GENERAL COMMENTS:
Thursday's market wasn't anything to holler about as the cattle market absorbed a lousy export report, the livestock futures market closed lower and pork slaughter continues to run lackadaisically. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.97 with a weighted average of $119.45 on 8,358 head. December corn is up 5 3/4 cents per bushel and December soybean meal is up $0.10. The Dow Jones Industrial Average is down 155.17 points.
LIVE CATTLE:
The live cattle market closed lower as it lacked fundamental support from the cash market to keep prices elevated across the board, and after pushing the market higher earlier this week, traders stepped away from the market to let it breathe. August live cattle closed $1.47 lower at $135.40, October live cattle closed $1.35 lower at $139.92 and December live cattle closed $1.35 lower at $146.30. It was interesting to see the day's carcass data, as it confirmed that the industry has seen carcass weights bottom, as steers trended steady with the previous week and heifers gained 4 pounds from the week before. One thing to appreciate about high corn prices is that feedlots aren't as willing to sit on cattle and they work more aggressively to get them moved, so even with carcass weights showing a slight week-over-week increase, supplies should be manageable moving forward given that there won't be as many cattle in the system. The cash cattle market saw a handful of cattle trade but mostly it was all just clean up. Business throughout the week has averaged $137 in the South, and $230 in the North.
Thursday's slaughter is estimated at 123,000 head, 3,000 head less than a week ago and 3,000 head more than a year ago.
Thursday's actual slaughter data shared that for the week ending July 2, steers averaged 883 pounds, which was steady with the week before, and heifers averaged 813 pounds, which is 4pounds more than the week before.
Beef net sales of 9,200 mt for 2022, a marketing-year low, were down 17% from the previous week and 35% from the prior four-week average. The three largest buyers were Japan (3,800 mt), Mexico (2,900 mt) and Canada (900 mt).
Boxed beef prices closed mixed: choice down $0.30 ($267.75) and select up $0.65 ($241.91) with a movement of 110 loads (71.65 loads of choice, 19.60 loads of select, 7.23 loads of trim and 11.72 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. It's unlikely that many cattle sell in Friday's market as packers are seeming to have fulfilled their needs for the week.
FEEDER CATTLE:
The feeder cattle market closed lower by Thursday's end as the market seemed to have run out of technical support by Thursday's arrival. With the live cattle market unable to push higher prices throughout its contracts, and with fat cattle trading steady to $2.00 lower, the feeder cattle market had its own fundamental support to rely upon but nothing else. Even with the day's slightly lower close, that doesn't mean the market's run is over. The fact remains that there will be significantly fewer cattle to sort through in the months ahead and buyers know this. August feeders closed $1.90 lower at $178.90, September feeders closed $1.45 lower at $181.62 and October feeders closed $1.17 lower at $183.82. The unofficial averages of Western Video Market's sale this week shared that steers weighing 500 to 599 pounds averaged $220.12, steers weighing 550 to 599 pounds averaged $208.39, steers weighing 600 to 649 pounds averaged $199.04, steers weighing 650 to 699 pounds averaged $193.66, steers weighing 700 to 749 pounds averaged $188.34 and steers weighing 750 to 799 pounds averaged $182.15. The CME Feeder Cattle Index for July 13: up $1.75, $174.05.
LEAN HOGS:
Thursday's lean hog market ran out of steam with Thursday's arrival, as not only did the futures market trend slightly lower, but the cash market closed lower as well. August lean hogs closed $0.92 lower at $109.57, October lean hogs closed $0.20 lower at $93.35 and December lean hogs closed $0.35 lower at $85.02. The cash hog market has been a driving component of the recent market, as not only have traders looked to pork demand for fundamental cues, but also to whether or not cash prices are demanding a higher price. With the limited number of hogs available to market right now, pork producers have been able to drive the cash market to incredibly high levels as demand throughout the summer has been strong.
Pork cutouts total 273.71 loads with 247.70 loads of pork cuts and 26.00 loads of trim. Pork cutout values: up $0.23, $118.51. Thursday's slaughter is estimated at 453,000 head, 13,000 head less than a week ago and 8,000 head less than a year ago. Thursday's actual slaughter data shared that for the week ending July 2, live hog weights averaged 285 pounds (down 1 pound from the week before) and dressed hog weights averaged 212 pounds (down 1pound from the previous week). The CME Lean Hog Index for July 12: up $0.25, $112.82.
Pork net sales of 18,300 mt for 2022 were down 42% from the previous week and 37% from the prior four-week average. The three largest buyers were Mexico (10,100 mt), Japan (3,400 mt) and China (1,600 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that packers have fulfilled their needs for the week, it's likely that the cash market is lower come Friday and doesn't see much support until next week.
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