GENERAL COMMENTS:
The cattle complex only grew stronger throughout the day while the lean hog contracts remained hesitant. Stellar demand continues to send feeder cattle prices sharply higher throughout the countryside and is evident through the day's ending CME Feeder Cattle Index. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.64 with a weighted average price $97.89 on 4,459 head. December corn is up 5 cents per bushel and December soybean meal is up $2.60. The Dow Jones Industrial Average is up 209.52 points.
LIVE CATTLE:
Traders grew more confident in supporting the live cattle complex as the day traded on and ultimately pushed the spot August contract to a new contract higher before the day's end. Packers and feedlot managers are going to go to war all throughout July as neither party is willing to give up much position in this current season. Packers were able to get some cattle bought last week and committed to the deferred delivery option which helps pad their inventory and could cause some headache for the spot cash cattle market, but even so, prices shouldn't see a dramatic downturn as front-end supplies remain thin. August live cattle closed $0.20 higher at $177.20, October live cattle closed $0.57 higher at $179.95 and December live cattle closed $0.57 higher at $183.75. New showlists appear to be mixed, larger in Texas and Nebraska/Colorado, but lower in Kansas. Monday's slaughter is estimated at 125,000 head, incomparable to last week, but 3,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 75,381 head. Of that, 71% (53,371 head) were committed for the nearby delivery, while the remaining 29% (22,010 head) were committed for the deferred delivery.
Boxed beef prices closed lower: choice down $3.11 ($313.79) and select down $3.30 ($282.33) with a movement of 106 loads (53.59 loads of choice, 29.58 loads of select, 8.93 loads of trim and 14.19 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Bids and asking prices haven't been posted yet and it's likely that trade doesn't develop until after Wednesday sometime.
FEEDER CATTLE:
Even through the nearby corn contracts closed $0.05 to $0.10 higher, the feeder cattle market charged higher as demand continues to fuel its market. August feeders closed $0.82 higher at $246.25, September feeders closed $0.87 higher at $249.47 and October feeders closed $1.00 higher at $251.22. Both Superior Livestock Auction and Western Video Auction are hosting online video sales this week and thus far the sales are showing that demand continues to be incredible for all classes of cattle.
At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to their last sale two weeks ago, and at their midsession point, feeder steers were trading $3.00 to $5.00 higher and feeder heifers were trading $5.00 to $10.00 higher. Steer calves were trading $5.00 to $10.00 stronger, and heifer calves were selling $15.00 to $20.00 higher. Demand was good for feeder cattle but was exceptionally strong for calves. Feeder cattle supply over 600 pounds was 54%. The CME Feeder Cattle Index for July 7: up $7.45, $238.66.
LEAN HOGS:
The lean hog complex continued to trade lower all throughout the day as the market remains hesitant after rallying to price points not last tested since mid-March. Hog enthusiasts are hopeful that some support will be found in Wednesday's WASDE report. It was encouraging, however, to see that pork cutout values were able to close a penny better than steady, without a wild spike in belly prices. Yes, the belly did close $4.71 higher this afternoon, but that's far less dramatic than the $15.00 to $20.00 price swings that have been seen earlier this year. August lean hogs closed $0.97 lower at $94.17, October lean hogs closed $0.20 lower at $81.17 and December lean hogs closed $0.10 lower at $75.92. Pork cutouts totaled 226.34 loads with 203.94 loads of pork cuts and 22.40 loads of trim. Pork cutout values: up $0.01, $107.95. Monday's slaughter is estimated at 468,000 head, incomparable to last week but 29,000 head more than a year ago. The CME Lean Hog Index for July 6: up $1.36, $97.43.
TUESDAY'S HOG CALL: Higher. Packers didn't do much in Monday's market, which will likely mean that they need to be slightly more aggressive come Tuesday.
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