GENERAL COMMENTS:
October live cattle and September feeders are a little higher early Wednesday, still getting a break from Tuesday's lower grain closes, while the market waits for cash trade to develop. December corn is down 3 cents per bushel and December soybean meal is up $5.50. The Dow Jones Industrial Average is down 225 points.
LIVE CATTLE:
October live cattle are trading up $1.05 at $129.20, staying well supported on the board with drought-related liquidation helping keep traders optimistic toward fall. Light trade has been noted at $198 in the North, $1 higher than last week. Earlier Wednesday, asking prices were at $122 in the South and $199-plus in the North.
This week's higher boxed beef prices also give trader expectations a more bullish tone, at least theoretically. The rub is that there has only been a little evidence recently of willingness on the packer side to increase boxed beef loads to market and the slaughter pace remains flat. Wednesday morning's boxed beef prices are higher again with choice cuts up $2.90 at $288.74 and selects up $2.60 at $270.09 on a total count of 95 loads. Dow Jones estimated Wednesday's cattle slaughter at 120,000, up from 119,000 a week ago.
The Fed Cattle Exchange Auction Wednesday listed a total of 6,078 head, of which 1,393 actually sold and 4,685 head were listed as unsold as they did not meet the reserve prices, which ranged from $118 to $123. Opening prices ranged from $118 to $119, high bids ranged from $118 to $122. The state-by-state breakdown looks like this: Texas 5,897 total head, with 1,393 head sold at $118 to $122, and 4,504 head went unsold; Kansas 181 total head, all of which went unsold.
FEEDER CATTLE:
September feeders are trading up $0.52 at $163.05, while December corn is down 9 1/2 cents. Cash corn bids averaged $6.20 across the Midwest Tuesday, a stubbornly high price that reflects tighter than usual supplies and strong domestic demand. Despite the hurdle of higher feed costs, September feeders are trading at their highest prices in over five years, helped by a more active economy in 2021 and strong demand for beef that has slowly been making its way to producers. The CME Feeder Index was priced at $156.15 for August 2.
LEAN HOGS:
October lean hogs are trading down $0.40 Wednesday at $90.97, showing no strong sign of direction ahead of Thursday's weekly export sales report. Last week's export sales of pork were decent at 38,500 metric tons (mt), but China was absent from the list of top buyers. By all indications, China's pork herd is back near pre-African swine fever (ASF) levels and hog prices in China have fallen back to near pre-ASF levels. That is not to say ASF is eradicated. The U.S. should continue to benefit from China's ban on German pork and the healthy status of pork here in the U.S. Pork prices are also finding support from higher pork carcass values this week. Cutouts were down $1.28 at $126.39 Wednesday on 196.58 loads, still up over two dollars since Friday afternoon. Negotiated hog prices are slightly higher on the National Direct Morning Hog Report, up $0.14 with a weighted average of $100.59. The national weighted average of the Swine/Pork Market Formula is $110.92. Dow Jones estimated Wednesday's hog slaughter at 473,000, up from 470,000 a week ago. The CME Lean Hog Index is estimated at $111.59 for Aug. 2.
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