GENERAL COMMENTS:
The livestock contracts are having a strong day as the live cattle, feeder cattle and lean hog contracts all rally into Wednesday's afternoon trade. The biggest disappointment is seeing that cash cattle in Kansas are selling for $1.00 lower but with packers having ample supplies of cattle committed for the weeks ahead, we knew that pressure loomed over the cash market. December corn is up 2 3/4 cents per bushel and December soybean meal is up $5.40. The Dow Jones Industrial Average is up 253.14 points and NASDAQ is up 87.70 points.
LIVE CATTLE
It's hard not to put the cart in front of the horse and celebrate seeing higher boxed beef prices, but the market is far from a bottom. Thankfully, these higher boxed beef prices do show that consumer demand is still thriving throughout the market and should continue to encourage packers to keep running these moderate kill speeds ,which will lessen the chance of supplies backing up in the feedlot sector. August live cattle are up $0.45 at $120.22, October live cattle are up $0.55 at $125.25 and December live cattle are up $0.62 at $131.05. Largely, the cash cattle market hasn't seen a lot of attention thus far as the only cattle that have traded have been in Kansas and they sold for $119, which is $1.00 lower than last week's average. Asking prices in the South are pinned at $120 plus and in the North at $200 plus.
The Fed Cattle Exchange Auction listed a total of 3,367 head, of which 426 actually sold, 426 were scratched from the auction and 2,037 head were listed as unsold, as they did not meet the reserve prices that ranged from $118 to $124. Opening prices ranged from $118, high bids ranged from $119. The state-by-state breakdown looks like this: Texas 2,889 total head, with 426 head sold at $119, 2,037 head unsold and 426 were scratched from the auction; Kansas 417 total head, all of which went unsold; Oklahoma 61 total head, all of which sold at $119.
Boxed beef prices are higher: choice up $1.07 ($265.95) and select up $0.99 ($249.57) with a movement of 84 loads (39.13 loads of choice, 22.93 loads of select, 7.09 loads of trim and 14.43 loads of ground beef).
FEEDER CATTLE
The feeder cattle market has caught a break as the corn market is trading mostly steady. August feeders are up $0.97 at $156.50, September feeders are up $1.25 at $159.02 and October feeders are up $1.15 at $160.92. Thankfully, the market's higher swing is allowing the complex to trade above the 100-day moving average as the feeder cattle market finds support in the live cattle market's slightly higher trade and continued buying aggression from calf/feeder buyers. Watching how the spring contracts of 2022 perform will continue to be an influencing factor for this year's calf market as feedlots have seen enough fat cattle trade at $120 this past year and desperately hope that $130 is achievable in 2022.
LEAN HOGS
The lean hog market is having another rallying day as the market has seen demand follow through and faces no immediate pressure on the board. August lean hogs are up $1.17 at $106.17, October lean hogs are up $1.10 at $92.12 and December lean hogs are up $0.65 at $85.17. As the market looks to Thursday and what it may bring, monitoring exports regarding sheer volume and who is buying verses who isn't will be incredibly insightful. With China publicly announcing on Tuesday that they have indeed had 11 outbreaks of African swine fever over the last year, it makes one wonder if they will be more apt to buying U.S. pork in the weeks ahead now that that information is aired.
The projected CME Lean Hog Index for July 20 is up $0.02 at $112.35 and the actual index for July 19 is up $0.07 at $112.33. Hog prices are lower on the National Direct Morning Hog Report, down $0.71 with a weighted average of $106.36, ranging from $104.50 to $110.00 on 4,220 head and a five-day rolling average of $106.88. Pork cutouts total 129.68 loads with 114.44 loads of pork cuts and 15.24 loads of trim. Pork cutout values: up $2.83, $123.17.
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