GENERAL COMMENTS:
It was a classic turnaround Tuesday in the livestock futures markets, with the cattle contracts rebuilding from Monday's losses and then adding a little more on top. Boxed beef prices have surged at the start of this week, and improving pork carcass prices and packing margins are supporting negotiated hog values. In the cash cattle market, bids and asking prices haven't been established for this week's trade, but last week was marked at mostly $179 in the South and $294 in the North. The National Direct Afternoon Hog Report showed purchased swine prices up $2.29 to a weighted average of $104.00 on 11,219 head. Prices ranged from $90 to $107, and the five-day rolling average is now $105.04. September corn moved down 7 cents to $4.97 per bushel and August soybean meal closed up $4.90 per ton to $456.10. The Dow Jones Industrial Average was up 71.02 points and the NASDAQ was down 38.99 points.
LIVE CATTLE:
Live cattle futures aren't in any danger of hitting fresh contract highs yet, but the buying enthusiasm noted during Tuesday's session suggests traders realize the strength of this market's supply-and-demand balance. The August contract closed up $1.45 at $179.50; the October contract closed up $2.30 at $181.825, and the December contract closed up $2.225 at $185.625. Futures trading volume was strong. Bids and asking prices in the cash cattle market haven't been established yet for the week, but they'll be benchmarked against last week's prices -- $179 live basis in the South and $294 dressed basis in the North. Looking at the boxed beef prices available, the expectation is that packers will want to buy fed cattle in volume at some point this week, and may have to pay up for the privilege.
Boxed beef prices were impressively higher: choice up $4.32 ($306.10) and select up $1.87 ($279.60), with a movement of 102 loads (55.74 loads of choice, 28.2 loads of select, 6 loads of trim and 11.86 loads of ground beef).
WEDNESDAY'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 led the gains in the livestock sector Tuesday and are within striking distance of fresh contract highs if more bullishness is confirmed through the beef and cattle supply chain this week. At the end of the session, the August feeder cattle contract was up $2.875 at $248.475, the September contract was up $2.70 at $251.90, and the October contract was up $2.375 at $253.40. Crop conditions and pasture conditions that continue to deteriorate, according to the nationwide weekly Crop Progress report, are a reminder that it will be a challenge for U.S. cattle producers to rebuild the herd size and calf supply in any sudden way.
LEAN HOGS:
The nearby lean hog contract almost touched $105 per cwt Tuesday and, by doing so, finally regained the level where it was trading before the big March sell-off due to other financial markets' volatility and its own long-term demand uncertainty. The August lean hog contract closed down $0.45 at $103.675; the October contract closed down $0.35 at $85.65; and the December contract closed down $0.05 at $77.25. Farther out along the calendar, some early 2024 contracts closed the session with gains, suggesting some spread trades were being unwound in profit taking near the end of the session. Outside markets are giving pork and hogs some mixed signals at the moment, with a recovering U.S. dollar pushing against long-term export price outlooks. The afternoon pork cut-out showed the overall carcass value down $1.95 to $115.26. There were 319.16 total loads (295.11 loads of cuts and 24.04 loads of trim). The CME Lean Hog Index for July 28: up $0.19, $106.00, and the projected Index for 7/31: down $0.10, $105.90.
WEDNESDAY'S CASH HOG CALL: Steady to $1 higher. Resilient pork cut-out values mean that packers can approach a tight summer hog market with strength.
No comments:
Post a Comment