GENERAL COMMENTS:
The relentless nature of this week's feeder cattle market has everyone wishing they had bought four more pot loads of pairs this spring. The feeder cattle market is showing no sign of slowing down as Western Video Market and Superior continue to sell calves and feeders at dynamite prices. December corn is up 15 1/2 cents per bushel and December soybean meal is up $14.50. The Dow Jones Industrial Average is down 151.96 points.
LIVE CATTLE:
The live cattle contracts are pressing onward Wednesday, showing the bullish tone of the market is still alive and well. As the spot August contract comes close to reaching its three-month average high, the market's bullish tones continue to drive in the point that supplies of cattle moving into the second half of 2022 and into 2023 are going to be thin. Even with June's consumer price index coming in at a staggering 9.1% YOY rate (and remember the market was expecting to see it print at 8.8% YOY) the cattle market doesn't seem to be shaken. August live cattle are up $0.57 at $137.25, October live cattle are up $0.52 at $141.80 and December live cattle are up $0.72 at $147.92. The cash cattle market has seen some cattle trade in the South at $137, which is fully steady with last week's market. Bids of $150 are being offered in Nebraska, $230 is being offered in Iowa, and bids of $136 to $137 sit in Kansas as feedlots don't seem too worried about rushing this week's market.
The Fed Cattle Exchange Auction held today reported 15 lots, totaling 1,478 head of cattle, of which only 1 lot sold (CA, 35 head at $140.00).
Boxed beef prices are lower: choice down $0.07 ($268.44) and select down $0.37 ($241.80) with a movement of 71 loads (40.56 loads of choice, 18.30 loads of select, zero loads of trim and 11.69 loads of ground beef).
FEEDER CATTLE:
It's wild how much a market can change in a matter of three short days. When you look at the feeder cattle market, it's hard not to daydream and wonder if these prices are real as the cheapest contract on the board right now is August 2022 feeder cattle and they're trading for $180.52, and the highest contract on the board right now is the May 2023 feeder cattle contract as it is trading at $190.02. This week has been an absolute whirlwind for the feeder cattle market as buyers rush to sales and buy as if they have gold sitting in duffel bags out in their beat-up one-ton in the parking lot. All while the grain market has been under almost constant pressure, which has helped brighten buyers' cost of gains as feed prices are dropping. The beauty of the market's rally, though, is that it came as a triple-action win: higher board, higher cash and lower grains is a winning equation. Heading into Wednesday afternoon, the feeder cattle contracts are still trending higher even as the corn market swings at a modest recovery with its nearby contracts trending 15 to 17 cents higher. Regardless, the demand in Superior's sale and in Western Video Market's sale has been HOT as buyers thoroughly understand that come this fall the market won't have nearly as many cattle to trade as what they've been accustomed to. August feeders are up $0.90 at $at $180.47, September feeders are up $1.12 at $182.65 and October feeders are up $1.17 at $184.62.
LEAN HOGS:
With Tuesday's strong close in the cash market and in pork cutout values, the futures market has performed well through Wednesday's early trade. July lean hogs are up $0.90 at $114.50, August lean hogs are up $1.90 at $110.90 and October lean hogs are up $1.32 at $93.97. Cash prices have slowed down Wednesday as it's looking like packers have filled a sizeable portion of their needs for the week. But thankfully, the midday pork cutout prices are still trending higher and lending the market the fundamental support it needs. Monday's slaughter was revised lower, seeing how Wednesday's market fares and if there's a revision for Tuesday will be important this afternoon.
The projected CME Lean Hog Index for 7/12/2022 is up $0.24 at $112.80, and the actual index for 7/11/2022 is up $0.79 at $112.56. Hog prices are lower on the Daily Direct Morning Hog Report, down $6.19 with a weighted average of $115.58, ranging from $110.50 to $125.00 on 4,855 head and a five-day rolling average of $119.35. Pork cutouts total 135.77 loads with 130.16 loads of pork cuts and 5.60 loads of trim. Pork cutout values: up $1.32, $118.79.
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