GENERAL COMMENTS:
The livestock complex has regained an upbeat tone after Tuesday's doggish trade. The live cattle market is still trending mixed with its nearby contracts suffering while the late 2022 and early 2023 contracts rally. Meanwhile, both the lean hog and feeder cattle contracts are rallying into Wednesday's afternoon as traders help propel the markets higher after seeing strong fundamental demand. December corn is up 3 1/4 cents per bushel and December soybean meal is up $7.50. The Dow Jones Industrial Average is up 133.60 points.
LIVE CATTLE:
It comes as no surprise that, as we wade through the dog days of summer, both the nearby August and October contracts are trading lower as the cash market trends $1.00 to $2.00 lower from last week's weighted average. The deferred months of December 2022 through June 2023 are enjoying a mild rally while the rest of the market heads lower as it's undeniable that supplies will be significantly thinner during that time span and that cash cattle prices should see higher price points to allow packers to keep up with consumer demand. August live cattle are down $0.12 at $136.75, October live cattle are down $0.12 at $142.25 and December live cattle are up $0.10 at $148.15. There's been a light movement of trade that's developed Wednesday morning in Kansas and Nebraska. Southern deals continue to trade at $135, which is $1.00 lower than last week's weighted average, and Northern deals are developing at $225 which is $2.00 lower than last week's weighted average. Not helping feedlots this week is the onset of slight push back in boxed beef prices.
The Fed Cattle Exchange Auction held Wednesday reported 12 lots, totaling 1,422 head of cattle, none of which sold.
Boxed beef prices are lower: choice down $0.65 ($268.46) and select down $0.61 ($243.27) with a movement of 82 loads (54.52 loads of choice, 11.24 loads of select, 7.14 loads of trim, 9.40 loads of ground beef).
FEEDER CATTLE:
Even with the corn market pushing mild $0.02 to $0.04 rally, the feeder cattle contracts are cranking higher Tuesday morning as traders seem willing to be back in the game. August feeders are up $1.32 at $178.75, September feeders are up $1.22 at $181.65 and October feeders are up $1.00 at $184.22. Sale barns have seen continued support and unwavering interest in both feeders and calves this week, which is helping give traders the confidence they need in order to justify a higher move in the complex. The live cattle market isn't lending any support as it's trading mixed technically and as cash cattle continue to trend lower, but given that the market is wading through the dog days of summer, the feeder cattle market isn't expecting any help from its fellow cattle contracts.
LEAN HOGS:
Pork cutout values may be lower at midday, but that's not stopping the futures market nor the cash market from rallying. August lean hogs are up $1.72 at $118.70, October lean hogs are up $2.62 at $96.27 and December lean hogs are up $1.47 at $87.45. After trading lower on both Monday and Tuesday of this week, the market has shot higher and is aiming at regaining technical ground as the cash market gives the market the support it was lacking. Given how significant the rally the has been in the cash market, it's unlikely that the market will lose its momentum ahead of closing.
The projected lean hog index for July 26 is up $0.25 at $119.73, and the actual index for July 25 is up $0.40 at $119.48. Hog prices are higher on the Daily Direct Morning Hog Report, up $13.01 with a weighted average of $129.06, ranging from $114.00 to $134.00 on 18,555 head and a five-day rolling average of $123.76. Pork cutouts total 134.57 loads with 125.59 loads of pork cuts ad 8.98 loads of trim. Pork cutout values: down $1.19, $125.58.
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