GENERAL COMMENTS:
Livestock contracts mostly jumped at the opportunity to close higher. The feeder cattle complex was leery early in the day but eventually mustered up enough support to move the contracts higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.24 with a weighted average of $38.43 on 6,343 head. December corn is up 2 1/4 cents per bushel and December soybean meal is up $2.80. The Dow Jones Industrial Average is up 357.96 points and NASDAQ is down 42.62 points.
LIVE CATTLE:
Monday's live cattle complex was anxious to trade higher after feeling encouraged by the market's ability to move the cash market $3.00 stronger last week on 100,000 head. Even though the market fell lower late last week, it's important to keep in perspective that these prices haven't been rallied since early March. August live cattle closed $0.80 higher at $103.60, October live cattle closed $0.70 higher at $107.15 and December live cattle closed $0.90 higher at $110.97. Cash cattle trade was painfully quiet as a few packers inquired on cattle, but with asking prices mostly undetermined, no bids were placed. The South has yet to determine their asking prices for the week, but northern cattle are priced live at $107 and dressed at $168. Monday's slaughter is estimated at 117,000 head, 4,000 head more than a week ago and 2,000 head more than a year ago.
Boxed beef prices closed higher: choice up $1.73 ($207.20) and select up $1.18 ($193.93) with a movement of 108 loads (64.05 loads of choice, 19.63 loads of select, 8.90 loads of trim and 15.23 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Feeders are going to fight tooth and nail to move the market higher again this week. Packers don't seem to intend to start lessening their weekly purchase, so, with northern feedlots mostly current, feeders may be able to move the week higher again.
FEEDER CATTLE:
Feeder cattle contracts closed higher after being fueled by the rest of livestock sector's momentum. Through Monday's initial morning hours, the feeder cattle contracts were trading mostly lower ,still feeling pressured to move away from the resistance levels that the market fell through late last week. But as the live cattle and lean hog contracts traded steadily higher, traders felt confident moving the market higher, but not above the $143.85 threshold. At Joplin Regional Stockyards in Carthage, Missouri, compared to a week ago, steers under 550 pounds sold $2.00 to $3.00 lower, steers weighing 550 to 750 pounds sold steady to $2.00 higher and steers over 750 pounds sold unevenly steady. Heifers weighing 450 pounds or less sold $2.00 to $3.00 lower, heifers weighing 450 to 700 pounds sold steady and heifers over 700 pounds sold steady to $3.00 lower. Even though prices were a little bit softer, demand was still considered good for the day's offering. Hot temperatures that have crept back into the region are putting a lot of pressure on the calves that are coming to town, especially the lighter weight calves that weren't pre-weaned. The CME feeder cattle index 8/7/2020: up $0.69, $142.61.
LEAN HOGS:
After breaking above the resistance that kept the market depressed, the lean hog contracts took the market's ambition and ran higher. October lean hogs closed $2.85 higher at $53.82, December lean hogs closed $1.77 higher at $54.70 and February lean hogs closed $0.77 higher at $61.75. Even though the pork cutout value didn't close stronger, the encouragement in higher cash hog trade is substantial ground for the market to stand on heading into Tuesday's trade, with the potential to trade higher. Monday's hog slaughter is estimated at 482,000 head, 62,000 head more than week ago and 26,000 head more than a year ago. Pork cutout totaled 385.81 loads with 356.63 loads of pork cuts and 29.19 loads of trim. Pork cutout value: down $1.86, $70.07. The CME lean hog index 8/6/2020: down $0.34, $52.44.
TUESDAY'S CASH HOG CALL: Slightly stronger. Though the market has seen packers buy well over 6,343 head in recent weeks, a movement over 6,000 head on a Monday is a good sign that packers may need more hogs as they bid aggressively early in the week.
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