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.
No comments:
Post a Comment