GENERAL COMMENTS:
It was a strong day for the livestock complex as both the live cattle and lean hog contracts were able to round out the day higher, while the feeder cattle market traipsed lower thanks to an uptick in the corn market. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.17 with a weighted average of $120.72 and on 8,615 head. December corn is up 11 1/4 cents per bushel and December soybean meal is up $12.30. The Dow Jones Industrial Average is up 297.38 points.
LIVE CATTLE:
It's not often in today's market that thousands of cattle feeders can unite and work together in different regions, different states and when selling different types of cattle to outlast and play the upper hand against packers in today's cash cattle market. But after going through two years of having little to no leverage and understanding how important it is to capitalize on an opportunity whenever given the chance -- feedlots resisted the urge to sell cattle early in the week and it paid off. In the Southern plains cattle traded for $137 to $140 which is steady to $2.00 higher, and in the North dressed for $147 to $151, and $232 to $240 dressed. Thankfully the board's slightly higher tone helped give feedlots a little more confidence and it didn't hurt that choice cuts trended higher all throughout the day too. August live cattle closed $0.05 higher at $134.55, October live cattle traded $0.10 lower at $139.85 and December live cattle closed $0.12 higher at $145.47. Thursday's slaughter is estimated at 126,000 head - 2,000 head more than a week ago and 6,000 head more than a year ago.
Thursday's actual slaughter data shared that for the week ending 6/25/2022 steers averaged 883 pounds which was four pounds more than a week ago and steady with a year ago. And for the same week heifers averaged 809 pounds which was a pound less than a week ago and three less than a year ago.
Boxed beef prices closed mixed: choice up $0.02 ($268.07) and select down $0.35 ($242.58) with a movement of 125 loads (70.79 loads of choice, 29.97 loads of select, 7.81 loads of trim and 16.89 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions, it's likely that the week's trend holds steady with what's already been established.
FEEDER CATTLE:
As the corn market closed $0.05 to $0.11 higher, the feeder cattle contracts pointed South and set their sail lower for the day. August feeders closed $0.82 lower at $172.47, September feeders closed $1.02 lower at $176.05 and October feeders closed $1.05 lower at $179.32. Even with the day's lower close the complex stayed well within its sideways trading range and fundamentally the complex was still supported as buyers hit sales aggressively. At OKC West Livestock Auction in El Reno, Oklahoma compared to last week feeder steers and heifers were lightly tested but cattle traded $4.00 to $6.00 higher than a week ago. The CME feeder cattle index 7/6/2022: down $2.18, $162.90.
LEAN HOGS:
The lean hog market has had a stellar week and Thursday's performance only helped strengthen the market's move. Not only did the contracts all close higher, but the cash market saw another sizeable volume trade and pork cutout values rounded out the day higher. As the market comes up against resistance at $110.00, traders will continue to look at the market's fundamentals as they decide whether they can push above the plane or not. Restocking throughout the retail market makes sense given that it's the week after the 4th of July -- the market's true consumer support will be tested in the weeks ahead when shelves are restocked. July lean hogs closed $0.10 higher at $113.25, August lean hogs closed $0.30 higher at $109.50 and October lean hogs closed $1.75 higher at $93.97. Pork cutouts total 286.59 loads with 258.51 loads of pork cuts and 28.08 loads of trim. Pork cutout values: up $0.69, $112.19. Thursday's slaughter is estimated at 466,000 head -- 3,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index 7/5/2022: up $0.65, $109.93.
Thursday's actual slaughter data shared that for the week ending 6/25/2022 live carcasses averaged 286 pounds (down two pounds from the previous week) and dressed weights averaged 213 pounds (down two pounds from the week before).
FRIDAY'S CASH HOG CALL: Steady to somewhat lower. Given that the market's seen big pushes throughout the week in the cash market not only in price but also in volumes traded, it's likely that Friday's market sees some support but both prices and volumes could be lower as packers were aggressive earlier.
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