GENERAL COMMENTS:
The cattle complex rallied throughout Monday's trade as traders saw the validity and support in last week's Cattle on Feed data. Meanwhile, the lean hog complex closed lower as traders continue to year for fundamental support, but the market continues to come up short. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.87 with a weighted average price of $91.65 on 828 head. December corn is down 10 1/2 cents per bushel and December soybean meal is up $7.50. The Dow Jones Industrial Average is down 48.80 points.
LIVE CATTLE:
The live cattle complex gapped higher at Monday's start and was able to close mildly higher thanks to the added support of last week's Cattle on Feed report. It's tough telling what this week's cash cattle market is going to do as packers would love nothing more than to continue to work the market lower, but, largely, feedlots have made that a difficult task as they're scrapping each and every week to keep the market as close to steady as possible. It's unlikely that any trade develops ahead of Wednesday and it's most likely that prices remain steady after last week's slight decline. October live cattle closed $1.05 higher at $179.87, December live cattle closed $1.12 higher at $184.30 and February live cattle closed $0.87 higher at $188.25. New showlists appear to be mixed, somewhat higher in Nebraska/Colorado, but lower in Kansas and Texas. Monday's slaughter is estimated at 122,000 head, 3,000 head more than a week ago and 1,000 head less than a year ago.
Last week's cash cattle trade began late Tuesday afternoon and continued to develop throughout the remainder of the week. Southern live cattle traded at $177 to mostly $179, which is $1.00 lower than the previous week's weighted average. Northern dressed cattle traded from $290 to $298 but most at $294 to $295, which is steady to $1.00 lower than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 72,015 head. Of that, 61% (44,153 head) were committed to the nearby delivery while the remaining 39% (27,862 head) were committed to the deferred delivery.
Boxed beef prices closed lower: choice down $0.55 ($315.56) and select down $1.03 ($287.33) with a movement of 64 loads (36.36 loads of choice, 18.15 loads of select, 4.44 loads of trim and 4.92 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Packers will attempt to work the market lower again this week, but feedlots will cling to last week's data on the COF report as a reason as to why prices should remain at least steady.
FEEDER CATTLE:
It was a near perfect Monday for the feeder cattle complex as traders jumped at the opportunity to trade last week's bullish Cattle on Feed report, and with the added encouragement of the corn market's decline, feeders skipped through Monday's close without a care in the world. September feeders closed $1.80 higher at $250.32, October feeders closed $1.95 higher at $252.65 and November feeders closed $2.10 higher at $253.52. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold steady to $2.00 lower and feeder heifers sold $2.00 to $4.00 lower. Steer and heifer calves traded steady to $3.00 lower. With extreme heat affecting most of the region, the sale seemed somewhat softer because of weather implications. The CME Feeder Cattle Index for Aug. 1: up $1.19, $245.23.
LEAN HOGS:
Traders ran the lean hog contracts sharply higher last Friday, which felt supportive at the time, but come Monday, traders seemed exhausted and in need of more reassurance. With the cash hog market seeing hardly any hogs traded, and pork cutout values closing lower, traders were left with little to no fundamental support Monday afternoon which consequently led the contracts to their lower close. October lean hogs closed $1.50 lower at $80.62, December lean hogs closed $0.77 lower at $73.72 and February lean hogs closed $0.57 lower at $78.02. Pork cutouts total 292.11 loads with 253.92 loads of pork cuts and 38.19 loads of trim. Pork cutout values: down $0.96, $105.21. Monday's slaughter is estimated at 478,000 head - 17,000 head more than a week ago and 4,000 head less than a year ago. The CME Lean Hog Index for Aug. 17: down $0.71, $99.61.
TUESDAY'S HOG CALL: Steady. Given that Monday afternoon's pork cutout report didn't show much support, Tuesday's volume will likely be bigger but prices will likely remain soft.
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