GENERAL COMMENTS:
It was a powerful day for the livestock complex as all three of the livestock markets were able to close higher. Come Wednesday, the market's focus will be on the WASDE report and what it expects for the rest of the year. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.50 with a weighted average price of $100.39 on 12,721 head. December corn is up 2 cents per bushel and December soybean meal is up $10.20. The Dow Jones Industrial Average is up 317.02 points.
LIVE CATTLE:
Traders took a leap of faith on Tuesday and elected to continue to support the live cattle complex based on knowing how strong the market's fundamentals are. Traders even ran the spot August contract to a new contract high before the day ended. No cash cattle trade has developed yet and it's likely that the week's trade is delayed until sometime after Wednesday. Asking prices in the South are noted at $180 to $182 but have yet to be disclosed in the North. August live cattle closed $1.62 higher at $178.82, October live cattle closed $1.77 higher at $181.72 and December live cattle closed $1.22 higher at $184.97. So long as Wednesday's WASDE report paints a promising outlook for the second half of the year, the live cattle complex should be able to maintain it's momentum.
Tuesday's slaughter is estimated at 128,000 head, incomparable to last week but 2,000 head more than a year ago. Monday's slaughter was revised to 122,000 head.
Boxed beef prices closed lower: choice down $1.67 ($312.12) and select down $2.09 ($280.24) with a movement of 161 loads (71.02 loads of choice, 52.37 loads of select, 22.41 loads of trim and 15.37 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. Packers have a plethora of committed cattle available to them in July, but to avoid becoming short bought, packers will need to support the cash market to some degree.
FEEDER CATTLE:
The feeder cattle complex traded strong throughout Tuesday's afternoon and only grew more confident in its higher trek as Tuesday afternoon neared closing time. Corn prices didn't pose much of a threat throughout the day as ultimately prices closed $0.01 to $0.02 higher which didn't damper feeder's momentum given that demand continues push prices higher in the countryside. August feeders closed $0.90 higher at $247.15, September feeders closed $0.82 higher at $250.30 and October feeders closed $0.87 higher at $252.10. Regardless, if you watched Superior's online sale throughout the day or clicked on various sale barn auctions, demand was incredibly strong for feeders and calves, but feeders especially. At Joplin Regional Stockyards in Carthage, Missouri, compared to their last sale two weeks ago, feeder steers sold $8.00 to $12.00 higher and feeder heifers traded $4.00 to $8.00 stronger. Feeder cattle supply over 600 pounds was 56%. The CME Feeder Cattle Index for July 10: down $0.33, $238.33.
LEAN HOGS:
The lean hog complex jumped into gear after Tuesday's noon hour as the nearby contracts closed anywhere from $1.00 to $3.00 higher. Part of the market's excitement stems from the continued support of steady pork demand, but then the other part of the market's excitement is in the anticipation of what Wednesday's WASDE report could bring. Long-term demand has been a question of the market, especially with Prop 12 implications looming come December. August lean hogs closed $3.40 higher at $97.57, October lean hogs closed $1.80 higher at $82.97 and December lean hogs closed $0.45 higher at $76.37. Cash hog prices were also helpful as over 12,000 head traded, and prices jumped $2.50 higher. Packers in Iowa/Minnesota were the most aggressive buyers today as their daily price jump increased by $3.05, to average $100.59. Pork cutouts totaled 296.02 loads with 275.99 loads of pork cuts and 20.02 loads of trim. Pork cutout values: up $4.04, $111.99. Tuesday's slaughter is estimated at 470,000 head, incomparable to last week but 18,000 head more than a year ago. Monday's hog slaughter was revised to 460,000 head. The CME Lean Hog Index for July 7: up $0.72, $98.15.
WEDNESDAY'S HOG CALL: Steady to somewhat higher. Packers bought more aggressively in Tuesday's cash market, but they'll still likely need to procure more hogs one Wednesday.
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