GENERAL COMMENTS:
It was a gruesome day for the cattle complex as today's losses were painful. And unfortunately, until external pressures simmer, the complex could remain weakened and uncertain. December corn is up 3 3/4 cents per bushel and December soybean meal is up $7.20. The Dow Jones Industrial Average is down 1,033.99 points.
LIVE CATTLE:
It was a brutal day for the live cattle market as external pressures, fear and market chaos set the complex tumbling lower. The market has been dancing with external pressures here lately (as last Thursday and Friday were strenuous days for the sector), but today's losses were widespread in the equity markets. August live cattle closed $2.55 lower at $181.55, October live cattle closed $3.07 lower at $179 and December live cattle closed $3.95 lower at $178.25. Today's close puts the spot October contract at the lowest position it's traded at since last May, and the day's lower end pushed the market far below both the 40- and 100-day moving averages -- which is also a bearish technical signal. Unfortunately, until the external pressures stabilize, this type of bearish direction is likely to remain the market's theme for the near term. Monday's slaughter is estimated at 119,000 head -- 4,000 head more than a week ago and 3,000 head less than a year ago.
Last week Southern live cattle traded at mostly $188, which is $2 lower than the previous week's weighted average, and Northern dressed cattle traded at $310 which is also $2 lower than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 69,589 head. Of that, 68% (47,185 head) were committed to the nearby delivery while the remaining 32% (22,404 head) were committed to the deferred delivery option. New showlists appear to be mixed, higher in Texas, but somewhat lower in Kansas, and lower in Nebraska/Colorado.
Boxed beef prices closed higher: Choice was up $4.17 ($317.94) and select was up $2.89 ($300.06) with a movement of 93 loads (50.63 loads of choice, 22.05 loads of select, 7.62 loads of trim and 12.74 loads of ground beef).
TUESDAY'S CATTLE CALL: Lower. With the technical pressure the market is currently facing, packers will likely be able to buy cattle cheaper this week.
FEEDER CATTLE:
It was a painful day for the feeder cattle complex as the market endured severe losses which were put into play by external market chaos. But with the Dow Jones showing weakness and concerns about the world and U.S. economies still very much so the focus on everyone's minds, the fact that live cattle market didn't offer any support left feeders with no other option but to spiral lower throughout the day. August feeders closed $5.65 lower at $244, September feeders closed $6.90 lower at $241.25 and October feeders closed $7.35 lower at $239.22. Joplin Regional Stockyards in Carthage, Missouri, compared to last week feeder steers under 625 pounds, sold $15 to $20 lower with the heavier steers selling only $4 to $7 lower. Feeder heifers traded $8 to $12 lower. The sale did note that there were several loads of unweaned, unvaccinated calves in today's offering. The CME feeder cattle index for Aug. 2: down $1.17, at $256.55.
LEAN HOGS:
The lean hog complex closed slightly lower, but its losses were nothing like the cattle complex ones. August lean hogs closed $1.05 lower at $91.15, October lean hogs closed $0.85 lower at $75.72, and December lean hogs closed $0.55 lower at $68.60. More than anything, the market elected to chop merely sideways (somewhat lower) as the fundamentals weren't strong enough to cease the markets' outside pressure and traders weren't comfortable doing anything besides trading the market lower in the chaos. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $7.16 with a weighted average price of $76.91 on 286 head. Pork cutouts totaled 277.36 loads, with 253.14 loads of pork cuts and 24.22 loads of trim. Pork cutout values: down $0.03, at $104.28. Monday's slaughter is estimated at 411,000 head -- 62,000 head less than a week ago and 7,000 head less than a year ago. The CME feeder cattle index for Aug. 1: up $0.11, at $93.64.
TUESDAY'S HOG CALL: Higher. Given that Monday's market was essentially not tested with just 286 head trading, it's likely that Tuesday's market will see better interest.
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