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.
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