GENERAL COMMENTS:
It wasn't a positive day for the cattle contracts as stout resistance kept the contracts from trading higher, but the lean hog contracts enjoyed a higher pork cutout values and modest gains on the board. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.09 with a weighted average of $109.82 on 5,001 head. December corn is down 7 1/4 cents per bushel and December soybean meal is down $2.40. The Dow Jones Industrial Average is down 259.86 points and NASDAQ is down 105.28 points.
LIVE CATTLE:
It's been a tough week for the live cattle complex as resistance has settled above the market and is driving prices substantially lower. August live cattle closed $1.32 lower at $119.27, October live cattle closed $1.25 lower at $125.45 and December live cattle closed $1.20 lower at $130.27. The August live cattle contract, unfortunately, closed not only lower than the 40-day moving average ($120.53), but also lower than the 100-day moving average ($119.75). With a lower trending board, packers have been able to drag the cash cattle market lower this week, and with supplies expected to tighten in weeks ahead, they didn't think twice about doing so. There was some more cash cattle trade that developed throughout Thursday's trade, mostly steady with Wednesday's prices, but there were a lot of Northern cattle that sold with time. It was common to see cattle in Nebraska and Iowa sell for delivery on the weeks of July 19 and July 26. This isn't a positive note for the cash cattle market in the weeks ahead, as once again packers won't have to work the cash cattle market because they have a large percentage of their needs already contracted. Thursday's slaughter is estimated at 120,000 head, 1,000 head more than a week ago and 2,000 head more than year ago.
Thursday's actual slaughter data shared that, for the week ending June 26, there were 660,332 head of cattle processed and both steer and heifer weights fluctuated. Steers gained four pounds from the previous week to average 883 pounds and heifers lost a pound from the previous week to average 812 pounds.
Boxed beef prices closed lower: choice down $2.93 ($281.97) and select down $2.02 ($260.06) with a movement of 130 loads (82.91 loads of choice, 19.93 loads of select, 9.87 loads of trim and 17.53 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. It's likely that the bulk of this week's trade is done, other than some clean-up trade that could develop throughout Friday. If any cattle do trade, it will likely be for steady prices with the week's average.
FEEDER CATTLE:
The corn market closed lower again Thursday afternoon, but the feeder cattle contracts couldn't use the corn market's deterioration to their advantage as tough resistance sent feeders lower throughout the day. August feeders closed $1.67 lower at $157.32, September feeders closed $1.50 lower at $160.02 and October feeders closed $1.37 lower at $162.12. The market has seen phenomenal support from the countryside (look at the day's feeder cattle index jump, and you'll see what I mean), but the resistance at $160.00 isn't something that's easily going to be broken through. At Bassett Livestock Auction in Bassett, Nebraska, compared to two weeks ago, the market was extremely strong. Steer calves weighing 450 to 700 pounds sold $3.00 to $8.00 higher, and steers weighing 750 to 1,000 pounds sold $5.00 to $13.00 higher. Heifer calves weighing 500 to 700 pounds traded $7.00 to $11.00 higher, and heifers weighing 750 to 900 pounds traded $8.00 to $12.00 stronger. The CME Feeder Cattle Index for July 7: up $5.79, $151.51.
LEAN HOGS:
The lean hog market enjoyed another day of higher pork cutout values, and even got to see most of the complex close higher on the board. July lean hogs closed $0.95 higher at $110.10, August lean hogs closed $0.02 lower at $100.37 and October lean hogs closed $0.37 higher at $84.10. Thursday's slaughter wasn't a runaway by any means and really echoes the fact that hogs are hard to come by right now. Packers aren't going to push the market just to chase the cycle. Looking ahead to Friday, the week's export report isn't expected to unveil anything too mind blowing as U.S. pork prices are still high compared to other nations and so exports could be light. Thankfully, in a market where demand isn't the problem, domestic consumers will take all the product they can get. Pork cutouts total 320.60 loads with 300.51 loads of pork cuts and 20.09 loads of trim. Pork cutout values: up $1.15, $116.89. Thursday's slaughter is estimated at 465,000 head, 7,000 head more than a week ago and 3,000 head less than a year ago. The CME Lean Hog Index for July 6: down $0.68, $110.13.
Thursday's actual slaughter data shared that for the week ending June 26 live hog weights averaged 282 pounds (down 1 pound from the previous week) and dressed hog weights averaged 210 pounds (down 1 pound as well).
FRIDAY'S CASH HOG CALL: Steady. With packers running lackadaisical processing speeds, it's unlikely that they dive into the cash market ahead of the weekend.
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