GENERAL COMMENTS:
It's been an exciting Monday for the cattle contracts as the market frolics in superb fundamental support. Meanwhile, the lean hog market needs to see follow-through support from consumers in order to trade higher and, unfortunately, hasn't been able to draw much attention from traders as the cattle contracts earn all the attention. December corn is up 1 1/2 cents per bushel and December soybean meal is down $0.40. The Dow Jones Industrial Average is up 20.89 points and NASDAQ is down 15.23 points.
LIVE CATTLE:
Live cattle futures are rallying as the market feels extremely confident in its long-term fundamental windshield. With both Friday's Cattle on Feed report and the bi-annual Cattle Inventory report showing bullish figures, the market has every reason to be optimistic. August live cattle are up $1.82 at $123.32, October live cattle are up $1.92 at $129.07 and December live cattle are up $1.55 at $133.85. Boxed beef prices saw support creep into their lower-waning market late last week and to Monday's surprise, both choice and select cuts are trending higher again. The market will eventually see some pressure creep back into the sector as prices are still incredibly high compared to where historic figures comfortably run, but with Labor Day not that far away buyers are securing inventory. New showlists appear to be somewhat higher in Texas, higher in Kansas but lower in Nebraska/Colorado.
Last week's negotiated cash cattle trade totaled 76,804 head. Of that, 73% (56,040 head) were bought for nearby delivery while the remaining 27% (20,764 head) were bought with delivery for the following 15 to 30 days.
Boxed beef prices are higher: choice up $0.98 ($267.61) and select up $0.37 ($250.31) with movement of 51 loads (35.71 loads of choice, 11.07 loads of select, zero loads of trim and 3.77 loads of ground beef).
FEEDER CATTLE:
Following last week's exciting close, feeder cattle futures have jumped headfirst into Monday's trade full of ambition and hopefulness that the market support will sustain. August feeders are up $1.92 at $162.00, September feeders are up $2.10 at $164.62 and October feeders are up $1.70 at $166.20. The corn market has traded cautiously all day and so long as corn continues to trade mostly steady, the feeder cattle market shouldn't have any issues keeping its momentum primed through Monday's close. Looking at the August contract, specifically, with Friday closing right above the $160.00 resistance, we knew the market was going to be pressured to once again prove the contract could trade above $160; thus, seeing $162.00 currently being tested shows how much support backs the complex.
LEAN HOGS:
The lean hog market has had a tough time drawing the interest of traders Monday morning as livestock excitement flutters around the cattle contracts. But as we near the noon hour, the nearby contracts are seeing some modest support creep in and, if the day shows strong fundamentals at closing, the market could see more support in Tuesday's trade. Largely, the lean hog market wants to see strong follow-through demand from consumers. Any export hype will gladly be taken, but with domestic demand being as robust as it is and with supplies being so thin, focusing on U.S. consumers' needs is just as important at this point. August lean hogs are up $0.17 at $107.52, October lean hogs are up $0.32 at $92.95 and December lean hogs are down $0.02 at $85.55.
The projected CME Lean Hog Index for 7/22/2021 is down $0.04 at $112.21, and the actual index for 7/21/2021 is down $0.09 at $112.25. There are no comparisons on the National Direct Morning Hog Report, but 3,670 head and have been with a weighted average of $103.57, ranging from $103.00 to $108.00 and a five-day rolling average of $105.55. Pork cutouts total 148.80 loads with 139.20 loads of pork cuts and 9.60 loads of trim. Pork cutout values: up $5.20, $127.57.
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