GENERAL COMMENTS:
The livestock complex closed in a mixed manner Wednesday as the lean hog complex ran higher through the day's end, but the cattle contracts remained hesitant with no cash cattle trade having developed yet. It's a gamble to see who's going to come out on top in this week's cash cattle market with both packers and feedlot managers committed to negotiating to their fullest potential. Hog prices closed $1.66 higher on the Daily Direct Afternoon Hog Report, with a weighted average price of $98.32 on 11,645 head. December corn is steady and December soybean meal is down $2.80. The Dow Jones Industrial Average is down 119.43 points.
LIVE CATTLE:
The traders waited and waited for something to develop in the cash sector, but feedlots are digging their heels in the ground and being patient when it comes to marketing cattle this week. And, without any cattle having traded, traders remained extremely cautious through the day's end and let all of the live cattle contracts round out the day lower. August live cattle closed $1.87 lower at $174.95, October live cattle closed $1.45 lower at $177.87 and December live cattle closed $1.22 lower at $182.20. It's going to be a battle this week in the cash cattle market. Feedlots sit in a strong position given that supplies are thin and that their showlists are green, but packers are working the market from every angle that they have. With boxed beef prices being lower (choice down $5.56) and with throughput far behind a normal week's speed, it's obvious that packers are playing hard ball and trying to get ahead of this week's cash cattle market. No bids or asking prices have been listed at this point, but packer interest should improve by Thursday.
Wednesday's slaughter is estimated at 128,000 head, 2,000 head more than a week and year ago. Tuesday's slaughter is estimated at 2,000 head, and Monday's slaughter was revised to 79,000 head.
Boxed beef prices closed lower: choice down $5.56 ($322.78) and select down $1.61 ($292.69) with a movement of 101 loads (55.11 loads of choice, 24.96 loads of select, 8.03 loads of trim and 13.34 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Packers didn't get many cattle bought last week, and if they're going to avoid becoming short bought, they're going to need to buy a significant jag of cattle this week.
FEEDER CATTLE:
Yes, the nearby corn contracts closed steady to $0.09 lower, but without the support of the live cattle or cash cattle market, the feeder cattle complex ran lower through Wednesday's end. August feeders closed $3.20 lower at $244.70, September feeders closed $3.22 lower at $248.15 and October feeders closed $3.25 lower at $249.90. Most sale barns aren't having sales this week to in the Fourth of July holiday and as offerings are thin. Regular sales will resume next week. The CME Feeder Cattle Index for July 3: up $1.37, $232.78.
LEAN HOGS:
The lean hog complex only grew stronger throughout the day with the market's biggest gains being seen in the spot and nearby contracts of July and August. July lean hogs closed $3.45 higher at $101.27, August lean hogs closed $3.12 higher at $97.45 and October lean hogs closed $0.95 higher at $80.55. Traders felt completely comfortable trading the market higher as the cash market saw moderate interest (higher prices but only on 11,645 head) and pork cutout values closed over $1.00 higher. The day's carcass price was again able to close higher as the belly gained another $9.79, and the rest of the cuts danced around both sides of steady. Pork cutouts totaled 257.33 loads with 234.32 loads of pork cuts and 23.01 loads of trim. Pork cutout values: up $1.20, $109.20. Wednesday's slaughter is estimated at 476,000 head, 26,000 head more than a week ago and steady with a year ago. Tuesday's slaughter is estimated at 2,000 head. The CME Lean Hog Index for July 3: not available at this time.
THURSDAY'S HOG CALL: Steady to somewhat higher. Prices did close higher Wednesday, which could mean that they simply remain steady come Thursday, but I do expect that more hogs will need to be traded given that packers hardly participated in last week's market.
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