GENERAL COMMENTS:
The cattle contracts are trading gingerly into Thursday's market while the lean hog contracts take on Thursday's arrival with a bit more aggression. There's been some cash cattle trade reported in the South at $0.50 to $1.00 higher than the rest of the trade this week, which begs the question: are packers short bought and could the cash market have found a bottom in last week's market? December corn is up 9 1/4 cents per bushel and December soybean meal is up $21.70. The Dow Jones Industrial Average is down 73.20 points.
LIVE CATTLE:
There's nothing more thrilling to feedlots than when packers have to up their bids later in the week because they've been caught short bought. There's been a light round of trade reported in the South at $135.50 to $136 which is $0.50 to $1.00 higher than the rest of the week's business and last week's trade. As packers show the cash cattle market more interest, the conclusion that's seeming somewhat undeniable is that packers are short bought and actually need cattle. The big question now is: was last week's trade the low for the summer?
The nearby contracts aren't doing much while the deferred contracts add slightly to their contracts. With China firing some missiles, the entire commodity market is hesitant to do much of anything as we all wait to see if tensions will ease or grow more concerning. August live cattle are down $0.10 at $137.80, October live cattle are down $0.32 at $143.62 and December live cattle are down $0.15 at $149.80.
Beef net sales of 12,000 mt for 2022 were down 52% from the previous week and 30% from the prior four-week average. The three primary buyers were South Korea (2,900 mt), Japan (2,400 mt) and Canada (1,800 mt).
Boxed beef prices are higher: choice up $0.27 ($268.21) and select up $0.13 ($241.43) with a movement of 52 loads (23.41 loads of choice, 14.51 loads of select, 4.70 loads of trim and 9.77 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts would have gladly traded higher into Thursday's market if only the corn complex would have stayed weak and the nearby live cattle contracts could have shown support. The main reason why feeders are trading lower though is the $0.07 to $0.08 jump in corn. Even though the live cattle contracts aren't trading higher, it's exciting to see that a light trade has developed in parts of South at $135.50 to $136 which is $0.50 to $1.00 higher than both this week's trade and last week's business. Feeder cattle buyers have looked at their breakevens on the calves and feeders they've been buying and aside from expensive corn, buyers were desperately needing to see higher prices on the fat cattle side of things to make these feeder cattle prices work. And, even though this week's slight bump isn't where cattlemen rest easy at, it shows signs that the cash cattle market could have made it's low. August feeders are down $0.55 at $178.80, September feeders are down $0.57 at $182.32 and October feeders are down $0.60 t 185.10.
LEAN HOGS:
The lean hog complex has grown stronger through Thursday's market but at this point, the contracts still seem unsure if they can bypass resistance. Thursday's export report was favorable to the pork market as net sales of 31,000 mt are pleasing. It comes as no surprise that midday cash prices are lower after Wednesday's huge movement, the important thing to watch for in Thursday afternoon's data will be how pork cutout values fair. October lean hogs are up $1.22 at $97.07, December lean hogs are up $1.00 at $88.40 and February lean hogs are up $0.67 at $91.15.
The projected lean hog index for Aug. 3 is up $0.67 at $121.61 and the actual index for Aug. 2 is down $0.63 at $120.94. Hog prices are lower on the Daily Direct Afternoon Hog Report, down $2.28 with a weighted average of $127.04, ranging from $114.00 to $135.00 on 11,095 head and a five-day rolling average of $126.04. Pork cutouts total 147.80 loads with 125.74 loads of pork cuts and 22.06 loads of trim. Pork cutout values: up $3.43, $128.92.
Pork net sales of 31,000 mt for 2022 were up 43% from the previous week and 35% from the prior four-week average. The three largest buyers were China (16,800 mt), Mexico (8,600 mt) and Japan (1,800 mt).
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