GENERAL COMMENTS:
Limited interest in cash cattle markets has kept markets quiet through the morning Friday with bids still unavailable, while asking prices are steady with previous levels. It is expected that additional trade is still needed before either side calls it a week, but just how aggressive packers will be is still uncertain. Feeder cattle futures are leading the market higher, with triple-digit gains in nearby contracts, although live cattle contracts are much less aggressive, as narrowly mixed trade has consumed morning activity. Hog markets continue to show market weakness, although expanded trade limits are nowhere in sight during light morning trade. December corn is up 5 cents per bushel and December soybean meal is up $0.90 per ton. The Dow Jones Industrial Average is up 145 points.
LIVE CATTLE
October live cattle are trading down $0.20 at $127.35, as trade activity remains sluggish Friday morning. The focus on potential moves in beef values and attention to developing cash market trade before the weekend seems to have most traders hovering on the sidelines, waiting for more information. Narrow losses in nearby contracts are being offset by light to moderate gains in deferred futures. The focus on gains in early 2022 contracts is fueled by the renewed support in feeder cattle buying Friday as traders are taking a longer view of the market, partially due to the lack of activity and market interest. Following light to moderate trade seen Wednesday in all areas, additional activity remains slow to develop. Given the overall numbers of cattle sold, and procurement needs, it is likely that at more trade will develop through the end of the day Friday. This could become a mid-to-late day event Friday afternoon, as feeders seem unwilling to back away from the midweek gains. With prices generally $1 to $2 per cwt higher than last week, the expectation that live prices will hover near $121 to $122, and dressed prices around $197 to $98 are holding.
Friday morning's boxed beef prices are higher with choice cuts up $3.15 at $295.73 and selects up $2.84 at $276.61 on a total count of 55 loads. Dow Jones estimated Friday's cattle slaughter at 115,000, steady with a week ago. Estimated Saturday runs are listed at 59,000 head.
FEEDER CATTLE
September feeders are trading up $1.05 at $162.20, as renewed buyer support has stepped into the market. End-of-the-week position squaring appears to be the main focus Friday morning as the feeder cattle market has once again become the bright spot of the livestock complex. Despite strong continued gains in corn prices, trades seem to be less spooked about the current feed costs at the end of the week and more focused on long-term feeder cattle supply issues as available market-ready feeder cattle are expected to remain in high demand through the end of the summer and fall. The CME Feeder Cattle Index was priced at $155.80 for Aug. 4.
LEAN HOGS
Follow-through early morning price pressure was obvious across lean hog futures Friday, although traders have slowly become more focused on the potential to regain Thursday's losses as prices remain narrowly mixed in most contracts at midday. Nearby futures still are unable to move higher and could close lower Friday afternoon given the continued pressure in cash hog prices and volatility in pork prices. The wide swings in pork cutout values is adding to the overall market volatility, but the focus on sustained pork demand growth could help to bring longer term stability back into the entire complex. Cutouts were up $5.60 at $128.72 Friday on 207.03 loads, following a nearly $19 per cwt rally in ham cuts. Negotiated hog prices are lower on the National Direct Morning Hog Report, down $2.75 with a weighted average of $99.91. The national weighted average of the Swine/Pork Market Formula is $110.23. Dow Jones estimated Friday's hog slaughter at 455,000, up from 440,000 a week ago. Saturday slaughter is expected at 56,000 head. The CME Lean Hog Index is estimated at $112.48 for Aug. 4.
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