GENERAL COMMENTS:
Both the live cattle and lean hog contracts are starting the week out strong while the feeder cattle market goes to bat with rallying grain prices. On Friday, the cattle market will see a new Cattle on Feed report released, along with the midyear's Cattle Inventory report. December corn is up 12 cents per bushel and December soybean meal is up $5.20. The Dow Jones Industrial Average is up 153.85 points.
LIVE CATTLE:
The live cattle market has started the week off strong with the board supporting a modest rally and boxed beef prices printing higher to start the day off. August live cattle are up $0.45 at $135.37, October live cattle are up $0.72 at $140.27 and December live cattle are up $0.47 at $145.92. As expected, the cash cattle market hasn't seen any interest yet and if packers vaguely support this week's cash market like they have been over the last month, thin volumes and steady to somewhat weaker prices can be expected. Given that we are officially past the halfway point of July, a doggish cash cattle market is expected, so our attention needs to focus on beef demand and throughput.
The majority of last week's trade developed on Wednesday, but every day last week saw a few scattered deals. Southern live trade had a range of $136 to $140, mostly $137, about steady with the prior week's weighted averages. Northern dressed deals had a huge range of $224 to $234, mostly $230, roughly $2 lower than the previous week's weighted average basis Nebraska.
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.
Boxed beef prices are higher: choice up $1.58 ($270.49) and select up $0.31 ($242.10) with a movement of 32 loads (20.77 loads of choice, 5.24 loads of select, 4.34 loads of trim and 1.67 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market is trending lower to start the week off as corn prices keep the market's bull spreaders at bay. With the nearby corn contracts rallying a confident $0.13 to $0.14 higher, the market has drifted lower and even fallen below the recently conquered resistance of $176.00. If the market can't sustain $176 or better, weaker tones could keep the depressed technically. However, as Northern Livestock Video Auction starts the week off with their Summertime Classic Sale, with 125,000 head set to sell, if buyer demand continues to perform like it has over the last month, the contracts could gain enough support to trend steady to somewhat higher. On Friday, the cattle market will see the midyear's Cattle Inventory report and total beef cow numbers are expected to be down 2.5% to 3.5% which would push the nation's herd to its lowest point since 2015. If USDA does indeed report these findings, then the feeder cattle market will likely rally regardless of what corn does. August feeders are down $0.92 at $175.47, September feeders are down $1.42 at $178.25 and October feeders are down $1.30 at $181.15.
LEAN HOGS:
While the cattle contracts drift into Monday's afternoon trading on both sides of steady, the lean hog market isn't wasting precious time as it charges $1.00 to $2.00 higher to start the day off. August lean hogs are up $2.60 at $112.42, October lean hogs are up $2.12 at $94.65 and December lean hogs are up $1.75 at $85.80. The cash hog market hasn't seen much interest but, as we know, packers have been more aggressive, and buyers have come Tuesday and Wednesday as opposed to supporting Monday's market as of late. Thankfully, while the cash market isn't lending any support, the pork cutout values are holding strong. To start the day off midday pork cutout values are up over $1.00 higher, which, even though much can change between the morning's report and closing, higher tones help set the market's morale higher.
The projected lean hog index for July 15 is up $0.74 at $114.89, and the actual index for July 14 is up $0.76 at $114.15. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.70 with a weighted average od $112.59, ranging from $108.00 to $122.50 on 3,455 head and a five-day rolling average of $118.98. Pork cutouts total 189.38 loads with 156.84 loads of pork cuts and 32.54 loads of ground beef. Pork cutout values: up $1.01, $123.19.
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