GENERAL COMMENTS:
The livestock complex struggled again through Monday's trade as traders continue to fear looming economic pressures that, unfortunately, won't be resolved any time soon. There's a chance market fundamentals could help encourage traders to advance the cattle complex later this week if boxed beef prices continue to trade higher and if cash prices hold steady. But in uncertain times like these, traders remain cautious. December corn is up 6 1/2 cents per bushel and December soybean meal is down $5.80.
The Dow Jones Industrial Average is down 140.53 points.
LIVE CATTLE:
Even with the support of stronger boxed beef prices, the live cattle complex still closed lower Monday as traders remain skeptical about doing much in the futures complex as external pressures loom. August live cattle closed $0.92 lower at $183.32, October live cattle closed $1.12 lower at $180.02 and December live cattle closed $0.65 lower at $178.95. The market continues to fear trading above its 100-day moving average in the spot October contract as traders aren't confident there's enough support backing the market. But if box prices continue to trend steady/somewhat higher and cash prices can hold steady this week, there's a chance traders may take on the resistance. Monday's slaughter is estimated at 112,000 head -- 7,000 head less than a week ago and 6,000 head less than a year ago.
Last week Southern live cattle traded for mostly $186 to $187, which is $1.00 to $2.00 lower than the previous week's weighted average. Northern dressed cattle traded for mostly $305, which is $5.00 lower than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 76,196 head. Of that 69% (52,592 head) were committed to the nearby delivery, while the remaining 31% (23,604 head) were committed to the deferred delivery.
Monday's WASDE report was supportive to both the cattle and beef markets. Beef production for 2024 was raised by 81 million pounds as production of fed steers and heifers and cows is expected to be stronger in the second half of the year than originally anticipated. Feedlot operators should be encouraged by the forecast in quarterly steer prices as in 2024, steer prices are expected to average $193 (up $3.00 from last month), and in the fourth quarter steers prices are expected to average $190 (up $2.00 from last month). Steer prices in the first quarter of 2025 are expected to average $189 (up $1.00 from last month) and the second quarter is expected to average $190 (which is unchanged from a month ago). 2024 beef imports were raised by 42 million pounds, but beef exports for 2024 were also increased 32 million pounds as global demand remains strong.
Boxed beef prices closed higher: choice up $3.12 ($315.83) and select up $1.58 ($300.17) with a movement of 99 loads (61.38 loads of choice, 22.15 loads of select, zero loads of trim and 15.05 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. With the boxed beef market trading higher, feedlot managers could be emboldened to aim for at least steady cash prices this week.
FEEDER CATTLE:
The feeder cattle complex continues to struggle as the market is desperately in need of technical support. From a fundamental standpoint, the market hasn't seen immense changes, but rather the market's Achilles heel continues to be the board and trader leeriness. August feeder cattle closed $2.10 lower at $244.40, September feeders closed $2.10 lower at $239.50 and October feeders closed $2.05 lower at $237.72. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, feeder steers sold steady to $5.00 higher with the exception of light four-weight and three-weight calves which sold up to $30.00 higher. Feeder heifers under 525 pounds sold $10.00 to $15.00 higher with heavier weights selling mostly steady to $5.00 higher.
LEAN HOGS:
The lean hog complex was mixed throughout the day as the monthly WASDE report wasn't overly supportive, but at least afternoon pork cutout values closed higher, which hopefully remains a trend throughout the week. October lean hogs closed $0.35 higher at $74.32, December lean hogs closed $0.22 lower at $66.07 and February lean hogs closed $0.27 lower at $69.60. The afternoon carcass price was well supported by the vast majority of the cuts, but it was the bellys' $5.94 increase along with the lions' $3.01 jump that really helped the carcass price close higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.05 with a weighted average price of $82.48 on 2,915 head. Pork cutouts totaled 311.69 loads with 276.38 loads of pork cuts and 35.30 loads of trim. Pork cutout values: up $1.61, $100.27. Monday's slaughter is estimated at 483,000 head -- 72,000 head more than a week ago and 18,000 head more than a year ago. The CME Lean Hog Index 8/8/2024: down $0.90, $91.90.
Monday's WASDE was a mixed report for both the pork and hog markets. 2024 pork production was decreased by 91 million pounds as slaughter speeds are expected to be reduced in the third quarter and dressed weights are projected to be lighter as well. Quarter price projections were a mixed bag for the hog complex as prices in the third quarter of 2024 are expected to average $63 (which is unchanged from a month ago), but prices in the fourth quarter are expected to average $53 (up $1.00 from last month). Unfortunately price projections for 2025 were decreased as the first quarter of 2025 is expected to average $55 (down $1.00) and the second quarter of 2024 is expected to average $61 (down $1.00). 2024 pork imports were decreased by 25 million pounds, but pork exports also fell by 125 million pounds.
TUESDAY'S HOG CALL: Steady/somewhat higher. Packers could show a little more interest in Tuesday's cash market given that today's afternoon carcass price closed higher.
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