GENERAL COMMENTS:
Monday's market was a swing and a miss for the livestock complex as all three of the markets closed lower thanks to trader cautiousness and hesitancy. It seems as though traders are simply unwilling to advance the complex ahead of see what fundamental support arises this week. December corn is up 2 1/4 cents per bushel and December soybean meal is down $1.20. The Dow Jones Industrial Average is up 27.88 points.
LIVE CATTLE:
The live cattle complex wasn't able to shake the technical pressure which plagued the entire livestock sector through Monday's trade. August live cattle closed $1.60 lower at $186.97, October live cattle closed $1.75 lower at $186.80 and December live cattle closed $1.62 lower at $187.67. After rallying to prices not seen since last October in the spot October contract, the market remains hesitant ahead of seeing what fundamental support (especially in the forms of boxed beef prices/demand, and what the cash cattle market does) arises this week. Monday's slaughter is estimated at 115,000 head -- steady with a week ago but 6,000 head less than a year ago. New showlists appear to be mixed, higher in Kansas, and Nebraska/Colorado, but lower in Texas.
Last week Northern dressed cattle traded for mostly $312 which is $2.00 higher than the previous week's weighted average, and Southern live cattle traded for mostly $190 which is also $2.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 73,164 head. Of that 79% (57,696 head) were committed to the nearby delivery, while the remaining 21% (15,468 head) were committed to the deferred delivery.
Boxed beef prices closed higher: choice up $1.04 ($314.81) and select up $4.06 ($301.52) with a movement of 145 loads (91.63 loads of choice, 22.74 loads of select, 12.50 loads of trim and 18.58 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Given that the cash cattle market traded $2.00 higher last week likely means that the market's best scenario is trading steady this week as packers desperately want the fed cash cattle market to soften to help their own margins.
FEEDER CATTLE:
The feeder cattle complex suffered the same technical pressure that the rest of the livestock market did. And without any added support from the live cattle contracts, the feeder cattle complex stood little chance of trading higher as traders seem more concerned about the direction of the live cattle contracts as opposed to what buyer demand is doing in the countryside. August feeders closed $3.27 lower at $256.42, September feeders closed $3.52 lower at $256.07 and October feeders closed $3.10 lower at $255.20. Today's descent did put the spot August contract back below both its 40-day and 100-day moving averages. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers under 775 pounds sold $3.00 to $7.00 lower while the heavier weighted steers traded steady. Feeder heifers sold $3.00 to $8.00 softer. Feeder cattle supply over 600 pounds was 67%. The CME feeder cattle index 7/26/2024: down $0.11, $258.75.
LEAN HOGS:
The lean hog complex can't blame its fundamentals for not being supportive as the reason why the market closed lower. Pork cutout values aided ample support to the hog complex, and yes, cash prices closed higher too, but given that it was only on 816 head makes it less influential. But like the rest of the livestock complex, traders kept their distance from the hog complex through Monday's trade which consequently led to a lower end. August lean hogs closed $2.02 lower at $91.45, October lean hogs closed $3.37 lower at $74.82 and December lean hogs closed $2.47 lower at $67.85. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.94 with a weighted average price of $84.07 on 816 head. Pork cutouts totaled 243.78 loads with 214.94 loads of pork cuts and 28.84 loads of trim. Pork cutout values: up $1.61, $106.78. Monday's slaughter is estimated at 482,000 head -- 29,000 head more than a week ago and 5,000 head more than a year ago. The CME feeder cattle index 7/25/2024: up $0.46, $91.85.
TUESDAY'S HOG CALL: Higher. Given that traders paid virtually no attention to Monday's market (as they only purchased 816 head) it's likely that they'll have to be more aggressive in Tuesday's cash market.
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