GENERAL COMMENTS:
It wasn't an easy week for the livestock complex as the market endured sharp technical resistance and wavering fundamental support, but, luckily, by Friday's close most of the livestock complex was able to close higher.
Hog prices closed higher on the National Direct Afternoon Hog Report, up $2.04 with a weighted average of $111.86 on 9,470 head. December corn is down 6 3/4 cents per bushel and December soybean meal is down $3.60. The Dow Jones Industrial Average is up 448.23 points and NASDAQ is up 142.14 points.
From Friday to Friday livestock futures scored the following changes: August live cattle down $2.77, October live cattle down $2.50; August feeder cattle up $2.13, September feeder cattle up $2.40; July lean hogs up $2.35, August lean hogs up $1.35.
LIVE CATTLE:
The live cattle complex suffered brutal losses earlier in the week, but thankfully, upon seeing a stronger export report, a lively feeder cattle market and weaker corn prices, the market was able to close higher other than in the spot August contract. August live cattle closed $0.05 lower at $119.22, October live cattle closed $0.12 higher at $125.57 and December live cattle closed $0.62 higher at $130.90. Friday's cash cattle trade was mostly nonexistent as packers had secured their needs earlier in the week and so consequently the market sat idle waiting for the weekend. This past week live cattle trade for mostly $119 to $120, and dressed cattle traded for mostly $197 to $198. Friday's slaughter is estimated at 120,000 head, 7,000 head more than a week ago and 4,000 head more than a year ago. Saturday's kill is projected to be around 95,000 head. This week's total slaughter is estimated at 582,000 head, that's 44,000 head less than a week ago and 67,000 head less than a year ago.
Beef net sales of 23,700 mt reported for 2021 were up 96% from the previous week and 64% from the prior four-week average. The three largest buyers were South Korea (10,400 mt), Japan (5,800 mt) and China (2,700).
Boxed beef prices closed lower: choice down $3.38 ($278.59) and select down $2.65 ($257.41) with a movement of 109 loads (48.59 loads of choice, 31.86 loads of select, 8.77 loads of trim and 20.26 loads of ground beef). This past week choice cuts averaged $283.03 (down $7.80 from last week) and select cuts averaged $260.72 (down $8.28 from a week ago) and the market's total movement of cuts, grinds, and trim total 518 loads.
MONDAY'S CASH CATTLE CALL: Steady. With packers being able to continuously add to their forward bought purchases, their need to dive wildly into the market is minimal.
FEEDER CATTLE:
The feeder cattle contracts traded in a split essence this past , as the board made strong moves early in the week but ran into resistance in the later half. The corn market's deterioration came as a saving grace to the feeder cattle complex as buyers were more eager to fill their orders this past week and paid fancy prices for the calves that fit their load. Feeder buyers would like to see the current market's cash cattle trade stronger, but thankfully there's hope for these calves to yield better fat cattle prices in 2022. Looking at the live cattle contracts from December 2021 on, prices at or above $130 are constant, and are far better than the market's current $119 to $120 threshold. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to two weeks ago, a higher undertone was noted on steers up to 800 pounds, steers weighing 800 to 850 pounds sold $4.00 higher, steers weighing 850 to 900 pounds sold $7.00 higher and steers weighing 950 to 1,050 pounds were $2.00 higher. Feeder heifers weighing 600 to 650 pounds sold $6.00 higher, heifers weighing 700 to 950 pounds sold $1.00 to $3.00 higher, and heifers weighing 1,000 to 1,050 sold $4.00 stronger. Demand was excellent and buyers loved the fact that they could buy large strings of cattle from one operation and have their orders met. The CME Feeder Cattle Index for July 8: unavailable at this time.
LEAN HOGS:
The lean hog complex rallied on the unveiling of a strong export report, which not only showed more product moved week over week, but also showed that China was back to buying. July lean hogs closed $0.90 higher at $111.00, August lean hogs closed $1.20 higher at $101.57 and October lean hogs closed $1.32 higher at $85.42. With Friday afternoon's hog prices closing over $2.00 higher and on a volume of 9,470 head, one can't help but think that Friday's export report also encouraged packers to secure some more supplies for the weeks ahead. Pork cutouts totaled 230.35 loads with 197.72 loads of pork cuts and 32.63 loads of trim. Pork cutout values: down $0.72, 116.17. Friday's slaughter is estimated at 463,000 head, 38,000 head more than a week ago and 4,000 head more than a year ago. Saturday's kill is projected to be around 55,000 head. This week's total slaughter is estimated at 1,923,000 head, that's 354,000 head less than a week ago and 674,000 head less than a year ago. The CME Lean Hog Index for July 7: down $0.36, $109.77.
Pork net sales 43,800 mt reported for 2021 were up 53% from the previous week and 65% from the prior four-week average. The three largest buyers were China (16,300 mt), Mexico (13,800 mt) and Japan (8,400 mt).
MONDAY'S CASH HOG CALL: Steady. Packers bought a large quantity of hogs (in the current market's standards) Friday afternoon, so heading into next week's trade, they could be hesitant in their buying early in the week.
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