GENERAL COMMENTS:
The feeder cattle market ran into resistance, the live cattle market saw cash cattle trade steady and the lean hog market continues to chop sideways. Largely, Wednesday's trade wasn't what the livestock complex had hoped for. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.68 on 6,244 head, and a five-day rolling average of $109.75. December corn is down 8 3/4 cents per bushel and December soybean meal is up $2.50. The Dow Jones Industrial Average is up 104.42 points and NASDAQ is up 1.42 points.
LIVE CATTLE:
In a tug-of-war battle, packers pulled harder this week and are going to be able to hold the cash cattle market at steady. With what they've been able to buy in the cash cattle market in the 15- to 30-day delivery period, they've built up cushion in the market and this is allowing them to avoid fully supporting the cash cattle market at any given week. There was a moderate movement of cattle that sold Wednesday with live cattle selling for mostly $120 to $122 and Northern dressed cattle selling for $198. The board tumbled lower upon realizing that the market wasn't going to be able to demand anything but steady prices, and with boxed beef prices waning lower, the futures market plummeted as well. August live cattle closed $1.80 lower at $120.60, October live cattle closed $1.45 lower at $126.70 and December live cattle closed $1.07 lower at $131.47. Wednesday's slaughter is estimated at 120,000 head, steady with a week ago and 2,000 head more than a year ago. Tuesday's cattle slaughter is estimated at 119,000 head, 3,000-head less than what was originally stated.
Boxed beef prices closed lower: choice down $1.78 ($284.90) and select down $1.23 ($262.08) with a movement of 158 loads (86.18 loads of choice, 44.88 loads of select, 15.68 loads of trim and 11.26 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. With cattle traded in both the North and the South, it's most likely that prices will stay within the week's trend.
FEEDER CATTLE:
A combination of technical resistance and the inability for the cash cattle market to move higher were the biggest hinderances on the feeder cattle market's ability to scale higher. The corn market closed mostly lower and it's not likely that the corn complex will trend higher this week with large accumulations of rain expected to fall across the Midwest this week. But even with the cost of gains trending lower, the feeder cattle market could fight the market's resistance at $160. August feeders closed $1.62 lower at $159.00, September feeders closed $1.20 lower at $162.52 and October feeders closed $1.15 lower at $163.50. At Winter Livestock in Dodge City, Kansas, compared to two weeks ago, feeder steers weighing 525 to 900 pounds sold $2.00 to $3.00 higher. Heifers weighing 525 to 850 pounds sold $2.00 to $3.00 higher as well. There wasn't a recent comparison on steer or heifer calves, but both sold with strong undertones. Slaughter cows sold steady to $1.00 higher and slaughter bulls sold $4.00 higher. The CME Feeder Cattle Index for July 6: down $0.63, $145.72.
LEAN HOGS:
The lean hog market continues to chop sideways, finding mixed signals day in and day out from the market's fundamentals. Both cash hog prices and the afternoon pork cutout values were able to close higher, but just because one day closes higher doesn't mean that traders are going to jump on the bandwagon and believe the market has found a bottom. July lean hogs closed $0.77 lower at $109.15, August lean hogs closed $1.95 lower at $100.40 and October lean hogs closed $0.72 lower at $83.72. Looking to Thursday the market could be pressured by another dismal export report. Pork cutouts total 278.48 loads with 245.80 loads of pork cuts and 32.68 loads of trim. Pork cutout values: up $2.13, $115.74. Wednesday's slaughter is estimated at 467,000 head, 3,000 head more than a week ago and steady with a year ago. The CME Lean Hog Index for July 5: down $0.45, $110.81.
THURSDAY'S CASH HOG CALL: Steady to somewhat lower. With Canadian hogs being readily available and the market processing less than 470,000 head a day at times, it's unlikely that packers are going to get aggressive in the cash market.
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