GENERAL COMMENTS:
The live cattle and lean hog contracts rounded out the day lower upon being pressured from the market's sorry export report. The feeder cattle market struggled with its own pressure of higher corn prices which also led its market to a lower close too. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.00 with a weighted average of $118.72 and on 6,682 head. December corn is up 27 1/4 cents per bushel and December soybean meal is up $11.90. The Dow Jones Industrial Average is down 46.40 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle off $0.65, October live cattle off $1.02; August feeder cattle odd $2.78, September feeder cattle off $2.93; July lean hogs up $3.25, August lean hogs up $6.20; July corn up $0.24, September corn up $0.14.
LIVE CATTLE:
The live cattle market came up short this past week as even though the market's price spreads in the cash market showed that some cattle sold higher than a week ago, the market's weighted averages came in slightly lower than last week and on a thin movement. Throughout the week, in the Northern Plains, live cattle traded for $145 to $150 and dressed Northern cattle sold for $230 to $234, and Southern live cattle traded for $137 -- all prices coming in steady to about $1.00 lower than last week. Monday's official reports will catch any late trade, but through Friday only 58,000 head of cattle have traded in the cash market. With packers having cattle surrounding them for the weeks ahead, their need to dive into the cash market was thin and that could be next week's tone too. Upon receiving the market's lousy export report, the nearby live cattle contracts sank lower, and the market rounded out the week mixed. August live cattle closed $0.60 lower at $133.95, October live cattle closed $0.90 lower at $138.95 and December live cattle closed $0.40 lower at $145.07.
Friday's slaughter is estimated at 125,000 head, 4,000 head more than a week and year ago. Saturday's slaughter is projected to be around 88,000 head. This week's slaughter is estimated at 593,000 head on the holiday shorted week.
Beef net sales of 11,000 mt for 2022 were down 35% from the previous week and 30% from the prior four-week average. The three largest buyers were Japan (6,300 mt), South Korea (1,700 mt) and Canada (1,100 mt).
Boxed beef prices closed lower: choice down $0.18 ($267.89) and select down $0.73 ($241.85) with a movement of 91 loads (45.07 loads of choice, 23.28 loads of select, 11.03 loads of trim and 11.43 loads of ground beef). Throughout the week choice cuts averaged $267.17 (up $1.46 from last week) and select cuts averaged $241.81 (down $0.27 from last week) and with a total movement of cuts, grinds and trim totaling 446 loads.
MONDAY'S CASH CATTLE CALL: Steady to $1.00/$2.00 lower. The big influencer of the cash cattle market's success/demise in July will be throughput. Monitoring processing speeds will help determine how many cattle packers need, but given that this past week they weren't very active in the cash market, next week's trade could be depressed too.
FEEDER CATTLE:
The $0.19 to $0.31 gain in the corn market ahead of Friday's close took the wind right out the feeder cattle contracts. The big question heading into next week's trade for the feeder cattle market is: How much upside does the corn market possess? Is this a head fake or will the market continue to pull itself higher? Time will tell, but parts of the Corn Belt are in desperate need for moisture in order to grow up the new corn crop. August feeders closed $0.75 lower at $171.72, September feeders closed $1.32 lower at $174.72 and October feeders closed $1.57 lower at $177.75. Next week Superior will host their Week in the Rockies sale where close to 50,000 head will trade, which will give the market another good test of what feeder cattle prices will be this fall. But from how the CME feeder cattle index closed, you can tell that there's hot demand in the feeder cattle market and that buyers are soberly realizing that the numbers they've grown used to being in the market in recent years aren't going to be around this year. The CME Feeder Cattle Index for July 7: up $5.49, $168.39.
LEAN HOGS:
The lean hog complex saw gains throughout the day's end in its deferred contracts, but the market's nearby contracts suffered as the spread of African swine fever continues after being detected in Lower Saxony and as the contracts faced a less than exciting export report. Even with the market's pressures, it was supportive to see pork cutout values close higher as that could help propel the market to a strong start next week. Given the big advancements made this past week in the lean hog market, support from consumers and packer interest in the cash market are going to have to work fluidly in order to sustain these prices. The largest traded August contract is up against resistance pressure at $110 and will have to determine how much more upside the market possess next week. Pork cutouts totaled 304.32 loads with 277.03 loads of pork cuts and 27.29 loads of trim. Pork cutout values: up $2.34, $114.53. Friday's slaughter is estimated 468,000 head -- 33,000 head more than a week ago and 6,000 head more than a year ago. Saturday's slaughter is projected to be around 118,000 head. The CME Lean Hog Index for July 6: up $0.23, $110.16.
Pork net sales of 31,200 mt for 2022 were down 3% from the previous week, but up 23% from the prior four-week average. The three largest buyers were Mexico (16,200 mt), China (11,400 mt) and Japan (1,100 mt).
MONDAY'S CASH HOG CALL: Steady. After this week powerhouse performance in the cash market, next week's cash market could be slow to develop.
No comments:
Post a Comment