GENERAL COMMENTS:
The livestock complex is trading fully higher into Friday afternoon as the market again found some technical support after trading lower earlier this week. No new cash cattle sales have been reported. December corn is up 4 1/4 cents per bushel and December soybean meal is down $0.80. The Dow Jones Industrial Average is up 301.68 points.
LIVE CATTLE:
After enduring some pressure earlier this week as traders panicked over the boxed beef market's seasonal turn, the complex has again found some technical support and is back to trading mildly higher. August live cattle are down $0.20 at $182.07, October live cattle are up $0.22 at $183.72 and December live cattle are up $0.12 at $185.17. It is positive to see from a technical standpoint that the spot August contract has remained above the market's 40-day moving average, again proving that although boxed beef prices have turned, the market's fundamentals remain strong. No new cash cattle sales have been reported yet Friday, but some clean-up trade wouldn't be out of the norm ahead of Friday's close. Throughout the week, Southern live cattle have traded at mostly $188, which is $2.00 to $4.00 lower than last week's weighted average and Northern dressed cattle have traded at mostly $312 which is $2.00 lower than last week's weighted average.
Friday's WASDE report was relatively supportive to both the beef and cattle markets for the rest of 2024. Beef production for 2024 was increased by 65 million pounds, although the number of cows being slaughtered has been reduced because of availability, fed steer and heifer processing speeds are expected to remain aggressive through the remainder of 2024. Quarterly steer price projections were increased for 2024 as well: 2nd quarter steer prices in 2024 are expected to average $188.42 (up $2.42 from last month), steer prices in the third quarter are expected to average $190 (up $7.00 from a month ago) and steer prices in the 4th quarter of 2024 are expected to average $188 (up $2.00 from last month). And steer prices in the first quarter of 2025 are anticipated to average $188 (up $2.00 from last month's projections). 2024 beef imports fell by 25 million pounds from last month's report, but 2024 beef exports were increased by 90 million pounds.
Boxed beef prices are mixed: choice up $0.51 ($322.16) and select down $0.21 ($303.17) with a movement of 78 loads (55.54 loads of choice, 7.72 loads of select, 3.57 loads of trim and 11.01 loads of ground beef).
FEEDER CATTLE:
Once again, the feeder cattle complex is back to trading higher as traders feel more confident in their ability to support to the feeder cattle market while the live cattle contracts are trading higher. August feeder cattle are up $1.52 at $257.67, September feeders are up $1.12 at $257.47 and October feeders are up $0.95 at $257.05. Even though temperatures are hot this week and are expected to be hot again next week, prices in sale barns and at video auction sales remain extremely high. Bawling calves are seeing a light discount amid the warmer temperatures but prices are still strong.
LEAN HOGS:
With midday pork cutout values higher and traders having finally established a new support plane they can trade above, the lean hog complex is trading fully higher Friday. August lean hogs are up $1.45 at $88.10, October lean hogs are up $0.62 at $70.02 and December lean hogs are up $0.20 at $62.27. It's unlikely the cash market will see much action this afternoon as packers were aggressive earlier this week, but even so it's likely that the market will be able to sustain this higher trend through the day's close.
The projected CME Lean Hog Index for 7/11/2024 is down $0.27 at $88.38 and the actual index for 7/10/2024 is down $0.02 at $88.65. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.72 with a weighted average price of $83.73, ranging from $79.00 to $87.00 on 1,139 head and a five-day rolling average of $87.87.84. Pork cutouts total 143.43 loads with 121.60 loads of pork cuts and 21.82 loads of trim. Pork cutout values: up $2.50, $98.73.
Friday's WASDE report showed mixed support for the pork and hog markets through the rest of 2024. 2024 pork production was increased by 35 million pounds, as not only are carcass weights expected to increase through the second half of the year, but packers are also running more aggressive chain speeds. Quarterly hog price projections were a little disheartening as the influx in supply is likely going to affect cash prices. Hog prices in the second quarter of 2024 are expected to average $65.53 (down $0.47 from last month's report), hog prices in the third quarter are expected to average $63 (down $5 from last month's report) and hog prices in the fourth quarter of 2024 are expected to average $56 (down $3.00 from June's report). And hog prices in the first quarter of 2025 are expected to average $56 (down $3.00 from last month's projections). 2024 pork imports remained unchanged at 1,213 million pounds, and pork exports for 2024 fell by 115 million pounds.
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