GENERAL COMMENTS:
While the lean hog and feeder cattle markets dance with problems in their own markets, the live cattle complex is trending higher into Tuesday's afternoon somewhat unchallenged. The feeder cattle complex is sweating bullets as the corn market rips higher and shows that there could be problems with this year's crop. December corn is up 30 1/2 cents per bushel and December soybean meal is up $11.40. The Dow Jones Industrial Average is down 160.45 points.
LIVE CATTLE:
The live cattle complex is leaning into Tuesday's afternoon fully higher and somewhat eager to see what the cash cattle market can the week before Labor Day. August live cattle are up $0.62 at $141.85, October live cattle are up $0.42 at $144.92 and December live cattle are up $0.42 at $150.97. The market is showing that it's willing to trade higher after closing slightly lower Monday afternoon, but traders need to see strong fundamental drive to do so. The cash cattle market could potentially hold the market steady this week, but then again it wouldn't be surprising to see prices fall lower given that some plants are planning to be dark this Saturday and that next week will see a reduced kill schedule too because of the holiday. Some light business has begun to develop in Texas for $142, which is about steady with last week's business, but otherwise the market hasn't seen any interest from packers. Asking prices in the South are noted at $145 but are not yet established in the North.
Boxed beef prices are mixed: choice down $0.44 ($264.08) and select up $1.12 ($239.48) with a movement of 94 loads (61.74 loads of choice, 11.68 loads of select, 6.18 loads of trim and 14.20 loads of ground beef).
FEEDER CATTLE:
It's a tough day for the feeder cattle complex because not only are corn prices trading higher, but so are all the other grain markets, and by trading higher, I mean flat soaring into Tuesday's afternoon. The grain market began to soar higher as falling crop ratings and the belief that yields are continuing to erode has everyone questioning what exactly this year's crop will amount to. Dana Mantini, DTN's Senior Market Analyst, said, "Corn conditions fell to the second lowest rating since 2012, and findings so far from the Midwest crop tour seem to find more problems related to drought in the central and Western Corn Belt. New crop corn and soy futures have both moved above the closely watched 50-day moving average." As the noon hour nears the corn complex is rallying anywhere from $0.27 to $0.30. Nevertheless, the feeder cattle market has become overpowered by grain market news and is trending fully lower into the afternoon. September feeders are down $1.35 at $183.00, October feeders are down $1.30 at $185.17 and November feeders are down $1.50 at $187.10.
LEAN HOGS:
The lean hog complex is a mixed bag as the futures complex is trading higher, but Tuesday morning's midday pork cutout value posted a drastic $11.14 regression. October lean hogs are up $0.25 at $94.22, December lean hogs are up $0.72 at $85.20 and February lean hogs are up $0.97 at $88.67. The pork cutout value fell so direly as the bellies printed $47.37 lower Tuesday morning. If pork cutout values do show a steep erosion on the afternoon's report, then the contracts could come under pressure. The cash hog market is seeing light interest in the market to start the day off, as it seems that packers are gauging demand and could wait until Wednesday to really begin to buy hogs.
The projected lean hog index for Aug. 22 is down $0.80 at $119.18, and the actual index for Aug. 19 is down $0.31 at $119.98. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.27 with a weighted average of $121.28, ranging from $112.50 to $135.00 on 5,255 head and a five-day rolling average of $123.91. Pork cutouts totaled 232.99 loads with 198.65 loads of pork cuts and 34.34 loads of trim. Pork cutout values: down $11.14, $106.47.
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