GENERAL COMMENTS:
Thursday's trade didn't amount to much for the livestock complex, especially for both the live cattle and lean hog contracts. The feeder cattle market was able to close slightly higher as corn prices keep waning lower. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.98 with a weighted average of $124.71 on 12,932 head. December corn is down 16 1/2 cents per bushel and December soybean meal is down $5.70. The Dow Jones Industrial Average is up 162.06 points.
LIVE CATTLE:
The live cattle market didn't do much through Thursday's market as everyone seems to be holding their cards close to their chest until they can see Friday's USDA reports -- the Cattle on Feed data and the Cattle Inventory report. Usually, the Cattle on Feed report doesn't bring the market much good news, but this Friday is likely to be different than most months, especially when you consider that the Inventory report should be extremely bullish as beef cow numbers will be significantly lower. Regardless, time passed by slowly for the live cattle market on Thursday and even with the supportive export report, the contracts closed lower. August live cattle closed $0.02 lower at $135.72, October live cattle closed $0.35 lower at $140.97 and December live cattle closed $0.50 lower at $146.32. Throughout the day, there was a little more cash cattle trade in the South, but prices held steady with the week's trend. Thus far throughout the week, Southern live trade has been marked at $136, roughly $0.50 to $1 lower than last week's weighted average. Dressed deals in the North have been marked at mostly $227, $2 lower than last week's weighted averages. Thursday's slaughter is estimated at 123,000 head - steady with a week ago and 2,000 head more than a year ago.
Thursday's actual slaughter data share that for the week ending 7/9/2022 steers averaged 890 pounds, which is 7 pounds more than a week ago and 5 pounds more than a year ago. For the same week heifers averaged 814 pounds, which is 1 pound more than a week ago but 2 pounds more than a year ago.
Beef net sales of 23,800 mt for 2022 were up noticeably from the previous week and up 97% from the prior four-week average. The three largest buyers were South Korea (7,700 mt), Japan (5,800 mt) and China (3,100 mt).
Boxed beef prices closed lower: choice down $2.77 ($267.67) and select down $1.72 ($240.53) with a movement of 105 loads (60.73 loads of choice, 19.02 loads of select, 7.20 loads of trim and 17.85 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Given that trade has happened in both regions, clean-up trade that develops on Friday will likely be for steady money.
FEEDER CATTLE:
The feeder cattle grew stronger as the day traded on, and even though the market thought about testing the breakout plane of $176, traders jumped back in the market and prices grew above that level ahead of closing. The feeder cattle market is anxiously awaiting both the USDA Cattle on Feed and Cattle Inventory report, which will be released Friday afternoon as both are expected to be bullish for the market and especially so for the feeder cattle complex. With the anticipation of lighter placements and higher marketings for June's COF report, and fewer beef cows on the Inventory report -- feeder cattle prices could catch another head of steam and run higher. August feeders closed $0.45 higher at $178.27, September feeders closed $0.32 higher at $181.30 and October feeders closed $0.47 higher at $184.22. The CME Feeder Cattle Index for July 20: down $1.75, $170.67.
LEAN HOGS:
The lean hog contracts rounded out Thursday's trade mostly lower, but the August 2022 contract held onto its support as high cash prices are supporting the nearby market. August lean hogs closed $1.42 higher at $116.30, October lean hogs closed $0.25 lower at $95.77 and December lean hogs closed $0.62 lower at $86.22. It didn't come as a surprise that cash prices closed lower following Wednesday's aggressive push, but it is still noteworthy that close to 13,000 head traded, and even though the day's close was lower, prices are still high compared to the industry's norm. It was a disappointing to see pork cutout values close lower, which was mainly led lower by the rib as it dropped $13.88. Pork cutouts total 276.08 loads with 248.74 loads of pork cuts and 27.34 loads of trim. Pork cutout values: down $0.47, $123.90. Thursday's slaughter is estimated at 428,000 head, 25,000 head less than a week ago and 47,000 head less than a year ago. The CME Lean Hog Index for July 19: up $0.46, $116.37.
Thursday's actual slaughter data shared that, for the week ending July 9, live hogs averaged 285 pounds, which was steady with the previous week but dressed weighted averaged 213 pounds, which was 1 pound more than a week ago.
Pork net sales of 20,600 mt for 2022 were up 13% from the previous week, but down 23% from the prior four-week average. The three largest buyers were Mexico (10,500 mt), Japan (2,600 mt) and China (2,500 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that packers have been active for two days this week in the market already, it's very unlikely that they pay much attention to Friday's cash hog trade at all.
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