GENERAL COMMENTS:
Monday's market has come with a bit of a "turn of events" theme. To start the day, the cattle market was weak, but the hog complex was still trending steady to slightly higher with last week's rally. But as the day progressed, traders have shifted their attention from the hog complex to the cattle contracts and are helping both the live cattle and feeder cattle futures trend higher even as the corn contracts are rallying. December corn is up 4 1/2 cents per bushel and December soybean meal is down $1.40. The Dow Jones Industrial Average is down 152.20 points.
LIVE CATTLE:
Live cattle futures saw a rocky start, but as noon approached the market gained substantial strength and is now trending higher. August live cattle are up $1.92 higher at $135.85, October live cattle are up $1.25 at $140.20 and December live cattle are up $1.15 at $146.22. It's supportive that boxed beef prices are higher and that, even with last week being a shortened holiday week, slaughter speeds still ran aggressively, and that beef demand was strong. The weak links in this week's market will likely be that the board is still trading discount to cash, which limits its upside potential, and temperatures are on the rise. With the forecast expected to be hotter, feedlots may deem it smarter to sell cattle and avoid carrying them longer in this heat.
Last week's negotiated cash cattle trade totaled 71,515 head. Of that 68% (48,490 head) were committed for nearby delivery, while the remaining 32% (23,025 head) were committed for deferred delivery.
Boxed beef prices are higher: choice up $1.00 ($268.89) and select up $2.34 ($244.19) with a movement of 57 loads (33.73 loads of choice, 6.28 loads of select, 11.30 loads of trim and 6.17 loads of ground beef).
FEEDER CATTLE:
Even with corn futures rallying 8- to 10-cents nearby contracts, the feeder cattle market is rallying as demand is stellar for feeders throughout the countryside. The market sits in a peculiar position right now as it seems to be torn by two different realities. The first is of the bearish nearby concern of drought, high inputs, and a rallying corn market. But one simply cannot deny the long-term bullish trajectory that the market possesses as it faces a significant decrease in beef-cow numbers which will drive the price of both feeders and calves higher. Nevertheless, this week will be significant for the market as Superior hosts their Week in the Rockies sale where 206,370 head will sell and give the market a great insight as to what prices could be this fall/winter. August feeders are up $2.50 at $174.22, September feeders are up $1.92 at $176.65 and October feeders are up $1.65 at $179.40.
LEAN HOGS:
The lean hog market took a sharp turn for weaker prices as the day's data developed and fundamental support came up short. August lean hogs are down $1.32 at $107.85, October lean hogs are down $0.82 at $93.12 and December lean hogs are down $0.47 at $85.27. With both cash prices and pork cutout values printing lower on the midday report, the market's resistance at $110.00 looks too big and daunting for the market to take on by itself. As the week progresses, monitoring pork demand and processing speeds will be essential and telling as to how prices could trend throughout the latter half of the week.
The projected CME Lean Hog Index for 7/8/2022 is up $0.81 at $111.77, and the actual index for 7/7/2022 is up $0.81 at $110.97. Hog prices are lower on the Daily Direct Morning Hog Report, down $4.51 with a weighted average of $114.07, ranging from $112.00 to $123.00 on 4,154 head and a five-day rolling average of $118.54. Pork cutouts total 189.97 loads with 154.96 loads of pork cuts and 35.01 loads of trim. Pork cutout values: down $1.78 at $112.89.
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