GENERAL COMMENTS:
The live cattle and feeder cattle futures markets don't have much momentum this week, as the bullish supply-and-demand situation persists but no one wants to try for fresh highs without fresh news. We continue to await major volumes of cash cattle trade for the week, but for reference, last week was marked at mostly $179 in the South and $294 in the North. Meanwhile, Thursday seemed to be the day lean hog traders picked to sell off previous trend-following positions. The National Direct Afternoon Hog Report showed negotiated swine prices down $1.32 to a weighted average of $100.55 on 4,008 head. Prices ranged from $93 to $107, and the five-day rolling average is now $102.60. September corn moved down 7 1/2 cents to $4.80 3/4 per bushel and August soybean meal closed down $0.60 per ton to $451.20. The Dow Jones Industrial Average was down 67.42 points and the NASDAQ was down 17.20 points.
LIVE CATTLE:
The live cattle futures market opted for higher trade on Thursday, which left the chart in a net sideways track, awaiting indications of how strong the cash cattle can stay while beef prices flatline. The August contract closed up $0.475 at $178.50; the October contract closed up $0.80 at $181.30, and the December contract closed up $0.95 at $185.55. We haven't seen any serious volume of cash cattle trade yet this week, but there's an expectation that packers will eventually come hungry after not buying in many animals last week. For reference, last week's prices were mostly $179 live basis in the South and $294 dressed basis in the North.
Boxed beef prices were mixed: choice down $1.17 ($302.01) and select up $0.84 ($278.31), with a movement of 99 loads (56.67 loads of choice, 16.08 loads of select, 10.99 loads of trim and 15.08 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Given that packers are short bought, prices will likely turn higher this week when cattle trade.
FEEDER CATTLE:
Feeder cattle futures contracts spent the Thursday trading session decidedly higher, although trading volume was quiet compared to the past two days of outside market excitement. At the end of the session, the August feeder cattle contract was up $1.125 at $247.95, the September contract was up $1.55 at $251.65, and the October contract was up $1.575 at $253.425. Corn futures prices have been sinking this week amid a forecast for rain across the droughty Corn Belt, and cheaper feed is traditionally supportive to feeder cattle futures. However, by this point in August, serious guesses about 2023 crop yields won't suggest there will be any overabundance for the livestock sector to buy.
LEAN HOGS:
Despite poor export numbers this week, the actual pork cutout values have had some boosts. Nevertheless, the lean hog futures market seems to have run out of believers in the higher trend that has built on the charts for the past two months. The August lean hog contract closed down $1.675 at $101.00; the October contract closed down $2.825 at $82.05; and the December contract closed down $2.325 at $74.55. Belly prices and ham prices traded notably higher Thursday, but that didn't persuade the speculators in the futures market. Profit takers in the October and December lean hog futures contracts were looking beyond near-term packer profitability. The afternoon pork cut-out showed the overall carcass value up $4.00 to $115.63. There were 257.89 total loads (225.39 loads of cuts and 32.50 loads of trim). The CME Lean Hog Index for Aug. 1: down $0.10, $105.80, and the projected Index for Aug. 2: up $0.06, $105.86.
FRIDAY'S CASH HOG CALL: Steady. The break in the futures market's previous bullishness hasn't been matched by the cash hog market ... yet.
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