GENERAL COMMENTS:
All eyes and ears have intensely watched the lean hog market as confirmation of African swine fever in the Dominican Republic has been reported. Meanwhile both the live cattle and feeder cattle contracts are trading lower as the market has undermining pieces about it still. December corn is up 6 1/2 cents per bushel and December soybean meal is up $0.60. The Dow Jones Industrial Average is up 215.06 points and NASDAQ is up 57.49 points.
LIVE CATTLE:
Live cattle futures are trailing slightly lower as the market saw a lackadaisical export report and cash cattle trade is still only slowly starting to develop. August live cattle are down $0.27 at $122.82, October live cattle are down $0.30 at $128.20 and December live cattle are down $0.20 at $133.30. You could argue the market's higher boxed beef prices should be a rallying torch; and it most certainly adds positive steam to the market's current. But without seeing substantially higher cash cattle trade, the market is still left with some unsupported sides. Thus far the market has seen cattle trade in Kansas and Texas for $120, which is $1.00 higher than last week, and bids of $122 and $195 to $196 are currently being offered in Iowa and Nebraska. More trade should develop before the week's end.
Beef net sales of 22,500 metric tons (mt) reported for 2021 were down 11% from the previous week but up 28% from the prior four-week average. The three largest buyers were South Korea (8,200 mt), Japan (6,100 mt) and China (4,500 mt).
Boxed beef prices are higher: choice up $2.06 ($275.22) and select up $0.57 ($256.69) with a movement of 73 loads (26.78 loads of choice, 23.17 loads of select, 7.63 loads of trim and 15.51 loads of ground beef).
FEEDER CATTLE:
Nearby feeder cattle futures are battling lower prices as the corn market posts a modest midday rally. August feeders are down $1.07 at $159.10, September feeders are down $1.02 at $162.42 and October feeders are down $1.00 at $164.65. The feeder cattle contracts do see that the cash cattle market is trading about $1.00 higher in the South and that boxed beef prices are continuing to trade higher; but with the day's rally in the corn market, the complex is still skeptical and on edge. Lower prices will most likely be the day's fate as corn directly affects how much feeder buyers can pay for calves.
LEAN HOGS:
After tumbling lower Wednesday afternoon, the lean hog complex is posting a modest rally, seeming to regain some confidence. Late Wednesday afternoon rumors were popping up that African swine fever had been confirmed in Canada, but thankfully, those rumors weren't true and our neighbor to the north is ASF free. However, USDA did confirm that ASF has been detected in the Dominican Republic, which frankly is still too close for comfort. The U.S. currently does not import any pork from the Republic. August lean hogs are up $0.92 at $106.62, October lean hogs are up $0.05 at $89.57 and December lean hogs are up $0.65 at $82.80.
The CME Projected Lean Hog Index for 7/27/2021 is down $0.11 at $111.94 and the actual index for 7/26/2021 is down $0.17 at $112.05. Hog prices are unavailable on the National Direct Morning Hog Report due to confidentiality. However, we do know 2,840 head have sold and the five-day rolling average sits at $103.83. Pork cutouts total 115.66 loads with 96.66 loads of pork cuts and 19.00 loads of trim. Pork cutout values: up $2.40, $127.37.
Pork net sales of 38,500 mt reported for 2021 were up 57% from the previous week and 43% from the prior four-week average. The three largest buyers were Mexico (25,100 mt), Chile (3,300 mt) and Japan (3,200 mt).
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