GENERAL COMMENTS:
Even with relatively supportive export news, the livestock complex is having a tough time rallying even slightly higher. With the cash cattle market not seeing any support and boxed beef prices lower, the live cattle market is struggling and the feeder cattle market isn't doing much better with corn pushing a minor rally. December corn is up 14 1/4 cents per bushel and December soybean meal is down $7.90. The Dow Jones Industrial Average is up 232.35 points.
LIVE CATTLE:
The live cattle market is having a lackluster day as the market looks at a weakened futures complex, lower boxed beef prices and a thinly traded cash market. August live cattle are down $0.57 at $136.22, October live cattle are down $0.52 at $141.80 and December live cattle are down $0.40 at $147.77. Until the cash cattle market can possess more of the market's leverage when supplies become thin, the market could continue to see this type of doggish attitude. The countryside hasn't seen any renewed support and it's looking like packers aren't going to buy very many cattle again this week. With their ability to avoid buying cattle through the cash market with formula deals and alternative marketing agreements, it's hard for the cash cattle market to gain any momentum when supplies are plentiful. So far this week, a light trade has taken place in most areas with Northern dressed deals marked at mostly $225, $2 lower than last week's weighted average basis Nebraska. Southern live business has been marked at mostly $135, $1 lower than last week's weighted averages.
Beef net sales of 25,300 mt for 2022 were up 6% from the previous week and 66% from the prior four-week average. The three largest buyers were South Korea (7,900 mt), Japan (7,000 mt) and China (3,100 mt).
Boxed beef prices are lower: choice down $0.42 ($267.57) and select down $1.34 ($240.47) with a movement of 48 loads (36.50 loads of choice, 8.79 loads of select, zero loads of trim and 2.98 loads of ground beef).
FEEDER CATTLE:
Throughout Wednesday's market, when the corn market was only pushing a mild rally, the feeder cattle complex felt strong enough to overlook its slight uptick in price. However, as the corn market rallies $0.11 to $0.12 higher into Thursday's afternoon, the feeder cattle market has again fallen lower to the pressure. August feeder cattle are down $1.62 at $177.47, September feeders are down $1.42 at $180.42 and October feeders are down $1.40 at $183.07. With the live cattle market lending no support and the corn complex unlikely to weaken ahead of the day's close -- feeders will likely round out the day lower and could be pressured come Friday despite the market still seeing excellent support in sales throughout the countryside.
LEAN HOGS:
The lean hog complex is seeing modest support for its nearby contracts while the rest of the market drifts slightly lower. August lean hogs are up $0.85 at $119.42, October lean hogs are up $0.15 at $96.60 and December lean hogs are down $0.17 at $87.20. With pork cutout values holding strong and consumer demand helping keep the market elevated, the nearby contracts aren't worried about the cash market's drastic cut back given that the nature of the cash market has become so volatile. China wasn't listed as one of the more aggressive buyers in this week's export report, as they only bought 800 mt of pork, but given that China has been able to rebuild their domestic hog herd, it's expected that their need of U.S. won't be as great, but Mexico has been an aggressive buyer for U.S. pork this past year.
The projected lean hog index for July 27 is up $0.85 at $120.58, and the actual index for July 26 is up $0.25 at $119.73. Hog prices are lower on the Daily Direct Morning Hog Report, down $11.20 with a weighted average of $117.86, ranging from $115.00 to $130.00 on 3,901 head and a five-day rolling average of $123.60. Pork cutouts totaled 89.49 loads wit 68.70 loads of pork cuts and 20.79 loads of trim. Pork cutout values: up $2.16, $128.95.
Pork net sales of 21,600 mt for 2022 were up 5% from the previous week, but down 16% from the prior four-week average. The three largest buyers were Mexico (13,100 mt), Japan (3,500 mt) and Canada (1,300 mt).
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