GENERAL COMMENTS:
The livestock complex closed mixed with the lean hog market charging higher into Monday's end while the cattle contracts grew weaker as the day progressed. If corn continues to trade lower throughout the week, the cattle complex should have a chance to redeem itself. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $8.08 with a weighted average of $115.61 on 3,203 head. December corn is down 14 cents per bushel and December soybean meal is down $12.80. The Dow Jones Industrial Average is up 151.39 points.
LIVE CATTLE:
To much surprise, the live cattle complex rounded out Monday's trade lower as the market lacked substantial trader interest to move the complex higher. One would have thought that with the corn complex trading lower and with the big gains in which the cash cattle market has recently championed that the market would have roared into Monday's start but by the day's end the market grew leery. Thankfully, the market's fundamental playing field is still supportive with new showlists appearing to be mixed, somewhat higher in Kansas, higher in Nebraska/Colorado, but lower in Texas, and with Monday's boxed beef prices closing higher. Given the recent momentum in which the cash cattle market has gained, feedlots are expected to price cattle higher again this week. It wouldn't be surprising to see trade wait until Wednesday or later to develop as feedlots are going to run into pressure when negotiating with packers. August live cattle closed $0.47 lower at $139.75, October live cattle closed $0.70 lower at $143.80 and December live cattle closed $0.90 lower at $149.72.
Monday's slaughter is estimated at 124,000 head - 5,000 head more than a week ago and 6,000 head more than a year ago.
Last week's negotiated cash cattle slaughter totaled 100,017 head. Of that 65% (64,722 head) were committee for the nearby delivery while the remaining 35% were committed for the deferred delivery. Last week Southern live deals were marked at $138 to mostly $140, roughly $3 to $4.50 higher than the prior week's weighted averages. Northern dressed business had a full range of $227 to $236, mostly $229 to $230, about $2 to $3 higher than the previous week's weighted average basis for Nebraska.
Boxed beef prices closed higher: choice up $0.14 ($263.51) and select up $0.22 ($239.81) with a movement of 44 loads (23.16 loads of choice, 5.76 loads of select, 6.59 loads of trim and 8.32 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Given that packers are still running aggressively processing schedules, their need for cattle isn't dwindling and they've shown the market that they're in need of cattle.
FEEDER CATTLE:
Even though the corn complex closed $0.13 to $0.14 lower, the feeder cattle market closed lower in all of its contracts besides the August 2022 contract. Given that corn prices traded noticeably lower, one would have thought that the feeder cattle market would have shot higher and maybe even the live cattle market, but that wasn't Monday's scenario. Thankfully demand throughout the countryside hasn't weakened whatsoever so come Tuesday if the corn market doesn't pose any threat the market may be able to push its contracts higher after all. August feeder cattle closed $0.30 higher at $179.92, September feeder cattle closed $0.37 lower at $183.00 and October feeder cattle closed $0.40 lower at $185.60. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers and heifers both traded steady to $5.00 higher. At Oklahoma National Stockyards in Oklahoma City, Oklahoma at their midsession point feeder cattle and calves were selling $4.00 to $8.00 higher with instances of $15.00 higher on calves. The CME feeder cattle index 8/12/2022: up $0.76, $179.04.
LEAN HOGS:
While the cattle complex traded Monday's market gingerly, the lean hog market grew stronger as the day traded on and ultimately rounded out the day higher. October lean hogs closed $0.55 higher at $100.57, December lean hogs closed $0.47 higher at $90.85 and February lean hogs closed $0.20 higher at $92.95. It's concerning that both Friday and Saturday's kills were revised lower, and that Monday's kill is estimated at a measly 428,000 head -- but given the limited number of market-ready hogs, packers are trying to offset their need of scrounging cash market week in and week out by slowing down their chains. And with pork cutout values finding ample support early in the week, packers are likely to continue this tactic. Pork cutouts total 295.41 loads with 247.72 loads of pork cuts and 47.69 loads of trim. Pork cutout values: up $3.08, $124.91. Monday's slaughter is estimated at 428,000 head - 30,000 head less than a week ago and 47,000 head less than a year ago. Friday's hog slaughter was revised to 433,000 head and Saturday's hog slaughter was revised to 23,000 head. The CME lean hog index 8/11/2022: up $0.07, $121.93.
TUESDAY'S CASH HOG CALL: Steady. Given that packers have reduced processing speeds, it's likely that they aren't overly active in the cash market until Wednesday.
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