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.
No comments:
Post a Comment