Monday Closing Livestock Market Update - August Lean Hogs Churn Higher, Cattle Contracts Subdued

GENERAL COMMENTS:

Mild losses stalked the livestock futures markets through the Monday session, although feeder cattle contracts and some of the nearby lean hog contracts were able to end the day with gains. Bids and asking prices haven't been established for this week's cash cattle market, but last week was marked at mostly $179 in the South and $294 in the North. The National Direct Afternoon Hog Report showed purchased swine prices up $1.24 to a weighted average of $101.71 on 1,483 head. Prices ranged from $90 to $108, and the 5-day rolling average is now $105.56. September corn moved down 17 cents to $5.04 per bushel and August soybean meal closed down $4.00 per ton to $451.20. The Dow Jones Industrial Average was up 100.90 points and the NASDAQ was up 6.07 points.

LIVE CATTLE:

Live cattle futures kicked off the week by moving in a downward direction, but the losses weren't large. The August contract closed down $0.10 at $178.05; the October contract closed down $0.075 at $179.525, and the December contract closed down $0.20 at $183.40. Futures trading volume was light throughout the session. Without fresh momentum on the charts, and at these relatively lofty prices, few traders will see a reason to push the market to new highs. But, on the other hand, if the cash cattle market remains firm this week, the futures will have to stay steady to keep the pace. Bids and asking prices haven't been established yet for the week, but they'll be benchmarked against last week's prices -- $179 live basis in the South and $294 dressed basis in the North. After such light business was transacted late last week, the expectation is that packers will have to come at the market a little harder this week to make up the volume. 

Boxed beef prices were mixed: choice down $0.22 ($301.78) and select up $0.19 ($277.73), with a movement of 86 loads (44.43 loads of choice, 25.22 loads of select, 0 loads of trim and 16.70 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Given that packers are short bought, prices will likely turn higher this week when cattle trade.

FEEDER CATTLE:

Feeder cattle futures contracts shook off the bearish spillover trade from the rest of the livestock sector and instead posted their own gains. At the end of the session, the August feeder cattle contract was unchanged at $245.60, the September contract was up $0.225 at $249.20, and the October contract was up $0.025 at $251.025. Soybeans led the steep losses in the agricultural commodity futures sector Monday, and although these were likely triggered by falling prices among international edible oils, here in the U.S., traders were also happy to run with a weather forecast for some precipitation to improve the Corn Belt's yield prospects. Better yields and more available grain is the kind of outlook that could help buying calves above $240 still potentially pencil out at a profit sometime in 2024.

LEAN HOGS:

Active spread trading Monday between the nearby and deferred months' lean hog futures contracts reflected the more bullish outlook for summer and fall versus the more bearish outlook for the market past December. The August lean hog contract closed up $0.925 at $104.125; the October contract closed up $0.975 at $86.00; and the December contract closed up $0.25 at $77.30. Lower barrow and gilt weights at slaughter during this summer season may be adding to the market's bullish interpretation about near-term supply to restock relatively current cold storage. The afternoon pork cut-out showed the overall carcass value up $3.74 to $117.21. There were 229.49 total loads (201.98 loads of cuts and 27.51 loads of trim). The CME Lean Hog Index for July 27: down $0.03, $105.81, and the projected Index for 7/28: up $0.19, $106.00.

TUESDAY'S CASH HOG CALL: Steady to $1 higher. Relatively stable cut-out values mean that packers can approach a tight summer hog market with strength.

Monday Midday Livestock Market Summary - Cattle, Hog Futures Start Week With Lower Prices

GENERAL COMMENTS:

Amid much steeper losses in the oilseed and grains sector, livestock futures contracts are also experiencing a mild sell-off to start the week Monday morning. Only nearby lean hogs and feeder cattle futures were sometimes able to trade higher during Monday morning, in the traditional pattern where feed prices go down and feeder cattle prices go up. As feedlot showlists are assembled for the week, cash cattle prices will be benchmarked against last week's prices -- $179 live basis in the South and $294 dressed basis in the North -- although only light volumes traded at those prices. September corn is down 17 3/4 cents per bushel and August soybean meal is down $5.40 per ton. The Dow Jones Industrial Average is down 9.92 points.

LIVE CATTLE:

Live cattle futures slid lower through last week and are starting this week with more sliding. August live cattle are down $1.10 at $177.05, October live cattle are down $1.425 at $178.175 and December live cattle are down $1.20 at $182.40. On the one hand, this dip is consistent with the cash cattle prices that traded roughly $1 lower at the very tail end of last week (late on Friday), but on the other hand, such low volumes of packer business was done last week that it's widely assumed the packers will have to be more aggressive later this week. Feedlot showlists will benchmark against last week's cash cattle prices -- $179 live basis in the South and $294 dressed basis in the North. Monday's slaughter is estimated at 123,000 head, which is 2,000 fewer than a week ago but 1,000 more than a year ago at this time.

Boxed beef prices were higher Monday morning: choice up $0.06 ($302.06) and select up $2.42 ($279.96), with a movement of only 24 loads (15.85 loads of choice, 3.45 loads of select, 0 loads of trim and 4.87 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures contracts were able to take the sharply lower feed grain prices on Monday morning and turn it into an excuse to move higher during the early part of the trading session, but they have since slipped into lower territory too. August feeders are down $1.20 at $244.40, September feeders are down $1.125 at $247.85 and October feeders are down $1.20 at $249.80. A wetter forecast for dry portions of the U.S. Corn Belt during a critical phase of crop development is giving everyone hope that yields might not be too catastrophic this year and the ongoing scarcity in the domestic feed grains market might be mitigated. The relative availability and affordability of feed is a classic motivator for feeder cattle futures traders, and a large volume of futures trade has been noted so far on Monday.

LEAN HOGS:

Movement in lean hog futures contracts has been muted so far Monday and has maintained the mostly sideways character of the deferred months' charts. August lean hogs are up $0.325 at $103.525, October lean hogs are down $0.20 at $84.825 and December lean hogs are down $0.60 at $76.45. Friday's higher jump left a small gap above $102.15 on the August chart, but the lower trade so far Monday hasn't ventured low enough to totally fill that gap yet, so more selling may yet be needed in the afternoon to explore the depth of market orders at that price. Spread trade has been active, showing the diverging outlooks between nearby seasonal hog supply and demand versus the more bearish worries for the market toward the end of the year. Monday's slaughter is projected at 468,000 head, which is 9,000 more than a week ago and 56,000 more than a year ago at this time.

The projected CME Lean Hog Index for July 28 is up $0.19 at $106.00 and the actual index for July 27 was down $0.03 at $105.81. In Monday's Daily Direct Morning Hog Report, negotiated values were up $2.09 to a weighted average price of $101.56, ranging from $90 to $108 on 958 head, and the five-day rolling average is $104.76. Pork cutouts total 119.28 loads with 100.50 loads of pork cuts and 18.78 loads of trim. Pork cutout values: up $6.15 to $119.62.

Monday Morning Livestock Market Update - Interesting Week Ahead

GENERAL COMMENTS:

It was an interesting week for cattle with the last half of the week showing sideways consolidation in live cattle futures. Traders waited for cash direction, but little was to be seen. Very light trade took place $1.00 lower, which will make for an interesting week. Packers had sufficient cattle purchased ahead and the hot weather last week left them less aggressive in the market. It is likely packers will need cattle this week and may need to pay up for them if feedlots continue to hold out. Packers will not want to pay up as boxed beef prices continue to weaken. Choice was down $0.86 and select down $2.22 on Friday. Packer margins are substantially below last year and the three-year average. Lower corn futures might provide some support for feeder cattle today. The Commitment of Traders report showed funds reducing their long position by 7,200 contracts, bringing their net-long position to 106,615. Funds sold 1,801 contracts of feeder cattle, moving their net-long position to 14,212 futures contracts.

Hogs had a good day to end the week. Traders seemed to position themselves ahead of the end of the month, resulting in short-covering. They also reacted to stronger cutouts from Thursday. However, this may not carry over to Monday as both cash and cutouts were lower. The National Direct Afternoon Hog report showed cash down $3.06 with cutouts down $1.26. This sets the stage for lower futures Monday as traders react to the weakness. The Commitment of Traders report showed funds adding 388 contracts, moving their net-long futures positions to 26,574 contracts.

	BULL SIDE		BEAR SIDE
1)	Packers purchased a limited volume of cattle last week, so they will need to be more aggressive this week to keep from being short on supply.	1)	Even though corn prices are declining again, it costs money to hold cattle for extra time. Feedlots might be trading dollars for dollars with limited, if any, benefit.
2)	Limited weight gain during the hot spell may limit grading and lower corn prices might leave feedlots less willing to move cattle this week unless at higher prices.	2)	Significantly tighter packer margins and further boxed beef weakness may further reduce slaughter pace, requiring lower numbers to be purchased.
3)	August hogs are about $2.50 below the index with two weeks remaining for the contract. This will need to converge.	3)	August hogs left a gap on the stronger opening Friday. This gap may be filled Monday as cash and cutout weakness Friday will impact trading activity.
4)	Pork packer margins are near the three-year average, which should keep them active in the cash market and support prices.	4)	October hog futures closed near technical resistance, which may increase selling pressure.

Friday Closing Livestock Market Update - Still Waiting for Cattle to Trade

GENERAL COMMENTS:

Friday closed on a mostly higher note for the livestock complex but the biggest watched market all day was the cash cattle complex -- and still only a handful of cattle have traded. As packers and feedlots head into next week's market, tensions are likely to be high as neither party wants to budge. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.06 with a weighted average price of $100.47, ranging from $95.00 to $108.00 on 1,333 head.

From Friday to Friday, livestock futures scored the following changes: August live cattle down $1.88, October live cattle down $2.30; August feeder cattle down $0.33, September feeder cattle down $0.30; August lean hogs up $2.53, October lean hogs up $0.78; September corn down $0.60, December corn down $0.06.

LIVE CATTLE:

What a market to be watching! It was just a couple of years ago when some believed that the cash cattle market had lost all of its relevance, and it was common to see cattle begin to trade on Tuesday afternoon, and on really bad weeks as early as Monday afternoon. But, low and behold, here we sit at Friday's end with only a handful of cattle traded in the North as, largely, feedlots don't seem interested in giving their showlists up for weaker to steady prices. With showlists being extremely current, feedlots see more opportunity in holding their cattle over into next week and marketing them then as opposed to selling them now and allowing packers the upper hand. Packers are working with tight margins and have reduced slaughter speeds as an effort to try to combat how many cattle they're needing to procure from the cash market on a weekly basis. Nevertheless, as of Friday afternoon, only a handful of cattle have traded in the North at $294 which is $1.00 lower than last week's weighted average. Bids of $176 to $178 are currently being offered in the South, but with Southern feedlots wanting $180 to $182, those offers have been passed on.

August live cattle closed $0.10 higher at $178.15, October live cattle closed $0.10 higher at $179.60 and December live cattle closed $0.20 higher at $183.60. 

Friday's slaughter is estimated at 110,000 head, 4,000 head less than a week ago and 22,000 head less than a year ago. Saturday's slaughter is projected to be around 10,000 head. This week's slaughter is estimated at 619,000 head, 5,000 head less than a week ago and 47,000 head less than a year ago.

Boxed beef prices closed lower: choice down $0.86 ($302.00) and select down $2.22 ($277.54) with a movement of 101 loads (69.14 loads of choice, 16.52 loads of select, 5.49 loads of trim and 10.15 loads of ground beef).

MONDAY'S CATTLE CALL: Steady to somewhat higher. With feedlots this willing to hold out for steady to higher prices, it's unlikely that they give up easily next week.

FEEDER CATTLE:

The feeder cattle complex continued to trek higher through Friday's end, relying on the support that came from the corn market's weaker end and from the excellent demand in the countryside. August feeders closed $0.95 higher at $245.60, September feeders closed $0.70 higher at $248.97 and October feeders closed $0.65 higher at $251.00. This past week demand was strong in most countryside sales, with the only classes really seeing a stiff pushback being any group of calves that was unweaned. With temperatures as hot as they are, buyers look at those calves as too big of a risk to gamble on at this point. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week and throughout the entire state feeder steers and heifers traded steady to $3.00 lower. Steers calves sold steady to $4.00 higher and heifer calves traded $3.00 to $4.00 lower. Feeder cattle supply over 600 pounds was 62%. The CME Feeder Cattle Index for July 27: up $0.58, $242.87.

LEAN HOGS:

I had my doubts, but the lean hog complex came to play in Friday's market as the spot October contract closed above the resistance at $85.00. Come Monday, the market will be immediately tested again to see if traders can keep the market above that threshold or if Friday's higher end was s fluke. August lean hogs closed $1.17 higher at $103.20, October lean hogs closed $1.77 higher at $85.02 and December lean hogs closed $1.25 higher at $77.05. The market's fundamentals weren't much help as both cash prices and cutout values closed lower, but traders didn't seem to care. Pork cutouts totaled 291.54 loads with 265.15 loads of pork cuts and 26.39 loads of trim. Pork cutout values: down $1.26, $113.47. Friday's slaughter is estimated at 460,000 head, 22,000 head more than a week and year ago. Saturday's slaughter is projected to be around 82,000 head. The CME Lean Hog Index for July 26: up $0.05, $105.84.

MONDAY'S HOG CALL: Lower. It's unlikely that Monday's cash market will see much interest with pork cutout values being volatile this past week.

Friday Midday Livestock Market Summary - Cash Cattle Market's Standoff Continues

GENERAL COMMENTS:

The cash cattle market has yet to trade any cattle as the battle between packers and feedlots continues. Bids are being offered in both regions, but feedlots aren't interested at this point in trading cattle for cheaper money. December corn is down 7 3/4 cents per bushel and December soybean meal is down $9.00. The Dow Jones Industrial Average is up 238.60 points.

LIVE CATTLE:

The live cattle complex has waited and waited -- and who really knows how much longer the market will have to keep biting its nails as the cash cattle market still hasn't seen any trade develop. Even though waiting until Friday afternoon to trade cattle can cause traders some anxiety, it's a beautiful role reversal to see in the cash cattle market compared to recent years. There are few bids currently being offered, but feedlots are remaining hellbent on holding out for more, and packers are being just as tough as they, at this point, are refusing to pay more for cattle this week. Bids of $176 to $178 are currently being offered in Texas, and bids of $292 dressed are being offered in Nebraska. Asking prices remain firm in the South at $180 to $182. August live cattle are up $0.35 at $178.40, October live cattle are up $0.17 at $179.67 and December live cattle are up $0.40 at $183.80.

Boxed beef prices are lower: choice down $0.24 ($302.62) and select down $3.09 ($276.67) with a movement of 69 loads (52.03 loads of choice, 10.06 loads of select, zero loads of trim and 7.11 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is again trading higher as the market's seen tremendous support from its fundamentals this past week and can't help but continue to trade higher as corn prices are again drifting lower into the day's noon hour. Feeder cattle sales have been strong this past week with the only consistent group of cattle selling lower being calves that are either short weaned or not weaned at all, especially in the South where temperatures are high and the stress that those calves will endure is great. August feeders are up $0.90 at $245.55, September feeders are up $0.87 at $249.15 and October feeders are up $0.85 at $251.20.

LEAN HOGS:

The lean hog complex is trading higher and feeling empowered as the market nears Friday's noon hour. With the October contract nearing the resistance at $85.00, it will be interesting to see what traders do Friday afternoon regarding that threshold. Do they believe that they have enough support to close about that price point, or will their boldness fade as the day's closing bell nears? Time will tell, but with both cash prices and pork cutout values lower, I don't think that it's overly likely that traders will close above $85.00 in the October contract. August lean hogs are up $1.00 at $103.02, October lean hogs are up $1.72 at $84.97 and December lean hogs are up $1.10 at $76.90.

The projected lean hog index for July 27 is down $0.03 at $105.81, and the actual index for July 26 is up $0.05 at $105.84. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.05 with a weighted average price of $99.47, ranging from $95.00 to $104.00 on 1,005 head and a five-day rolling average of $104.80. Pork cutouts total 192.44 loads with 175.61 loads of pork cuts and 16.83 loads of trim. Pork cutout values: down $0.23, $114.50.

Friday Morning Livestock Market Update - Who Will Blink First?

GENERAL COMMENTS:

Both packers and feedlots dug in for the week Thursday, waiting to see who would blink first. Packers are loath to raise bids due to substantially lower margins than last year and the three-year average. The lower trend of boxed beef prices and fewer cattle out in the country have created a tough scenario for packers. Feedlots are fully aware of the situation and intend to capitalize on it. Packers revealed live bids at $176 and dressed bids at $290 to $292. There were a few traded at $292 in Iowa but not enough to set a trend. So far, feedlots have passed with offers of $182 to $182 in the South with no solid offers in the North. Boxed beef closed lower with choice down $0.48 and select down $0.05. Weekly export sales were up slightly from the previous week at 21,400 metric tons (mt).

Hogs just could not maintain the upward momentum, ending Thursday lower. Better export sales had no significant impact on the market. Weekly exports sales totaled 25,200 mt, up 33% from the previous week. Cash activity pointed to lower prices with the National Direct Afternoon Hog report down $2.78. Packers purchased much of what they needed for the week, leaving them less aggressive. Cutouts were higher with a gain of $1.98, which may lend some support to early trading Friday. Saturday slaughter is estimated at 82,000 head.

	BULL SIDE		BEAR SIDE
1)	The resolve of feedlots might pay off again this week as packers will need to purchase animals to meet strong demand even though their margins are not very good.	1)	With tighter margins, packers may have a greater resolve to hold current bids rather than be more aggressive with purchases this week.
2)	Lower corn prices overnight might provide some support to feeder cattle and provide some confidence to feedlots to hold over cattle if they do not receive the prices they want.	2)	Packers may slow chain speed further, requiring fewer cattle to be purchased over the next few weeks. Feedlots may need to move some cattle as corn price remains high, even though it has weakened this week.
3)	Pork cutout prices continue to improve with values Thursday reaching $114.73. Summer demand is good.	3)	The large discount in October and later hog contracts indicates the continued uncertainty of overall demand as the possible full implementation of Prop 12 and Question 13 draw closer.
4)	August hog futures hold a discount to both cash and the index with about two weeks left to trade.	4)	Packers are not expected to be strong buyers of hogs Friday as much of the business has been accomplished for the week.

Thursday Closing Livestock Market Update - Still Waiting on Cash Cattle Trade to Develop

GENERAL COMMENTS:

Once again, another day passed and the war between packers and feedlots remains yet to be settled. Still no sizeable volume of cash cattle trade has developed, meaning that Friday's market will need to see some serious action. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.78 with a weighted average price of $103.53 on 1,650 head. December corn is down 6 cents per bushel and December soybean meal is down $3.00. The Dow Jones Industrial Average is down 237.40 points.

LIVE CATTLE:

The live cattle complex closed mostly lower Thursday, although the February 2024 and April 2024 contracts were able to keep their mild gains through the day's end while the rest of the contracts closed just below steady. It's likely that trades would support the live cattle contracts if they knew the cash cattle market was going to trade higher, but with no substantial trade developed, traders elected to remain cautious for at least another day. Live bids of $176 were offered in the Southern Plains and dressed bids of $290 to $292 were offered in Nebraska, but no one jumped on those offers. Even though packers were able to get a substantial volume of cattle bought last week, they're still going to need to get more cattle purchased this week to avoid being short bought in the weeks ahead. It's still a tossup on whether packers of feedlot mangers will win this week's war in the cash complex as both parties are hoping and praying and the other gives in before they do. Asking prices in the South are noted at $180 to $182 but are still not established in the North. August live cattle closed $0.62 lower at $178.05, October live cattle closed $0.45 lower at $179.50 and December live cattle closed $0.15 lower at $183.40. 

Thursday's slaughter is estimated at 126,000 head, steady with a week ago and 7,000 head more than a year ago.

Thursday's actual slaughter data shared that, for the week ending July 15, steers averaged 893 pounds, which is 1 pound heavier than the previous week and 4 pounds heavier than a year ago. For the same week, heifers averaged 808 pounds, which is 4 pounds less than the previous week and 7 pounds lighter than a year ago.

Boxed beef prices closed lower: choice down $0.48 ($302.86) and select down $0.05 ($279.76) with a movement of 114 loads (65.66 loads of choice, 28.94 loads of select, 14.47 loads of trim and 4.49 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady to $2.00 higher. I'm placing my bet on feedlots and believing that they'll again take the week's upper hand and keep trade at least steady if not advance it $1.00 or $2.00. The fact remains that packers need cattle and with feedlots being short on market ready supplies, packers can't get too lackadaisical.

FEEDER CATTLE:

Even without the live cattle market's support, the feeder cattle complex found enough reassurance in the fact that the nearby corn prices closed lower and from the strong feeder cattle sales in the countryside to keep its contracts higher through Thursday's end. August feeders closed $0.45 higher at $244.65, September feeders closed $0.82 higher at $248.27 and October feeders closed $0.90 higher at $250.35. The spot August contract isn't up against immediate resistant pressure and so long as the corn complex trades steady to somewhat lower in Friday's market, then feeders could be able to keep their higher tone through the week's end. At Winter Livestock Auction in Pratt, Kansas compared to last week feeder steers weighing 700 to 950 pounds sold $5.00 to $8.00 higher. There weren't enough steer calves or heifers to accurately form a market test. Slaughter cows and bulls sold steady. Feeder cattle supply over 600 pounds was 95%. The CME Feeder Cattle Index for July 26: not available at this time.

LEAN HOGS:

The lean hog complex rounded out the day on a lower note except for the August 2023 contract, which closed just mildly higher. With Thursday's thin movement of pork combined with barely any interest in the cash market, it should come as no surprise that traders let the contracts drift lower ahead of the day's final bell. With every day that the market is unable to take out the resistance at $85.00, the market's technical pressure grows stronger and stronger at that threshold. August lean hogs closed $0.37 higher at $102.02, October lean hogs closed $0.37 lower at $83.25 and December lean hogs closed $0.57 lower at $75.80. Pork cutouts totaled 191.16 loads with 161.41 loads of pork cuts and 29.75 loads of trim. Pork cutout values: up $1.98, $114.73. Thursday's slaughter is estimated at 471,000 head, 2,000 head more than a week ago and 14,000 head more than a year ago. Wednesday's hog slaughter was revised to 457,000 head. The CME Lean Hog Index for July 25: up $0.53, $105.79.

FRIDAY'S HOG CALL: Lower. With Thursday's pork cutout movement being so thin, it's likely that packers will be even less inclined to support the cash market on Friday than what they were even Thursday.

Thursday Midday Livestock Market Summary - Hogs and Feeders Trade Higher While Live Cattle Remains Hesitant

GENERAL COMMENTS:

The livestock complex is seeing both the lean hog and feeder cattle contracts trade higher into Thursday's noon hour, but the live cattle market remains skeptical of trading higher ahead of seeing what developments in the cash market. Bids of $290 are currently being offered in Nebraska but otherwise the market remains quiet. December corn is down 5 1/4 cents per bushel and December soybean meal is down $2.70. The Dow Jones Industrial Average is up 51.09 points.

LIVE CATTLE:

The live cattle complex is trading mixed again as just a handful of the market's nearby contracts are trading higher while the market's deferred months are trading mostly lower. Traders would love to move the market higher as they're seeing slightly better interest in the boxes, but without any developments yet in the cash market, it's a risk that traders just aren't willing to take at the time being. The cash cattle market remains painfully quiet as both packers and feedlots stand committed to waiting the other party out. There is a single big currently being offered in Nebraska at $290, but no cattle have traded just yet. Asking prices in the South are noted at $180 to $182, but feedlots have yet to disclose their asking prices in the North just yet. August live cattle are down $0.32 at $178.35, October live cattle are down $0.22 at $179.72 and December live cattle are up $0.05 at $183.60.

Beef net sales of 21,400 mt for 2023 were up 2% from the previous week and 43% from the prior four-week average. The three largest buyers were South Korea (7,400 mt), Japan (5,500 mt), and China (2,800 mt).

Boxed beef prices are mixed: choice down $0.20 ($303.14) and select up $0.17 ($279.98) with a movement of 72 loads (35.44 loads of choice, 19.52 loads of select, 13.57 loads of trim and 3.35 loads of ground beef).

FEEDER CATTLE:

Even though the live cattle contracts are remaining skeptical ahead of seeing what the week's cash cattle trade amounts to, the feeder cattle complex can't help but trade higher as demand is truly unprecedented in the countryside for feeders and as corn prices continue to skate lower. August feeders are up $0.85 at $245.05, September feeders are up $1.27 at $248.72 and October feeders are up $1.30 at $250.75. So long as the corn complex doesn't shift gears and begin to trade drastically higher, the feeder cattle complex should have no issue keeping this momentum through closing.

LEAN HOGS:

The lean hog complex is acknowledging the moderately supportive export report that came Thursday morning alongside the continued downturn of corn prices. More than anything, traders want to see support and consistency in pork cutout values, and at midday prices are slightly higher and the only cuts that are showing slight dips in price are the picnic and the ham. August lean hogs are up $0.07 at $101.72, October lean hogs are up $0.12 at $83.75 and December lean hogs are steady at $76.37.

The projected lean hog index for July 26 is up $0.05 at $105.84, and the actual index for July 25 is up $0.53 at $105.79. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.61 with a weighted average price of $102.54, ranging from $98.50 to $105.00 on 585 head and a five-day rolling average of $104.49. Pork cutouts total 116.94 loads with 96.95 loads of pork cuts and 19.99 loads of trim. Pork cutout values: up $1.85, $114.60.

Pork net sales of 25,500 mt for 2023 were up 33% from the previous week and 6% from the prior four-week average. The three major buyers were Mexico (17,900 mt), Japan (2,600 mt) and Canada (1,100 mt).

Thursday Morning Livestock Market Update - Limited Cash Trade Anticipated

GENERAL COMMENTS:

Traders were searching for solid direction in live cattle but did not find anything to move the market one way or the other, resulting in a mixed close. There is strong anticipation of higher cash this week, but traders are being cautious. Packers might be in a better position to hang tough and pay no more than steady money, leaving it up to feedlots to either take it or pass. The last few weeks have pushed business into the end of the week before most of the business was done. Asking prices are few and far between as feedlots hope for support from boxed beef, export sales, and higher futures. Boxed beef was mixed Wednesday with choice down $0.88 and select up $2.26. Feeder cattle did not react as much to the lower corn prices as one would have anticipated. The market may be getting a little tired at the current level with trade remaining choppy.

Hog futures were under substantial pressure Wednesday but recovered from the selling pressure to close moderately lower. After it looked like packers were still looking aggressively for hogs, traders become more aggressive buyers. The National Direct Afternoon report showed a gain of $0.58. There is uncertainty whether packers will need to remain aggressive Thursday, which may keep futures from pushing higher. Cutouts were weaker with a decline of $0.31. Weekly export sales may have some influence on the market. A group of producers in the Midwest has filed a lawsuit challenging the constitutionality of the Massachusetts Question 3 law that has been put on hold until Aug. 23. Saturday slaughter is estimated at 82,000 head.

	BULL SIDE		BEAR SIDE
1)	Demand for beef continues to hold well despite higher food prices. Packers will need to meet that demand even though margins are tighter.	1)	Traders seem to be anticipating no better than steady cash cattle to trade this week. That may keep upside potential limited as cattle futures have corrected from being overbought.
2)	Feedlots are not in a hurry to move cattle and have posted limited offers so far. Packers have yet to release any bids.	2)	Cattle futures may be looking to trade in a sideways range as demand may have reached a plateau for the time being.
3)	Hog futures had a nice rebound from the lows Wednesday as cash remained higher yesterday. Packers may need to purchase more to fill out the week.	3)	Hog weights increased 0.6 pounds from the previous week to an average weight of 278.5 pounds. This is 1.8 pounds higher than a year ago.
4)	Hot weather is having an impact on weight gain and hog movement, which may provide some support to the market.	4)	A lawsuit against the constitutionality of Questions 3 and the uncertainty surrounding the outcome and the possibility of its implementation and that of Prop 12 may leave upside price potential limited.

Wednesday Closing Livestock Market Update - Cattle Turn Higher as Support Slowly Resurfaces

GENERAL COMMENTS:

It was a supportive day for the cattle complex as both the live cattle and feeder cattle contracts capitalized on the corn market's lower close, but the lean hog market continues to lack traction in this week's market. Hog prices closed lower higher on the Daily Direct Afternoon Hog Report, up $0.58 with a weighted average price of $106.31 on 19,916 head. December corn is down 17 cents per bushel and December soybean meal is up $2.50. The Dow Jones Industrial Average is up 82.05 points.

LIVE CATTLE:

The live cattle complex closed mixed with some of its deferred contracts (February 2024 through June 2024), closing lower while the rest of the market charged onward. Even though boxed beef prices closed mixed, traders are still finding it supportive that the cuts are seeing better interest and that consumers are continuing to buy beef regardless of what the economy and interest rates do. No sizeable cash cattle trade has been reported at this point as packers and feedlots again go toe to toe this week. It's tough telling who will win this week's battle in the cash market as packers were able to get a sizeable volume of cattle bought last week, but the two weeks before that they extremely light on their purchases. Asking prices in the South are noted at $180 to $182, but remain elusive in the North. August live cattle closed $0.37 higher at $178.67, October live cattle closed $0.35 higher at $179.95 and December live cattle closed $0.25 higher at $183.55. Wednesday's slaughter is estimated at 126,000 head, 4,000 head more than a week ago and 2,000 head more than a year ago.

Boxed beef prices closed mixed: choice down $0.88 ($303.34) and select up $2.26 ($279.81) with a movement of 114 loads (77.40 loads of choice, 21.15 loads of select, 3.41 loads of trim and 12.16 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady to $2.00 higher. With packers and feedlots again going rounds this week, it's anyone's game at this point on what cash cattle prices could do.

FEEDER CATTLE:

With corn prices closing an additional $0.16 to $0.17 lower, the feeder cattle complex rose to the day's occasion and championed a higher position by Wednesday's end. Bull markets are fun and thrilling, but to watch the feeder cattle market trade wildly during a bull run is especially exciting. While watching some of Northern Livestock Video Auction's Summertime Classic sale, I saw light weight calves (weighing less than 400 pounds) sell for over $4.00 earlier Wednesday, which is incredible! August feeders closed $0.97 higher at $244.20, September feeders closed $1.10 higher at $247.45 and October feeders closed $1.05 higher at $249.45. The CME Feeder Cattle Index for July 25: up $0.39, $242.01.

LEAN HOGS:

The lean hog complex simply lacked the support necessary to close higher Wednesday afternoon and kept with its lackluster nature through the day's end. Yes, cash prices closed higher and close to 20,000 head traded, but pork cutout values closed lower, and traders simply aren't seeing enough well-rounded support to justify breaking through the resistance at $85.00. August lean hogs closed steady at $101.65, October lean hogs closed $0.75 lower at $83.62 and December lean hogs closed $0.62 lower at $76.37. Pork cutouts totaled 263.84 loads with 233.19 loads of pork cuts and 30.65 loads of trim. Pork cutout values: down $0.31, $112.75. Wednesday's slaughter is estimated at 465,000 head, 3,000 head less than a week ago and 2,000 head less than a year ago. The CME Lean Hog Index for July 24: up $0.66, $105.26.

THURSDAY'S HOG CALL: Steady to somewhat lower. Packers could mildly support the market again on Thursday, but it's unlikely that they'll need enough hogs to push prices any higher this week.

Wednesday Midday Livestock Market Summary - Cattle Finally Regain Technical Footing

GENERAL COMMENTS:

The livestock complex is seeing more support for the cattle contracts as the day nears noon, while the hog contracts are still trading lower. No cash cattle trade has developed and it's looking like the week's business will be delayed until Thursday at this point. December corn is down 16 cents per bushel and December soybean meal is up $1.00. The Dow Jones Industrial Average is up 51.92 points.

LIVE CATTLE:

The live cattle complex is now trading higher as continued pressure in the corn sector lends the market some support and seeing mixed to higher tones in boxed beef prices is encouraging as well. The real question that's holding traders back at this point is: what will cash prices do? Packers were able to get a sizeable volume of cattle committed last week, and they've really pulled back the reins on processing speeds. All of that could mean that their need to buy more cattle in the cash market this week is limited. Adversely, however, it's also important to realize that 1) front-end supplies of market-ready cattle are thin now and will be well into the fall, so packers are going to have to stay more active and engaged in the cash market than what they'd like, 2) with boxed beef prices seeing more support over the last week, packers need to ensure that they have enough product to market, and 3) with cold storage supplies being thin, packers can't simply open the flood door to cold storage supplies and pull out more meat, they're again going to need to procure more cattle through the cash market. August live cattle are up $0.50 at $178.80, October live cattle are up $0.65 at $180.25 and December live cattle are up $0.60 at $183.90. No cash cattle trade has developed at this point and it's looking like trade could be delayed until Thursday.

Boxed beef prices are mixed: choice down $0.37 ($303.85) and select up $2.95 ($280.50) with a movement of 71 loads (48.71 loads of choice, 12.75 loads of select, zero loads of trim and 9.17 loads of ground beef).

FEEDER CATTLE:

As the nearby corn contracts trade an additional $0.14 to $0.16 lower, the feeder cattle complex is charging higher as its market believes in the support overflowing from sharply higher sales in the countryside and breathes a sigh of relief from the downturn in corn. It's also helping matters that the live cattle contracts are trading slightly higher too, but more than anything, the tremendous support currently being found from strong feeder cattle sales can no longer go overlooked this week. August feeders are up $0.70 at $243.92, September feeders are up $1.12 at $247.50 and October feeders are up $1.15 at $249.55.

LEAN HOGS:

The lean hog complex would like to keep with Tuesday's trend and continue to trade higher, but with mixed support and signals from the market's fundamentals, coming up against the resistance at $85.00 in the spot October contract is just too much pressure right now. The cash hog market is seeing a little more interest Wednesday morning, but packers remain least aggressive in the Eastern Corn Belt. Pork cutout values are a wash at midday but if packers could see a little better support/demand in this afternoon's report, then Thursday's cash market could potentially see more hogs traded. August lean hogs are down $0.45 at $101.20, October lean hogs are down $1.15 at $83.25 and December lean hogs are down $0.87 at $76.12.

The projected lean hog index is delayed from the source. Hog prices are higher on the Daily Direct Morning Hog Report, up $3.97 with a weighted average price of $106.15, ranging from $90.00 to $108.00 on 8,263 head and a five-day rolling average of $104.24. Pork cutouts total 137.74 loads with 124.43 loads of pork cuts and 13.31 loads of trim. Pork cutout values: down $0.09, $112.97.

Wednesday Morning Livestock Market Update - Cash Uncertainty Dominates Trading Activity

GENERAL COMMENTS:

Live cattle just could not find the support they needed to trigger the buying interest of traders Tuesday. Technically, the market is negative as there have been three days of lower highs and lower lows in futures. The greater issue seems to be the potential for cash this week. Even if cash is steady with last week, it should not be negative for the market. However, the psychological aspect can have significant implications for a time. Cattle futures were ripe for a price retracement and are now getting it. This certainly does not mean fundamentals have changed and cash prices will likely hold or move higher, but the perception of traders influences the market. Cash is not expected to trade until late in the week. Boxed beef closed higher in both categories with choice up $0.06 and select up $0.56. Feeder cattle auctions show weakness this week due to hot weather and extremely high prices.

August hogs were able to make a new contract high Tuesday as underlying fundamentals remain supportive for price over the next few weeks. The National Direct Afternoon Hog report showed cash up $0.91. If the recent pattern holds, we should see higher cash again Wednesday. However, futures might be pressured due to the large drop of $4.15 in cutout values. The June Cold Storage report showed pork inventory down 9% from June 2022 with bellies up 33% from a year ago. This is neutral to the market.

	BULL SIDE		BEAR SIDE
1)	Once the market makes its correction, it may move higher as cattle supplies remain tight. The top has likely not been reached.	1)	Three days of lower highs and lower lows in cattle futures could keep the market under pressure for the near term as technical traders sell the market.
2)	Food prices are higher but that has not had much impact on overall beef demand relative to cattle supplies. Boxed beef has been weakening and slaughter has slowed, but packers still pay higher prices.	2)	Feeder cattle and calves are seeing lower prices at auctions this week either due to the hot weather or buyers are hesitant at the current high prices.
3)	A new contract high in August hogs points to further gains as cash and the index is higher.	3)	Later hog futures contracts are sideways to lower due to uncertainty over the impact of demand once Prop 12 is fully in force.
4)	Packers remain aggressive purchasing hogs for slaughter as summer demand remains strong. The large decline of cutouts Tuesday might have been temporary.	4)	Hog futures may trade lower Wednesday in response to the large decline of cutouts Tuesday.

Tuesday Closing Livestock Market Update - Cheaper Corn Allows Hogs to Trade Higher

GENERAL COMMENTS:

It was another mixed market for the livestock complex as traders were OK running the lean hog contracts higher, but remained hesitant of overly supporting the cattle contracts. Hog prices closed higher on the Daily Direct Afternoon Hog Report up $0.91 with a weighted average price of $105.73 on 4,685 head. December corn is down 3 cents per bushel and December soybean meal is up $4.50. The Dow Jones Industrial Average is up 26.83 points.

The USDA Cold Storage report shared that total red meat supplies in freezers were down 6% from the previous month and down 14% from last year. Total pounds of beef in freezers were down 3% from the previous month and down 20% from last year. Frozen pork supplies were down 8% from the previous month and down 9% from last year. Stocks of pork bellies were down 14% from last month but up 33% from last year.

LIVE CATTLE:

It was another day of lower closes for the live cattle contracts as traders simply lacked the gusto to push prices higher through Tuesday's market. It's fair that traders are skeptical of supporting the complex ahead of seeing what this week's cash cattle trade amounts to, but Tuesday's Cold Storage report should comfort traders as knowing that frozen beef supplies in freezers is down 20% compared to a year ago means that packers will have to keep a relatively steady kill schedule. Packers are trying to gain power over the cash market by reducing their kill schedule so that they'll need less cash cattle, but with boxed beef prices continuing to show high demand, packers could be pushed into supporting the cash market more than they'd like. August live cattle closed $0.45 lower at $178.30, October live cattle closed $0.70 lower at $179.60 and December live cattle closed $1.02 lower at $183.30. No cash cattle trade developed throughout the day and trade is likely to be delayed until Thursday or Friday again this week. 

Tuesday's slaughter is estimated at 125,000 head, 2,000 head less than a week ago and steady with a year ago. Monday's slaughter was revised to 122,000 head.

Boxed beef prices closed higher: choice up $0.06 ($304.22) and select up $0.56 ($277.55) with a movement of 149 loads (91.07 loads of choice, 28.49 loads of select, 9.29 loads of trim and 20.55 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady. It's going to be a coin toss again this week in who wins the weekly cash cattle battle: feedlot managers or packers.

FEEDER CATTLE:

Even though the corn complex kept with its lower position throughout Tuesday, the nearby feeder cattle contracts still closed lower. Without the support of a steady to somewhat higher live cattle complex, traders felt vulnerable in Tuesday's market and elected to play it safe as opposed to risking their technical position. The deferred contracts of 2024 had no trouble closing higher, but given the time of year that it is, corn continues to be a wild card that traders know they'll have to dance with again and again until this year's harvest is complete. August feeders closed $0.02 lower at $243.22, September feeders closed $0.27 lower at $246.35 and October feeders closed $0.27 lower at $248.40. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers traded steady to $4.00 lower with most of the decline on steers weighing over 800 pounds. Feeder heifers traded steady to $2.00 lower. Demand was moderate for feeder cattle. Steer calves traded $5.00 to $10.00 lower with the market's biggest losses seen on unweaned or short weaned calves. Heifer calves traded $4.00 to $8.00 lower. It was extremely noticeable in this week's sale that buyers were leery of buying short weaned or unweaned calves amid the sweltering summer temperatures that are in the area. Feeder cattle supply over 600 pounds was 64%. The CME Feeder Cattle Index for July 24: down $0.31, $241.62.

LEAN HOGS:

The lean hog market's behavior was somewhat odd throughout the day and could leave the market with some things to sort out come Wednesday. On the bright side, traders saw the opportunity in futures complex to trade the contracts higher now that corn prices weren't posing as much of a threat. What could hinder Wednesday's ability to keep trading higher is the fact that pork cutout values fell over $4.00 lower Tuesday afternoon. The big $14.38 decline in the belly was largely to blame for the carcass price's weakness, but regardless, a sharply lower cutout close could make traders hesitant on Wednesday. August lean hogs closed $1.55 higher at $101.65, October lean hogs closed $1.72 higher at $84.37 and December lean hogs closed $1.30 higher at $77.00. Pork cutouts totaled 381.57 loads with 336.00 loads of pork cuts and 45.57 loads of trim. Pork cutout values: down $4.15, $113.06. Tuesday's slaughter is estimated at 477,000 head, 17,000 head more than a week ago and 9,000 head more than a year ago. The CME Lean Hog Index for July 21: up $0.54, $104.60.

WEDNESDAY'S HOG CALL: Steady to somewhat higher. Packers will need to buy a sizeable volume of hogs at some point this week, but with pork cutout values being down Tuesday afternoon, they could be hesitant to jump too wildly into Wednesday's market.

Tuesday Midday Livestock Market Update - Traders Remain Cautious Players in Cattle Complex

GENERAL COMMENTS:

The livestock complex is trading mixed as traders acknowledge the downturn in corn prices but are remaining hesitant in the cattle contracts. Meanwhile, the lean hog market is back to trading higher as traders deem the slight up tick in pork cutout values as enough support to merit higher trader in their market. December corn is down 6 3/4 cents per bushel and December soybean meal is up $1.90. The Dow Jones Industrial Average is up 55.14 points.

LIVE CATTLE:

It's another dreary day for the live cattle complex as the contracts continue to fall lower. Tuesday's weaker market can't be blamed on corn prices, as they're trading lower, but the aftermath of last week's Cattle on Feed report still has some traders skeptical, especially when they know this week's cash market could be up against some pressure with packers purchasing a sizeable volume last week. The market is seeing better support from boxed beef prices as both choice and select cuts are up Tuesday morning, and consumers are remaining active at the meat counter. August live cattle are down $0.30 at $178.47, October live cattle are down $0.45 at $179.85 and December live cattle are down $0.75 at $183.57. The cash cattle market hasn't seen a lick of interest develop and trade will likely be delayed until late in the week again.

Boxed beef prices are higher: choice up $1.78 ($305.94) and select up $1.61 ($278.60) with a movement of 85 loads (49.36 loads of choice, 15.71 loads of select, 9.24 loads of trim and 10.52 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts are toying with the idea of trading higher as it seems like a grand opportunity to do so given that corn prices are trading lower, but then again traders are wondering if that's really a wise choice when the live cattle contracts aren't pushing higher. Nevertheless, the nearby feeder cattle contracts are trading slightly lower while the deferred contracts are rallying modestly. With the CME Feeder Cattle Index able to close at $241.93 Monday afternoon, it's wildly apparent that demand for feeders isn't an issue in the countryside. Traders just need reassured that they can put Friday's Cattle on Feed report behind them and once again trade the market's strong fundamentals. August feeders are up $0.02 at $243.27, September feeders are down $0.10 at $246.52 and October feeders are down $0.12 at $248.55.

LEAN HOGS:

The lean hog complex isn't wasting any time in Tuesday's market as traders see the slight uptick pork cutout prices as a positive sign along with the slight descent in corn prices. Still, the cash hog market hasn't seen much interest as packers are holding off to really buy in this week's market. August lean hogs are up $1.22 at $101.32, October lean hogs are up $1.40 at $84.05 and December lean hogs are up $0.97 at $76.67.

The projected lean hog index for July 24 is up $0.66 at $105.26, and the actual index for July 21 is up $0.56 at $104.60. Hog prices are higher on the Daily Direct Morning Hog Report, up $3.71 with a weighted average price of $102.18, ranging from $96.00 to $105.00 on 680 head and a five-day rolling average of $102.35. Pork cutouts total 188.90 loads with 171.23 loads of pork cuts and 17.66 loads of trim. Pork cutout values: up $0.37, $117.58.

Tuesday Morning Livestock Market Update - Futures May Find Support

GENERAL COMMENTS:

Cattle tried to rally after initially opening lower but succumbed to selling pressure at midmorning as strong corn futures exhibited pressure as traders traded the correlation. Packers have reduced slaughter in the attempt to back up supplies of cattle somewhat and hopefully raise boxed beef prices and improve margins. Feedlots have played hardball the past few weeks and have benefited from it. Cattle supplies are tight and will not change anytime soon. Business is not expected to be accomplished until late in the week. Boxed beef prices were higher in both categories with choice up $1.42 and select up $0.26. USDA will release the June Cold Storage report Tuesday, showing the amount of beef in storage.

Hog fundamentals ended Monday very strong with cash up $3.79 on the National Daily Direct Afternoon Hog report and cutouts up $1.96. The midday cash report did not look too promising, but packers became more aggressive as the day progressed. Futures were influenced by the strong grain prices and spread trading, which put pressure on October and December. Demand is holding well for now, but traders remain concerned over demand late in the year.

	BULL SIDE		BEAR SIDE
1)	Lower corn futures overnight should increase the buying interest of those who trade that correlation. Cattle fundamentals are not bearish overall.	1)	If packers were able to purchase sufficient cattle for deferred delivery last week, they may not need to be aggressive this week.
2)	Feedlots will hold again this week for no less than steady cash with the goal of seeing cash a bit better.	2)	If beef increased in cold storage last month, it would indicate demand is being met and supplies are building. This could temper some of the potential for beef prices.
3)	Hog futures should trade higher in response to both higher cash and cutouts Monday.	3)	The potential bearishness of demand later in the year remains a cloud over the market, leaving December holding nearly a $25.00 discount.
4)	Strong demand should continue to provide overall support to the hog market in the near term.	4)	The amount of pork in cold storage may be higher than desired, leaving the market with limited upside potential.

Monday Closing Livestock Market Update - Higher Corn Prices Keep Contracts at Bay

GENERAL COMMENTS:

The livestock complex's biggest focus Monday was the spike in corn prices. Heading into Tuesday's market, both the cattle and hog contracts are hopeful that fundamental support will strengthen and that corn prices will level out, but only time will tell. Hog prices are unavailable on the Daily Direct Afternoon Hog Report due to packer submission problems. December corn is up 32 cents per bushel and December soybean meal is up $3.10. The Dow Jones Industrial Average is up 183.55 points.

LIVE CATTLE:

The live cattle complex closed the same way that it traded throughout the day -- with the nearby contracts trending slightly lower while the deferred contracts rallied on. After seeing just how many cattle packers got bought last week, 86,678 head, the big unknown question likely to linger throughout this week's market is: Do packers still need more cattle? Packers are throwing every card they have at trying to slow down the cash cattle market's momentum, and currently the biggest hinderance to feedlots' desire to keep cash prices trading higher are the reduced slaughter speeds. Feedlots remain current with their showlists but depending on how long packers run these slower kill speeds, the fear is that supplies could build. Feedlots aren't in immediate risk of this scenario, however, as, like mentioned before, their showlists are extremely current and packers aren't sitting on a big pile of cold storage. In order to capitalize on these strong box prices, packers are going to need to harvest the meat daily for consumers. August live cattle closed $1.27 lower at $178.75, October live cattle closed $1.60 lower at $180.30 and December live cattle closed $0.85 lower at $184.32.

Monday's slaughter is estimated at 126,000 head, 6,000 head more than a week ago and 3,000 head more than a year ago. Friday's slaughter was revised to 114,000 head. New Showlists appear to be lower in all major feeding states.

Last week's cash cattle trade waited to again develop until Thursday and Friday. Southern live cattle trade traded from $180 to $187, but mostly at $180, which is $2.00 higher than the prior week's weighted average. Northern dressed cattle traded for $290 to $300 but mostly at $295, which is $3.00 higher than the prior week's weighted average. Last week's negotiated cash cattle trade totaled 86,678 head. Of that, 76% (65,773 head) were committed to the nearby delivery, while the remaining 24% (20,905 head) were committed to the deferred delivery.

Boxed beef prices closed higher: choice up $1.42 ($304.16) and select up $0.26 ($276.99) with a movement of 99 loads (37.16 loads of choice, 37.88 loads of select, 7.89 loads of trim and 16.01 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady. Given that packers were able to buy quite a few cattle in last week's market, feedlots may not be able to push prices higher this week but could still be able to potentially hold the market steady.

FEEDER CATTLE:

With the nearby corn contracts closing $0.30 to $0.33 higher, and traders still trying to grasp whether or not Friday's placement data on the Cattle on Feed report is true, the feeder cattle market had a lot of pressuring business to sort through in Monday's market. The combination of sharply higher corn prices amid a burdensome COF report left feeders will little choice but to close lower, and close lower is exactly what the market did. August feeders closed $2.67 lower at $243.25, September feeders closed $2.65 lower at $246.62 and October feeders closed $2.32 lower at $248.67. With demand still alive and well in the countryside for feeders, the futures complex's biggest hindrance is wild corn prices. Traders and cattlemen alike will continue to monitor corn prices closely. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, feeder steers sold steady and feeder heifers sold steady to $5.00 higher with most of the gain seen on heifers weighing over 525 pounds. Feeder cattle supply over 600 pounds was 55%. The CME Feeder Cattle Index for July 21: up $2.97, $241.93.

LEAN HOGS:

The lean hog complex wasn't able to celebrate much by Monday's end as the futures complex closed lower, and the market seemed uninterested in taking any support from the uptick in pork cutout values. Pork producers, like cattlemen, are closely watching feed prices too as penciling a profitable breakeven in this year's market has been extremely challenging. And, with the wild roller coaster of emotions that corn prices have been casting onto the livestock markets, it's really no surprise that the lean hog contracts closed lower. August lean hogs closed $0.57 lower at $100.10, October lean hogs closed $1.60 lower at $82.65 and December lean hogs closed $1.12 lower at $75.70. Yes, pork cutout values did close higher but, largely, the $9.30 jump in the belly skewed the carcass prices. Pork cutouts totaled 237.54 loads with 218.76 loads of pork cuts and 18.78 loads of trim. Pork cutout values: up $1.96, $117.21. Monday's slaughter is estimated at 456,000 head, 7,000 head more than a week ago and 4,000 head more than a year ago. The CME Lean Hog Index for July 20: up $0.44, $104.04.

TUESDAY'S HOG CALL: Steady to somewhat higher. Packers could elect to be more aggressive in Tuesday's cash market or they could delay buying until Wednesday/Thursday once they have a better grasp on what pork demand is going to do this week.

Monday Midday Livestock Market Summary - Higher Corn Prices Keep Contracts Lower

GENERAL COMMENTS:

The livestock complex is largely struggling through Monday morning's trade as traders rock back in shock of sharply higher corn prices and as they try to continue to make sense of last Friday's Cattle on Feed report. It wouldn't be surprising to see the nearby contracts in the three livestock markets close with this pressured tone as traders are struggling to find any support. December corn is up 25 1/4 cents per bushel and December soybean meal is up $0.30. The Dow Jones Industrial Average is up 205.29 points.

LIVE CATTLE:

The nearby live cattle contracts are trading lower as traders are still trying to make sense of last Friday's Cattle on Feed report, but the deferred contracts are having no issue trading higher. August live cattle are down $0.25 at $179.77 and October live cattle are down $0.42 at $181.47 and December live cattle are steady at $185.17. The nearby contracts could be pressured throughout the day until more substantial support develops from the cash market, or potentially from stronger box prices. New Showlists appear to be lower in all major feeding states.

Last week's cash cattle trade waited to again develop until Thursday and Friday. Southern live cattle trade traded from $180 to $187, but mostly at $180, which is $2.00 higher than the prior week's weighted average. Northern dressed cattle traded for $290 to $300 but mostly at $295, which is $3.00 higher than the prior week's weighted average.

Boxed beef prices are higher: choice up $0.82 ($303.56) and select up $1.61 ($278.34) with a movement of 48 loads (17.28 loads of choice, 19.33 loads of select, zero loads of trim and 11.84 loads of ground beef).

FEEDER CATTLE:

With corn prices rallying a whopping $0.24 to $0.26, the feeder cattle complex is trading lower as it manages both higher corn prices and the pressure of last week's higher placements on the Cattle on Feed report. August feeders are down $1.42 at $244.50, September feeders are down $1.07 at $248.20 and October feeders are down $0.77 at $250.22. Today Northern Livestock Video Auction kicks off their four day, Summertime Classic video auction where 160,000 head of cattle will sell and right at 18,500 sheep. It will be interesting to see if prices stay in line with the trend already established this summer or if the shortage of feeder cattle will encourage buyers to bid feeders even higher.

LEAN HOGS:

Last Friday the lean hog complex bowed down to the resistance at $85.00, and, again Monday, the spot October contract isn't blowing past that resistance threshold as it continues to trade lower. Not only do traders want to see more followed through support in terms of strong pork demand, but these higher corn prices are burdensome as well. August lean hogs are up $0.15 at $100.82, October lean hogs are down $0.97 at $83.30 and December lean hogs are down $0.72 76.10.

The projected lean hog index for July 21 is up $0.56 at $104.60 and the actual index for July 20 is up $0.44 at $104.04. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.85 with a weighted average price of $98.47, ranging from $96.00 to $103.00 on 429 head and a five-day rolling average of $102.85. Pork cutouts total 130.40 loads with 117.78 loads of pork cuts and 12.62 loads of trim. Pork cutout values: up $3.31, $118.56.

Monday Morning Livestock Market Update - Selling Pressure in Cattle Futures Expected

GENERAL COMMENTS:

Cash cattle traded higher last week with Southern live cattle averaging $2.00 higher and Northern dressed cattle $3.50 higher. The market already had that factored in, leaving traders turning their attention to the Cattle on Feed report. The report many times carries a surprise and this one was no exception. The bearish category was placements in June at 3% above a year ago. That number was even above the highest trade estimate. This would put pressure on futures Monday. On top of that, there will be a strong corn market as hot weather moves into the Midwest this week with areas lacking moisture. On feed numbers on July 1 were 2% below a year ago with marketings 5% below a year ago. Both of these were in line with trade expectations. The Cattle Inventory report was in line with expectations at 3% less than a year ago. Both feeder cattle and live cattle futures are expected to open lower due to the report and strong corn futures. The Commitments of Traders report showed funds selling 3,330 futures contracts, trimming their net-long positions to 113,815 futures. Feeder cattle showed an increase of 252 long positions to 16,013 net-long positions.

Hog futures settled back a little into the weekend as packers were not aggressive to end the week. Futures tried to move higher, adding to the gains of Thursday, but lower cash did not provide much support. The National Direct Afternoon Hog report showed a decline of $3.26 with a weighted average of $106.25. Even with the decline, it remains a very good price considering where it was two months ago. Cutouts were able to close higher with a gain of $0.15. Packers may be a bit more aggressive Monday as they want to get hogs on the books early in the week. The Commitment of Traders report showed funds increasing their long positions by 374 futures contracts, bringing their net-long positions to 26,186 contracts.

	BULL SIDE		BEAR SIDE
1)	The number of cattle on feed on July 1 was 2% below a year ago, which supports continued tight numbers for some time.	1)	Cattle placements 3% above a year ago according to the Cattle of Feed report will be negative to the market Monday and maybe for a couple of days.
2)	Higher cash last week will give feedlots the confidence to look for more this week as holding out caused packers to step up and pay more.	2)	Strong corn prices overnight will put significant pressure on feeder cattle, which will also pressure live cattle.
3)	Hog numbers have tightened and demand has been good, keeping packers aggressive for much of the week. They should remain that way again this week.	3)	Deferred hog futures continue to lag as uncertainty over demand by the end of the year is a cloud hanging over the market.
4)	Hot weather might slow hog movement and increase buying interest so packers make sure they will get the hogs they need.	4)	The market will need to prove itself before later contracts will find strength to reduce the large discount they currently contain.

July 1 Cattle on Feed Down 2%; July 1 Cattle Inventory Down 3%

 

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.2 million head on July 1, 2023, 2% below July 1, 2022, according to USDA NASS.

OMAHA (DTN) -- All cattle and calves in the United States on July 1, 2023, totaled 95.9 million head, 3% below the 98.6 million head on July 1, 2022, USDA NASS reported in its biannual Cattle Inventory report on Friday.

All cows and heifers that have calved totaled 38.8 million head, 2% below the 39.6 million head on July 1, 2022.

Beef cows, at 29.4 million head, down 3% from a year ago. Milk cows, at 9.40 million head, are unchanged from the previous year.

All heifers 500 pounds and over on July 1, 2023, totaled 15.0 million head, 4% below the 15.6 million head on July 1, 2022. Beef replacement heifers, at 4.05 million head, down 2% from a year ago. Milk replacement heifers, at 3.65 million head, down 3% from the previous year. Other heifers, at 7.30 million head, 5% below a year earlier.

Steers 500 pounds and over on July 1, 2023, totaled 13.9 million head, down 3% from July 1, 2022.

Bulls 500 pounds and over on July 1, 2023, totaled 1.90 million head, down 5% from the previous year.

Calves under 500 pounds on July 1, 2023, totaled 26.3 million head, down 3% from a year earlier.

Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 13.1 million head on July 1, 2023, down 2% from the previous year. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 85.5% of the total cattle on feed on July 1, 2023, up slightly from previous year. The total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots), at 34.4 million head, down 4% from the 35.7 million head on July 1, 2022.

CALF CROP DOWN 2%

The 2023 calf crop in the United States is expected to be 33.8 million head, down 2% from last year. Calves born during the first half of 2023 are estimated at 24.8 million head, down 2% from the first half of 2022. An additional 9.00 million calves are expected to be born during the second half of 2023.

**

JULY 1 CATTLE ON FEED

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.2 million head on July 1, 2023. The inventory was 2% below July 1, 2022. The inventory included 6.73 million steers and steer calves, down 3% from the previous year. This group accounted for 60% of the total inventory. Heifers and heifer calves accounted for 4.47 million head, unchanged from 2022.

Placements in feedlots during June totaled 1.68 million head, 3% above 2022. Net placements were 1.61 million head. During June, placements of cattle and calves weighing less than 600 pounds were 390,000 head, 600-699 pounds were 275,000 head, 700-799 pounds were 380,000 head, 800-899 pounds were 368,000 head, 900-999 pounds were 185,000 head, and 1,000 pounds and greater were 80,000 head.

Marketings of fed cattle during June totaled 1.96 million head, 5% below 2022.

Other disappearance totaled 69,000 head during June, unchanged from 2022.

DTN ANALYSIS

"Friday's Cattle on Feed report will be viewed as problematic as, once again, the placement division of the report fell outside analysts' estimates," said DTN Livestock Analyst ShayLe Stewart. "Placements were forecast to range anywhere from 96% to 100%, but came in at 1.68 million head, which is 3% more than compared to a year ago. So, what gives? Is USDA off in its findings, or were there really that many cattle placed in June? (Please note that it's also important to remember that last month's placements were up 5% compared to last year as well).

"So, again, can it be true? Have there really been that many cattle placed here recently? I'm going to remain cautious until we see what next month's Cattle on Feed report prints because the only way that this data can be sound and true is if we see a drastic fall-off in placements next month or shortly after. Feeder cattle imports from Mexico, especially, are higher than a year ago, which will bolster placement numbers. And producers have been capitalizing on the market's strength, and many have elected to market their cattle earlier than normal to ensure they receive these high prices.

"Compared to a year ago, the only weight divisions that saw greater placements were on the feeders weighing under 600 pounds, those weighing 600 to 699 pounds, those weighing 700 to 799 pounds, and those weighing 900 to 999 pounds. So, placements were fairly steady across the board in terms of weights. The states that saw an increase in placements compared to a year ago were Arizona (up 19%), California (up 14%), Idaho (up 14%), Iowa (up 3%), Kansas (up 5%), Minnesota (up 30%), Nebraska (up 5%), Oklahoma (up 39%), and Washington (up 3%). What sticks out to me about the placement data in terms of the state-by-state breakdown is that 1) states that are apt to receive more Southern border cattle saw big placement jumps, Arizona and Oklahoma, and 2) states that are still battling drought constraints saw greater placements as well.

"But, as mentioned before, the only way this can be true is if placements fall drastically next month, or shortly thereafter, as the U.S. has a smaller calf crop this year.

"Unlike the Cattle on Feed report, the midyear Cattle Inventory report should be viewed as supportive, as the U.S. beef cow herd is smaller than a year ago (down 3% compared to last year), and with beef replacement females down as well (down 2% compared to last year), it's evident that, largely, producers haven't started to build back their cow herd just yet.

"So, in conclusion, Friday's USDA cattle reports were a mixed bag for the cattle complex. It's likely that traders elect to focus on the Cattle on Feed report more than the Cattle Inventory report on Monday, as the biannual report never attracts as much attention as the January report does. Both the live cattle and feeder cattle contracts could be pressured on Monday because of the unexpected spike in placements," Stewart said.

U.S. Cattle Inventory by Class and Calf Crop -- July 1, 2023
	2023	Percent of
	(1,000 head)	previous year
Cattle and calves	95,900	97%
Cows and heifers that have calved	38,800	98%
Beef cows	29,400	97%
Milk cows	9,400	100%
Heifers 500 pounds and over	15,000	96%
For beef cow replacement	4,050	98%
For milk cow replacement	3,650	97%
Other heifers	7,300	95%
Steers 500 pounds and over	13,900	97%
Bulls 500 pounds and over	1,900	95%
Calves under 500 pounds	26,300	97%
Calf crop	13,100	98%
Cattle on feed	33,800	98%

**

	USDA Actual	Average Estimate	Range
On Feed July 1	98%	97.6%	97.1-98.1%
Placed in June	103%	97.8%	96.0-100.0%
Marketed in June	95%	95.3%	94.9-96.0%