GENERAL COMMENTS:
It was another quiet day in the livestock complex as the contracts treaded lightly throughout Tuesday's business. The cash hog market saw phenomenal demand, but the cash cattle market went largely unsupported. Hog prices closed higher on the National Direct Afternoon Hog Report, up $3.60 with a weighted average of $109.84 on 10,963 head. December corn is up 13 1/2 cents per bushel and December soybean meal is up $5.30. The Dow Jones Industrial Average is up 549.95 points and NASDAQ is up 223.90 points.
LIVE CATTLE:
The live cattle complex continues to trade lower as support continues to be an illusive factor in the nearby market. August live cattle closed $0.47 lower at $119.77, October live cattle closed $0.40 lower at $124.70 and December live cattle closed $0.70 lower at $130.42. We continue to get closer to closing below the 100-day moving average of $119.91 in the August contract as weaker boxed beef prices and a lack of leverage in the cash cattle market don't bode well for the complex. The cash cattle market was mostly quiet again Tuesday as just a handful of cattle sold in Nebraska and Iowa, but there wasn't enough trade to say that a trend has been established. The Texas Cash Pool didn't see any cattle trade this week and their only bids were that of $118.00 and $118.15. Tuesday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 3,000 head more than year ago. Monday's slaughter was revised to 115,000 head, which is 3,000 head less than what was originally stated.
Boxed beef prices closed lower: choice down $1.61 ($264.88) and select down $0.91 ($248.58) with a movement of 152 loads (74.99 loads of choice, 36.53 loads of select, 18.59 loads of trim and 22.21 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady at best. Packers aren't going to be willing to give up margin as they hold the market's leverage; they have cattle committed for the weeks ahead and control processing speeds.
FEEDER CATTLE:
The corn market rallied Tuesday as corn growing states were relieved to see little rain in the upcoming forecast. Meanwhile, cow-calf producers would do just about anything in the western half of the U.S. to get a good rain shower, and obviously don't like seeing the corn market's $0.12 to $0.15 rally in the nearby contracts. Thankfully, buyers continue to hit the sales aggressively this week as the live cattle contracts are still showing plenty of opportunity ahead in 2022 for the fat cattle market. August feeders closed $1.85 lower at $155.52, September feeders closed $1.27 lower at $157.77 and October feeders closed $1.07 lower at $159.77. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers and heifers sold steady to $2.00 higher. Steer calves sold $1.00 to $2.00 lower and heifer calves traded steady to $2.00 higher. The market's offering wasn't quite as attractive as last week's sale, but demand was still good. The CME Feeder Cattle Index for July 19: up $0.42, $150.90.
LEAN HOGS:
The lean hog complex was able to regain what Monday had lost and even added to the market ever so slightly. It was encouraging to see packers so bold in Tuesday's afternoon cash trade as they purchased over 10,000 head for $3.60 more than Monday's trade. The cash hog market will continue to be a fickle one moving forward, as packers aren't going to be willing to throw large sums of money at the cash hog market if demand weakens whatsoever. The thin number of market-ready hogs continues to favor hog producers as packers are still having to dip into the cash market to keep chain speeds where they want them. August lean hogs closed $0.52 higher at $105.00, October lean hogs closed $1.65 higher at $91.02 and December lean hogs closed $1.47 higher at $84.52. Pork cutouts totaled 340.36 loads with 321.91 loads of pork cuts and 18.45 loads of trim. Pork cutout values: down $1.51, $120.34. Tuesday's slaughter is estimated at 474,000 head, 10,000 head more than a week ago and steady with a year ago. The CME Lean Hog Index for July 16: up $0.37, $112.26.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat lower. As packers dove into Tuesday's cash hog market aggressively, they won't move Wednesday's cash hog market higher unless they need hogs for their upcoming kills. As of late, packers have been aggressive on both Tuesday and Wednesday in the cash market, procuring the supplies they need, but have let the market sit idly toward the later half of the week. It's very likely that packers buy again come Wednesday to sure-up inventory.
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