GENERAL COMMENTS:
The feeder cattle contracts are rallying amid the corn market tumbling, but the live cattle and lean hog contracts haven't found the fundamental support their markets need in order to trade higher. The market is anxiously waiting to see where bids and asking prices in this week's cash cattle market are going to land. Asking prices for the South could be noted by Tuesday afternoon or by Wednesday morning. December corn is down 40 cents per bushel and December soybean meal is down $24.70. The Dow Jones Industrial Average is down 364.19 points and NASDAQ is down 79.68 points.
LIVE CATTLE
The live cattle market is trailing modestly lower as the market hunts for discernment. It's never a good idea to read too much into the midday boxed beef values, but if the market's afternoon prices are able to print mixed and buying demand is strong throughout the week, then positive accolades could float throughout the market. The live cattle contracts are simply waiting to see how the market's fundamentals pan out before they do much of anything. August live cattle are down $0.72 at $121.27, October live cattle are down $0.85 at $127.25 and December live cattle are down $0.72 at $132.05. After two weeks of odd cash cattle trade due to the short buying two weeks ago and the holiday disruption last week, the cash cattle market desperately needs to see a week of significant movement. Showlists this week are fully higher in Texas, and are somewhat higher in Kansas, Nebraska and Colorado. Asking prices have yet to surface but it's likely that they will be noted in the South by Tuesday afternoon.
Boxed beef prices are mixed: choice up $2.90 ($288.34) and select down $0.46 ($263.95) with a movement of 52 loads (28.83 loads of choice, 8.65 loads of select, 7.86 loads of trim and 7.02 loads of ground beef).
FEEDER CATTLE
With the corn market taking a royal beating Tuesday morning (falling anywhere from $0.30 to $0.48 lower), the feeder cattle contracts are taking the day's opportunity with stride. August feeders are up $2.42 at $159.47, September feeders are up $2.20 at $161.62 and October feeders are up $2.05 at $163.52. Upon chopping sideways most of last week, the market was itching for the Fourth of July to pass and to see what potential lied ahead in the weeks to come. Buyer demand has been strong throughout the countryside, and with the corn market deteriorating even more, buyers can get comfortable with the market as concerns about their daily cost of gains become manageable.
LEAN HOGS
The lean hog contracts are finding adequate support in the market's nearby contracts, but the deferred contracts aren't as appealing to traders Tuesday morning. July lean hogs are up $0.97 at $109.62, August lean hogs are up $1.97 at $102.20 and October lean hogs are down $0.20 at $84.50. Monday's slaughter is projected to be around 471,000 head, which is a lukewarm kill coming back from the long holiday weekend. As retailers and the food-service industry assess their pork needs early this week, it will be interesting to see how pork cutout values react and to see if packers end up running swifter speeds.
The projected CME Lean Hog Index for July 1 is down $0.51 at $111.26, and the actual index for June 30 is down $0.41 at $111.77. There is not comparison on the National Direct Morning Hog Report for hog prices, but as of Monday morning, there have been 4,162 head sold with a weighted average of $110.06, ranging from $107.00 to $117.00 and a five-day rolling average of $109.24. Pork cutouts total 155.79 loads with 134.53 loads of pork cuts and 21.25 loads of trim. Pork cutout values: up $1.23, $116.42.
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