GENERAL COMMENTS:
Monday's market was mostly supportive for the livestock complex as the contracts walked away with a mostly higher close. Come Tuesday, the feeder cattle market will be keenly watching corn prices and the hog complex will be eyeing the cash market and pork demand. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $5.52 with a weighted average of $112.47 on 3,603 head. December corn is up 7 cents per bushel and December soybean meal is up $4.30. The Dow Jones Industrial Average is down 215.65 points.
LIVE CATTLE:
The live cattle contracts powered through Monday, pushing the market back above Friday's weaker close and just $0.04 shy of meeting the market's 100-day moving average. If the complex can keep this stronger tone, the cash cattle market may be capable of holding prices steady, especially if beef demand keeps strong. August live cattle closed $0.70 higher at $135.62, October live cattle closed $1.05 higher at $140.60 and December live cattle closed $0.72 higher at $146.15. The cash cattle market didn't see much develop throughout Monday's hours, but, by Tuesday, the South's asking prices should be known and trade could begin to develop by Wednesday. As packers have positioned themselves wisely with cattle committed with time, a steady cash cattle market is likely the best this week's market can offer. Monitoring beef demand and throughput remain the market's biggest focus. New showlists appear to be mixed higher in Texas, and Nebraska/Colorado but lower in Kansas.
Last week's negotiated cash cattle trade totaled 85,183 head. Of that 71% (85,183 head) were committed for the nearby delivery, while the remaining 29% (24,917 head) were committee for the deferred delivery.
Monday's slaughter is estimated at 125,000 head, steady with a week ago and 9,000 head more than a year ago. Friday's slaughter was revised to 120,000 head, which puts last week's slaughter total to 674,000 head.
Boxed beef prices closed higher: choice up $1.64 ($270.55) and select up $0.87 ($242.66) with a movement of 67 loads (35.24 loads of choice, 13.83 loads of select, 13.15 loads of trim and 4.39 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $2.00 lower. Given that packers have cattle committed with time, it's likely that the cash market trades steady to somewhat lower as packers pull on their committed supplies to avoid the cash market.
FEEDER CATTLE:
The spot August feeder cattle contract closed above the market's resistance of $176.00, which was significant for the market's long-term upside potential. With corn prices pressuring the market throughout the day, and high temperatures noted throughout most of the country this week, the market had plenty of concerns to juggle. Nevertheless, with the live cattle market's support, the feeder cattle complex skated through Monday's market to a slightly higher close. August feeders closed $0.32 higher at $176.67, September feeders closed $0.25 lower at $179.42, October feeders closed $0.12 lower at $182.32, and from there on through 2023 the contracts added anywhere from $0.32 to $0.67 to their contracts. At Joplin Regional Stockyard's midsession point, compared to last week, feeder steers and heifers were trading steady to $3.00 higher. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, at their midsession point feeder steers were trending $4.00 to $7.00 lower and feeder heifers were trading unevenly steady. Steer and heifer calves were selling $3.00 to $5.00 lower. With Oklahoma expected to have extreme heat over the next week, the market was pressured from weather concerns and because of the corn market's higher tone throughout the day. The CME Feeder Cattle Index for July 15: up $0.05, $172.67.
LEAN HOGS:
Even with a slightly lower close in pork cutout values and lousy cash market, the lean hog contracts rallied into Monday's close with tremendous support. August lean hogs closed $2.30 higher at $112.12, October lean hogs closed $1.77 higher at $94.37 and December lean hogs closed $1.67 higher at $85.72. Come Tuesday, the lean hog complex should see more cash interest and the market is crossing its fingers that demand shows more support. Monday's pork cutout close was all over the place as bellies closed $10.64 higher, but with a $5.95 drop in butts, a $4.52 drop in ribs, a $3.60 drop in hams and a $2.35 drop in the loin, the scales tipped to favor a lower close for the day. Pork cutouts total 309.19 loads with 266.10 loads of pork cuts and 43.09 loads of trim. Pork cutout values: down $0.22, $121.96. Monday's slaughter is estimated 449,000 head, 10,000 head more than a week ago and 9,000 head less than a year ago. The CME Lean Hog Index for July 14: up $0.76, $114.15.
TUESDAY'S CASH HOG CALL: Higher. Given that Monday's market was significantly lower in price, and that so few of hogs traded, both the market's price and volume should be greater come Tuesday.
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