 head. December corn is down 18 1/4 cents per bushel and December soybean meal is down $9.80. The Dow Jones Industrial Average is up 238.20 points and NASDAQ is up 152.39 points.

From Friday-to-Friday livestock futures scored the following changes:

August live cattle up $1.33, October live cattle up $1.55; August feeder cattle up $4.45, September feeder cattle up $4.03; August lean hogs up $1.70, October lean hogs up $1.88.

LIVE CATTLE:

Live cattle futures closed higher amid stronger boxed beef prices which are starting to see some interest from early Labor Day buying. August live cattle closed $0.70 higher at $121.50, October live cattle closed $0.47 higher at $127.15 and December live cattle closed $0.45 higher at $132.30. The market didn't see much cash cattle trade develop through Friday, as the only cattle sold were in Iowa; the rest of the trade was done already. As of Friday afternoon, USDA reports showed packers once again only bought enough cattle to barely stick their toes in the water, as only 63,351 head have been reported. This past week Northern dressed cattle traded anywhere from $194 to $202, mostly at $195 which is $3.00 lower than last week. Southern live cattle traded at $117 to $119 but mostly at $119 which is $1.00 softer than last week's trade. Friday's slaughter is estimated at 114,000 head -- 4,000 head less than a week ago and 3,000 head more than a year ago. Saturday's kill is projected to be around 71,000 head. The week's total slaughter is estimated at 652,000 head -- that's 1,000 head less than a week ago and 12,000 head more than a year ago. With a plant being down I don't foresee Saturday's kill being as fruitful as projected.

Well, well, well, if Friday's USDA reports don't scream bullish news, I'm not sure what will. The biggest news made by the Cattle on Feed Report was that marketings in June totaled 2,022,000 head which is the largest that the markets seen since June of 2011. And even though the January Cattle Inventory report is more sought after than the July report, the report once again solidified the fact that the U.S. is in a liquidation phase as cattle inventory totaled 100.9 million head (down 2% from a year ago); beef cows specifically totaled 31.4 million head (down 2%); and the nation's calf crop is estimated at 35.1 million head (down 2% from 2020).

Boxed beef prices closed higher: choice up $0.49 ($266.63) and select up $0.17 ($249.94) with a movement of 131 loads (86.23 loads of choice, 17.49 loads of select, 10.68 loads of trim and 16.11 loads of ground beef). Throughout the week choice cuts averaged $265.88 (down $5.93 from last week) and select cuts averaged $249.31 (down $5.40 from last week) and the week's total movement of cuts, grinds and trim totaled 686 loads.

MONDAY'S CASH CATTLE CALL: $1.00 lower. Packers aren't going to willingly chase the cash cattle market when they have supplies committed for the weeks ahead. The support that boxed prices found this past week as early buying is occurring ahead of the Labor Day weekend helps the cash cattle market as packers may be willing to keep prices semi steady as they aren't feeling as much pressure on the boxed beef side of things given that prices found some short-term support.

FEEDER CATTLE:

It was a sweet week for the feeder cattle complex as the corn market chopped sideways to somewhat lower and the feeder cattle contracts celebrated as buyers were aggressive in filling their orders. August feeders closed $1.87 higher at $160.07, September feeders closed $1.82 higher at $162.52 and October feeders closed $1.87 higher at $164.50. It was surprising to see the spot August contract climb over resistance at $160, but the market's real test will come next week as the market will have to sustain those levels or fall lower. Oklahoma's Weekly Cattle Summary compared to last week showed throughout the whole state feeder steers traded steady to $2.00 higher. Feeder heifers sold $1.00 to $2.00 higher, except those weighing over 800 pounds which sold $3.00 to $6.00 lower. Steer calves sold $1.00 to $5.00 lower and heifer calves traded steady to $3.00 higher. More new-crop or unweaned calves are beginning to make their way to the market and as quality has dropped off and heat has become more potent, it's apparent the summer grass run is close to being done. The CME Feeder Cattle Index 7/22/2021: up $0.64, $152.03.

LEAN HOGS:

Lean hog futures may have been shook by a less-than-desirable export report on Thursday, but come Friday the market was back to rally in its nearby contracts. August lean hogs closed $0.70 higher at $107.35, October lean hogs closed $0.90 higher at $92.62 and December lean hogs closed $0.57 higher at $85.57. The market's slow but steady upward progression has been fueled by unwavering consumer demand and by the fact hog supplies are incredibly thin. So packers are having to work aggressively to secure their needs. Heading into next week's trade the market will continue to listen to see if there's any more buzz about African swine fever in other countries and what potential export opportunities may come with any news. Pork cutouts total 267.07 loads with 243.16 loads of pork cuts and 23.91 loads of trim. Pork cutout values: up $0.06, $122.37. Friday's slaughter is estimated at 434,000 head -- 7,000 head more than a week ago and 34,000 head less than a year ago. Saturday's kill is projected to be around 29,000 head. This week's total slaughter is estimated at 2,332,000 head -- that's 52,000 head more than a week ago and 244,000 head less than a year ago. The CME Lean Hog Index 7/21/2021: down $0.09, $112.25.

MONDAY'S CASH HOG CALL: Steady. Packers will want to address their needs early next week and get a feel for the market's immediate tone regarding demand. Monday's trade will likely be steady but come Tuesday or Wednesday more buying may develop.

Friday Midday Livestock Market Update - Support Finds the Contracts

GENERAL COMMENTS:

The feeder cattle market was able to shoot higher from the day's start as the corn market keeps trending lower, but the live cattle and lean hog contracts took a little more convincing. The cash cattle market hasn't seen an ounce of interest throughout Friday's trade thus far and it's looking like this week's business is essentially done with. December corn is down 12 3/4 cents per bushel and December soybean meal is down $5.50. The Dow Jones Industrial Average is up 199.21 points and NASDAQ is up 120.53 points.

LIVE CATTLE

The live cattle market has seen a mixed bag of tricks throughout the week. Boxed beef prices (though we expect to continue to trend lower) have been trending mildly higher over the last two days. The futures market has seen continued support as the contracts rally, but yet the market sees a weaker slaughter pace and lower fat cattle prices. If you ever thought markets should be simple, here's your lesson of why they aren't! August live cattle are up $0.55 at $121.35, October live cattle are up $0.42 at $127.10 and December live cattle are up $0.52 at $132.37. The cash cattle market hasn't seen so much as one bid renewed as of yet, and it's very likely that the bulk of this week's trade is done with. Throughout the week, Northern dress trade has been at $194 to $202, mostly $195, which is $3.00 lower than last week's weighted average. Southern live have been marked at $117 to $119, mostly $119, roughly $1.00 lower than last week's weighted averages.

Friday afternoon will be busy as the market awaits both the monthly Cattle on Feed report and the biannual Cattle Inventory report. Neither are expected to shake the market in any significant manner. The Cattle on Feed report may show higher placements as drought continues to plague cattlemen in the western states.

Boxed beef prices are higher: choice up $0.42 ($266.56) and select up $1.24 ($251.01) with a movement of 78 loads (54.24 loads of choice, 10.69 loads of select, zero loads of trim and 13.32 loads of ground beef).

FEEDER CATTLE

As the corn market continues to chop sideways, the feeder cattle contracts rally in sheer delight. The market has the support fundamentally as corn in trending sideways to somewhat lower and feeder cattle buyers are eager to get their orders filled. The technical side of the market is showing strong support, but the spot August contract doesn't seem interested in taking on the resistance at $160. Early next week, traders will have to address the market (corn prices, fundamental feeder demand, long-term live cattle prices) and see if there's enough reason to move the market past the long-term resistance. August feeders are up $1.17 at $159.37, September feeders are up $1.50 at $162.20 and October feeders are up $1.35 at $163.97.

LEAN HOGS

After having a tough trade throughout Thursday, the lean hog market has rallied support in its nearby contracts while the deferred continue to trend slightly lower. August lean hogs are up $0.60 at $107.22, October lean hogs are up $1.42 at $93.17 and December lean hogs are up $0.95 at $85.95. It's not concerning to see that packers weren't aggressive in Friday morning's cash hog trade, as they were aggressive in the cash market earlier in the week and want to see how next week's demand holds before they throw more money at chasing thin hog supplies. Watching to see where the afternoon's pork cutout value closes will be important.

The projected CME Lean Hog Index for July 22 is down $0.04 at $112.23, and the actual index for 7/21/2021 is down $0.08 at $112.27. Hog prices are unavailable on the National Direct Morning Hog Report due to confidentiality. However, we are able to see that there's been 3,126 head sell and that the five-day rolling average is at $105.99. Pork cutouts total 160.22 loads with 147.42 loads of pork cuts and 12.80 loads of trim. Pork cutout values: up $4.72, $127.03.

Friday Morning Livestock Market Update - Cattle on Feed Report May Limit Volatility

GENERAL COMMENTS:

Cattle futures got a boost Thursday from lower gran prices again. Support also came from higher boxed beef prices. Choice cuts gained $0.90 with select cuts up $1.00. However, cash activity was not what we wanted to see as business was done at lower prices. Cattle in the North sold on an average $3.00 lower than last week with cattle in the South $1.00 lower. That impact was mitigated due to an acceptable weekly export sales report and the fact that the June Cold Storage report was to be released after the close. Cold storage numbers may provide some support to the market Friday as beef in cold storage in June was the lowest level over the past seven years. However, traders may remain cautious as they look ahead to the Cattle on Feed report to be released after the close Friday. The estimates for the report are for placements at 95.9%, marketings at 102.1% and on-feed numbers at 99% of last year. Traders have had overnight to digest the Cold Storage report and will have the weekend to digest the Cattle on Feed report.

The cash hog price did not fair very well Thursday as the price on the National Direct Afternoon report was down $1.47. Packers are again following the pattern with stronger cash prices earlier in the week and weaker prices later. The weekly export sales report was somewhat bearish as China cancelled pork sales instead of being a buyer, putting some pressure on futures. But, thankfully, they closed off their lows. This could indicate the market will maintain its uptrend. The June Cold Storage report may provide some support as pork supply was down 4% from May and down 4% from June 2020. Pork bellies supply actually increased, but still remains 32% below a year ago. Cutouts gained slightly with an increase of $0.22. Saturday hog slaughter is projected at 31,000 head.

	BULL SIDE		BEAR SIDE
1)	A good export sales report and lower grain prices should provide further support Friday.	1)	Cash cattle trading lower this week does not paint a positive picture for much upside potential. .
2)	Cattle futures negated the losses of the past week, providing technical support as the market looks ahead to the Cattle on Feed report Friday.	2)	If actual numbers on the Cattle on Feed report do not meet estimates, upside price potential may be limited.
3)	Even though hog futures closed lower, contracts did establish higher highs Thursday, keeping the uptrend intact.	3)	China was not a buyer listed on the weekly export sales report, increasing the fear their hog numbers have increased, leaving them less dependent on imports.
4)	The Cold Storage report was supportive to the overall market as inventory continues to remain below year earlier levels.	4)	Packers are not expected to be aggressive Friday as general supplies are already in hand for the week.

Thursday Closing Livestock Market Update - Cattle Skip Higher

 GENERAL COMMENTS:

Thursday was a winning day for the cattle contracts as both the live and feeder cattle futures closed higher, celebrating a strong export report and a weaker corn market. The lean hog market's rally came to a bitter end, though, as the market didn't find the support it was hoping to see on the export report. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.47 with a weighted average of $105.31 on 6,601 head. December corn is down 7 1/4 cents per bushel and December soybean meal is down $8.00. The Dow Jones Industrial Average is up 25.35 points and NASDAQ is up 52.65 points.

Thursday's Cold Storage Report showed total red meat supplies in freezers were down 4% from the previous month and down 8% from last year. Total pounds of beef in freezers were down 4% from the previous month and down 7% from last year. Frozen pork supplies were down 4% from the previous month and down 4% from last year. Stocks of pork bellies were up slightly from last month but down 32% from last year.

LIVE CATTLE:

What a day for live cattle market. Upon juggling the findings of the Cold Storage report, to seeing higher boxed beef prices but lower cash cattle prices and dismal chain speeds -- the live cattle market had a lot to absorb throughout Thursday. August live cattle closed $0.75 higher at $120.80, October live cattle closed $1.42 higher 126.67 and December live cattle closed $0.80 higher at $131.85. There was light to moderate trade in the cash cattle market with Northern dressed cattle selling anywhere from $194 to $200, but mostly at $195 which is $3.00 lower than last week's weighted average. Southern live cattle traded anywhere from $117 to $119, mostly at $119 which is $1.00 lower than last week. Of the dressed cattle that were purchased, a lot sold with delayed delivery for the weeks of Aug. 2 and Aug. 16. Thursday's slaughter is estimated at 118,000 head -- 1,000 head less than a week ago and 2,000 head less than a year ago.

It was interesting to note in Thursday's Cold Storage Report, total supplies of beef at the lowest levels they've been at in the last seven years. Don't forget Friday will be a big day for the market as both the monthly Cattle on Feed report and the bi-annual Cattle Inventory report will be released.

Beef net sales of 25,100 metric tons (mt) reported for 2021 were up noticeably from the previous week and up 63% from the prior four-week average. The three largest buyers were South Korea (8,600 mt), Japan (5,200 mt) and China (4,100 mt).

Thursday's actual slaughter data for the week ended 7/10/2021 saw cattle slaughter at 580,744 head and both steer and heifer weights grew by a pound from the previous report. Steers increased by a pound to average 885 pounds, and heifers jumped one pound to average 812 pounds.

Boxed beef prices closed higher: choice up $0.90 ($266.14) and select up $1.00 ($249.77) with a movement of 118 loads (71.99 loads of choice, 22.93 loads of select, 4.83 loads of trim and 17.76 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. With cash cattle already trading in both the North and the South, prices will likely remain where they are.

FEEDER CATTLE:

The corn market was bearish all Thursday and that was the green light the feeder cattle market was looking for. August feeders closed $1.42 higher at $158.20, September feeders closed $1.40 higher at $160.70 and October feeders closed $1.52 higher at $162.62. The spot August contract is going to come up against resistance at $160.00, while all its counterparts are trading at levels beyond that threshold currently. The market stands a fair chance at testing resistance if the corn market continues to trade lower and if traders are willing to extend their positions. The market's support throughout the countryside continues to flourish as buyers want calves and feeders alike and are willing to pay up for them. At Winter Livestock Auction in Pratt, Kansas, compared to last week feeder steers weighing 500 to 900 pounds sold $5.00 to $6.00 higher. Steers weighing 900 to 1,000 pounds sold $6.00 to $8.00 higher. Feeder heifers weighing 650 to 950 pounds sold $2.00 to $5.00 higher. Heifer calves weighing 500 to 650 pounds sold $7.00 to $10.00 higher. The CME Feeder Cattle Index 7/21/2021: up $0.68, $151.39.

LEAN HOGS:

Thursday never gave the lean hog market much of chance at trading higher. Upon seeing a dismal export report, the market veered lower and ultimately ended up closing lower in all the contracts other than spot August. August lean hogs closed $0.07 higher at $106.65, October lean hogs closed $0.67 lower at $91.72 and December lean hogs closed $0.32 lower at $85.00. Even though the cash hog market closed lower, and Thursday was a little disappointing to the market as China wasn't a buyer on the export report, packers still showed modest aggression in the day's cash hog trade as they purchased right at 6,601 head. If they had all their needs met it would have been more usual to see the day close with only 2,500 to 4,000 head selling in the cash market. Thankfully, the higher prices from the pork cutout values have kept packers engaged with the market and will likely continue to do so throughout the remainder of the year as supplies will be thin. Pork cutouts total 279.53 loads with 258.22 loads of pork cuts and 21.31 loads of trim. Pork cutout values: up $0.22, $122.31. Thursday's slaughter is estimated at 469,000 head -- 8,000 head more than a week ago and 1,000 head less than a year ago. The CME Lean Hog Index 7/20/2021: up $0.01, $112.34.

Thursday's actual slaughter data for the week ended 7/10/2021 showed live hog weights remained steady from the previous week at 281 pounds, and dressed weights grew by a pound to average 210 pounds.

Pork net sales of 24,500 mt reported for 2021 were up noticeably from the previous week, but down 12% from the prior four-week average. The three largest buyers were Mexico (10,000 mt), Japan (5,200 mt) and Canada (4,000 mt).

FRIDAY'S CASH HOG CALL: Lower. As packers head into the weekend, they likely won't support the cash hog market much and will rather pick up the hogs they need early next week.