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.
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