GENERAL COMMENTS:
It was a dull and doggish day for the livestock complex as the market saw little fundamental support and traders kept a safe distance from the livestock contracts. It's likely that this lower/anxious tone keeps with the market until it's known exactly how much higher interest rates are going to go for this next period. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $7.56 with a weighted average of $124.75 on 15,441 head. December corn is up 17 cents per bushel and December soybean meal is up $18.70. The Dow Jones Industrial Average is down 228.50 points.
LIVE CATTLE:
The live cattle complex stood little chance at trading higher as the cash cattle market began to trade cattle in the South for $1.00 lower than last week's weighted average and while the rest of the livestock contracts sailed lower into the day's end. August live cattle closed $0.87 lower at $136.87, October live cattle closed $0.97 lower at $142.37 and December live cattle closed $0.57 lower at $148.05. A handful of cattle sold in Texas for $135, but otherwise the cash cattle market remained untested. More trade will likely develop on Wednesday, but lower tones are expected. It's not unexpected to see boxed beef prices showing some exhaustion, but given how used to higher/stronger prices the market has become, packers could get even tougher to deal with if boxed beef prices start to show midsummer weakness.
Tuesday's slaughter is estimated at 125,000 head, steady with a week ago and 6,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $1.00 ($269.11) and select down $1.12 ($243.88) with a movement of 115 loads (65.71 loads of choice, 27.76 loads of select, 8.97 loads of trim and 12.08 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Lower. Given that the marketplace is uneasy with an interest rate announcement set to be released on Wednesday, the cash market is more likely than not to trade lower. The bigger question is: how many cattle are going to trade this week?
FEEDER CATTLE:
The feeder cattle complex didn't stand much of a chance at trading higher with the corn contracts rallying $0.15 to $0.17 higher through closing. Until the corn market settles down and until the market can see officially how much higher interest rates are going to be come Wednesday afternoon's announcement, the market could then stand a chance at trading higher as demand is still exceptionally strong throughout the countryside, but so much of the market's fate lies at the mercy of the corn market. August feeders closed $1.87 lower at $177.42, September feeders closed $2.25 lower at $180.42 and October feeders closed $2.02 lower at $183.22. At OKC West Livestock Auction in El Reno, Oklahoma, at their midsession point, compared to last week, steers and heifer calves were selling $5.00 to $10.00 higher as cooler weather and chances of rain throughout the week is helping increase buyer excitement. The CME Feeder Cattle Index for July 25: up $0.89, $169.91.
LEAN HOGS:
Even with a snappy jump in the cash hog market, the lean hog complex rounded out the day lower along with the rest of the livestock contracts. Unfortunately, even though the cash market saw a significant jump in prices and on a sizeable volume (up $7.56 on 15,441 head), the market could entice traders to jump in the game as everyone's keeping a safe distance from the market until it's better understood how the commodity market will react to the interest rate hike. August lean hogs closed $0.25 lower at $116.97, October lean hogs closed $0.47 lower at $93.65 and December lean hogs closed $0.27 lower at $85.97. Pork cutouts total 299.26 loads with 282.59 loads of pork cuts and 16.67 loads of trim. Pork cutout values: down $1.05, $126.77. Tuesday's slaughter is estimated at 467,000 head, 7,000 head more than a week ago and 5,000 head less than a year ago. The CME Lean Hog Index for July 22: up $0.91, $119.13.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. It's likely that Wednesday's volume of cash hogs traded is big again, but whether or not prices will remain steady or creep higher is the real question.
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