GENERAL COMMENTS:
The livestock complex was welcomed by a supportive market right from Tuesday's get-go and is sustaining the market's positive tones. The biggest jumps have been seen in the feeder cattle market as the complex rallies while it watches the corn market struggle. December corn is down 14 1/2 cents per bushel and December soybean meal is down $2.60. The Dow Jones Industrial Average is up 540.04 points.
LIVE CATTLE:
So far, Tuesday's market has been nothing but supportive for the live cattle market and, given how widespread the market's support is, a higher close isn't out of the market's picture. August live cattle are up $0.32 at $135.95, October live cattle are up $0.55 at $141.15 and December live cattle are up $0.52 at $146.67. Tuesday's higher push has helped prop the August contract back above the market's 100-day moving average, but the real wonder left on everyone's mind is whether or not the cash market will be able to capitalize on the current positive tones. It is helpful to feedlots' plea for steady prices that boxed beef demand is still strong, but that likely won't overpower the fact that packers have cattle committed for this time and will pull on those supplies to escape from supporting the cash market. The cash market hasn't seen any interest develop yet, and it's likely that doesn't shake loose until Wednesday or later. Asking prices in the South have been noted at $139-plus, but the North has yet to share their asking prices.
Boxed beef prices are higher: choice up $2.43 ($272.98) and select up $2.27 ($244.93) with a movement of 54 loads (22.47 loads of choice, 11.07 loads of select, 7.93 loads of trim and 12.10 loads of ground beef).
FEEDER CATTLE:
With corn prices taking a beating Tuesday, the feeder cattle contracts have maintained a snappy rally throughout the morning's trade. August feeder cattle are up $2.02 at $178.70, September feeder cattle are up $2.22 at $181.62 and October feeders are up $2.15 at $184.47. This positive turn of events comes as perfect news to cattlemen who are selling with Northern Livestock Video Auction this week. Buyers will likely hit the market aggressively as any weakness in the corn complex is warmly welcomed and buyers are still having to be critical of their input costs. As a technical note, most of the contracts did gap higher Tuesday morning, pushing the contracts away from the breakout range established earlier last week. At some point the market will look to fill that gap but given the positive undertones lining the market right now, the refilling won't likely come in the immediate future.
LEAN HOGS:
The nearby lean hog contracts are trending higher into Tuesday's afternoon, but the deferred contracts are trending mostly lower as concerns about heavier supplies keep the deferred markets depressed. Nevertheless, the nearby contracts are seeing modest support from traders as not only are cash prices helping boost the market's confidence but also that midday pork cutout values are higher. Given that Monday's cash market was so thinly traded, it's quite likely that packers' acquisition of cash hogs stays strong through the day's close. August lean hogs are up $0.92 at $113.00, October lean hogs are up $0.25 at $94.62 and December lean hogs are up $0.05 at $85.82.
The projected lean hog index for July 18 is up $1.02 at $115.91, and the actual index for July 15 is up $0.74 at $114.89. Hog prices are higher on the Daily Direct Morning Hog Report, up $4.90 with a weighted average of $117.49, ranging from $108.00 to $125.00 on 6,910 head and a five-day rolling average of $116.63. Pork cutouts total 143.56 loads with 130.91 loads of pork cuts and 12.66 loads of trim. Pork cutout values: up $3.76, $125.72.
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