What a week it was! The corn market bounced around as it juggled news from the USDA reports to weather developments, all of which has serious ramifications for the cattle complex. Even so, both the live cattle and feeder cattle contracts closed higher by Friday's end. The real champion of this week's marketplace are the feedlot managers who continue to keep the cash cattle market strong even though the seasonal pressures of July. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.63 with a weighted average price of $99.91 on 6,037 head. December corn is up 13 1/4 cents per bushel and December soybean meal is up $1.10. The Dow Jones Industrial Average is up 99.30 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle up $3.18, October live cattle up $3.25; August feeder cattle up $1.22, September feeder cattle up $0.63; July lean hogs up $2.98, August lean hogs up $1.05; July corn up $0.39, September corn up $0.19.
LIVE CATTLE:
What sticks out to me more than potentially anything else this week is how the cash cattle market really does champion finding true price discovery in the marketplace. If feedlot managers wouldn't have been willing to go toe to toe with packers this past week, nobody would have fought for higher prices! It's because feedlot managers put in the work to market their showlists to the absolute best of their abilities that prices were able to trade higher this past week. And, as of Friday afternoon, Southern cattle still haven't traded. The only USDA trade that's been reported is a few head in Nebraska at $290 to $292, which is $1.00 to $3.00 higher than last week's weighted average. The rest of the country remains quiet, patiently waiting to see if packers are going to get more serious about bidding cattle late this afternoon or if the game will continue into next week. Time will only tell, but feedlots gave packers hell this past week.
The rallying spirit of the cash cattle market helped push the live cattle contracts higher and even pushed the spot August contract to yet another new contract higher. August live cattle closed $3.27 higher at $180.17, October live cattle closed $2.52 higher at $182.62 and December live cattle closed $2.40 higher at $185.77.
Friday's slaughter is estimated at 121,000 head, 4,000 head less than a week ago and 1,000 head more than a year ago. Saturday's slaughter is projected to be around 8,000 head. The week's estimated slaughter totals 633,000 head, incomparable to last week but 40,000 head less than a year ago.
Boxed beef prices closed lower: choice down $0.97 ($305.94) and select down $3.57 ($276.61) with a movement of 136 loads (65.09 loads of choice, 30.37 loads of select, 20.05 loads of trim and 20.50 loads of ground beef).
MONDAY'S CATTLE CALL: Steady to somewhat higher. It's tough to call next week's market before seeing how all the chips land this week, but what I'm sure of is that feedlots aren't going to trade cattle substantially lower.
FEEDER CATTLE:
Even though the nearby corn contracts closed $0.06 to $0.13 higher, traders found it more encouraging that feedlot managers were willing to wait until the week's very end, or even roll over their showlists if need be, as opposed to marketing their pens for lower money. The rallying spirit of the cash cattle market only emboldens the feeder cattle complex more as cow-calf producers are hopeful the aggressive buying nature that sales are reporting now will hold through the year's end. And, with supplies are thin as they are, it's looking like that wish could become reality for many producers. August feeders closed $1.65 higher at $246.65, September feeders closed $1.90 higher at $249.22 and October feeders closed $1.90 higher at $250.47. Oklahoma's Weekly Cattle Auction Summary shared that, compared to last week and throughout the entire state, feeder steers and heifers traded $4.00 to $10.00 higher and that demand was excellent for feeder cattle. Steer calves sold $20.00 higher expect those weighing 400 to 500 pounds, which sold $3.00 higher. Heifer calves traded $6.00 to $10.00 higher mostly. Slaughter cows sold steady to $4.00 higher and slaughter bulls traded $1.00 higher Feeder cattle supply over 600 pounds was 61%. The CME Feeder Cattle Index for July 13: not available at this time.
LEAN HOGS:
The lean hog complex closed mostly higher with just a few of the nearby contracts rounding out the day slightly lower. August lean hogs closed $0.30 lower at $96.20, October lean hogs closed $0.25 higher at $83.60 and December lean hogs closed $0.30 higher at $76.35. Friday afternoon's pork cutout report was insightful as it wasn't just the belly that contributed to the carcass's higher close, but also the $12.46 jump in the ham and the $3.36 jump in the loin. Pork cutouts totaled 239.58 loads with 221.48 loads of pork cuts and 18.10 loads of trim. Pork cutout values: up $4.65, $115.55. Friday's slaughter is estimated at 460,000 head, 11,000 head less than a week ago but 28,000 head more than a year ago. Saturday's slaughter is projected to be around 33,000 head. The CME Lean Hog Index for July 12: up $0.93, $100.29.
MONDAY'S HOG CALL: Steady. It's unlikely that packers are overly aggressive on Monday as they'll want to see what early demand shapes up to be.
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