General Comments
Heading
into the noon hour of the last trading day for this week, cattle
contracts remain optimistic and the lean hog complex is split. Shortened
holiday weeks are tough because one minute the market can be as
painfully boring as attending a third-grader's recorder concert, and the
next minute you're sitting back in your chair wondering what the hell
these bullish cattle contracts are thinking! September corn is down 3
3/4 cents per bushel and December soybean meal is down $0.50. The Dow
Jones Industrial Average is up 229.12 points and NASDAQ is up 108.13
points.
LIVE CATTLE
Live
cattle prices are rallying upwards of $2.17 in nearby contracts while
live trade in Texas is developing for $93. I desperately long for the
day when our marketplace can go back to trading on sound fundamentals
because this off-the-cuff irrational denial of what the market is faced
with simply cannot be sustained. August live cattle are up $2.02 at
$99.35, October live cattle are up $2.05 at $102.72 and December live
cattle are up $1.45 at $105.95. Cash cattle trade has been relatively
quiet throughout the day with just a little bit of trade developing in
Nebraska live for $95 to $96, and in Texas for $93 live. Seeing that the
market is closing early for the 4th of July weekend, it's safe to
assume that the bulk of this week's trade is done and that only clean-up
trade will wrap up the day. This week Southern live cattle have had a
full range of $91 to $96, mostly $94 to $95, while Northern dressed
deals have had a full range of $148 to $155, mostly $153 to $155.
Thursday's
export report shared that beef net sales of 12,300 mt were reported for
2020 which was down 49% from the previous week and down 36% from the
prior four-week average. The three primary increases were from Japan
(3,800 mt including decreases of 500 mt), South Korea (2,900 mt,
including decreases of 600 mt) and Taiwan (1,700 mt, including decreases
of 100 mt).
Boxed beef prices are mixed:
choice up $0.16 ($205.54) and select down $0.13 ($198.30) with a
movement of 79 loads (42.29 loads of choice, 10.13 loads of select,
10.20 loads of trim and 16.06 loads of ground beef).
FEEDER CATTLE
Feeder
cattle contracts have had a volatile week -- enduring significant
swings in prices and not feeling secure in either direction. Heading
into the afternoon, the entire feeder cattle complex is trading higher,
ranging from $1.47 to $2.60 stronger. August feeders are up $1.80 at
$134.87, September feeders are up $2.00 at $136.02 and October feeders
are up $1.87 at $136.77. Largely the market's gumption is stemming from
the rally seen in the live cattle contracts.
LEAN HOGS
The
lean hog complex has some contracts that would rally if support and
interest would build but traders seem to me mostly checked out for the
week and with an early close, the complex's chance of building a rally
in the time the day has left is slim. July lean hogs are down $0.02 at
$44.77, August lean hogs are up $0.22 at $49.30 and October lean hogs
are down $0.32 at $47.95. The midday cutout value is up notably, just
$0.14 shy of a $4.00 jump.
Pork net sales of
39,200 mt were reported for 2020 which was up 63% from the previous week
and up 61% from the prior four-week average. The three primary
increases were from China (21,600 mt, including decreases of 900 mt),
Mexico (8,400 mt including decreases of 4,300 mt) and Japan (2,200 mt
including decreases of 300 mt).
The projected
lean hog index for 6/30/2020 is up $0.04 at $45.28, and the actual
index for 6/29/2020 is up $0.01 at $45.24. Hog prices are lower on the
National Direct Morning Hog Report, down $0.05 with a weighted average
of $28.63, ranging from $24.00 to $30.13 on 4,988 head and a five-day
rolling average of $28.61. Pork cutouts total 227.42 loads with 210.44
loads of pork cuts and 16.97 loads of trim. Pork cutout values: up
$3.86, $67.48.
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