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.
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