GENERAL COMMENTS:
The livestock market's biggest development Tuesday was sharp losses in the corn market, which allowed feeder contracts to rally. The live cattle and lean hog contracts had a quieter day as both markets need to seek clear fundamental direction. Hog prices have no comparison on the National Direct Afternoon Hog Report, but there was a movement of 4,657 head with a weighted average of $110.23 and a five-day rolling average of $110.53. December corn is down 40 cents per bushel and December soybean meal is down $25.90. The Dow Jones Industrial Average is down 208.98 points and NASDAQ is up 24.32 points.
LIVE CATTLE:
Live cattle futures toyed with the idea of trading fully higher, and some contracts were able to close higher before the day's end, but the market wasn't completely sold on the idea. August live cattle closed $0.40 higher at $122.40, October live cattle closed $0.07 higher at $128.15 and December live cattle closed $0.22 lower at $132.55. It was surprising to see that packers bought upward of 86,000 head of cattle last week. On holiday weeks they usually don't hustle the market, but last week's purchases bought them the opportunity to lay low in the cash market in the weeks ahead. The boxed beef market was able to pull off a mixed close as opposed to fully lower, but it still is too early in the year for the market to be done with its descent. Showlists this week are fully higher in Texas and somewhat higher in Kansas, Nebraska and Colorado. Tuesday's slaughter is estimated at 122,000 head -- 2,000 head more than a week ago and 5,000 head more than a year ago. Monday's slaughter is estimated at 8,000 head. Saturday's cattle slaughter was revised to 36,000 head - 3,000 head more than what was originally stated.
Last week's negotiated cash cattle trade totaled 86,819 head. Of that 70% (60,836 head) were bought for nearby delivery; the remaining 30% (25,983 head) were purchased for the 15- to 30-day delivery period.
Boxed beef prices closed mixed: choice up $1.24 ($286.68) and select down $1.10 ($263.31) with a movement of 120 loads (75.47 loads of choice, 21.04 loads of select, 12.69 loads of trim and 11.22 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. With packers having bought upward of 86,000 head last week, they sit in a better position this week to be able to opt out of relying on the cash cattle market for their immediate needs.
FEEDER CATTLE:
The feeder cattle complex's strength only grew fiercer as the day traded on and ultimately allowed the market to post lofty $3.00 gains through nearly the entire marketplace. August feeders closed $3.57 higher at $160.62, September feeders closed $3.30 higher at $162.72 and October feeders closed $3.17 higher at $164.65. The feeder cattle market's rally stemmed from two major factors: the corn market's sharp deterioration and the anticipation of strong buying interest later this week for feeder cattle. A cooler forecast and a strong chance of rain over parts of the Midwest in the next 10 days has the entire corn complex on edge. Meanwhile cow-calf producers are praying they're fortunate enough to catch parts of the rain showers as drought conditions continue to plague many in the western part of the United States. Early this week sales will be slow to resume as getting the kinks out after being gone over the weekend takes time. But sale barns will be ready to roll full steam ahead by the latter half of the week. With last week's trade interrupted by the Fourth of July, many are anticipating this week's trade could be strong with corn trending lower and buyers having orders to fill. The CME Feeder Cattle index: not available at this time.
LEAN HOGS:
The spot July contract and the August lean hog contract both closed higher but those were the only two contracts able to attract any interest Tuesday. July lean hogs closed $1.27 higher at $109.92, August lean hogs closed $2.12 higher at $102.35 and October lean hogs closed $0.25 lower at $84.45. Packers are tired of scrounging the countryside looking for hogs and have ultimately decided it's easier to run slower processing speeds, which is evident in Tuesday's kill. Pork cutouts could see some demand over the next two weeks, especially as everyone aims to refill their coolers. But even with that demand, it's not likely packers bolster their processing levels. Tuesday's cutout load total was 321.37 -- 291.55 loads of cuts and 29.82 loads of trim. Tuesday's slaughter is estimated at 466,000 head - 5,000 head more than a week ago and 7,000 head less than a year ago. Monday's hog slaughter is estimated at 7,000 head. Friday's hog slaughter was revised to 425,000 head -- 5,000 head less than what was originally stated. The CME Lean Hog Index 7/1/2021: down $0.51, $111.26.
WEDNESDAY'S CASH HOG CALL: Steady. Packers haven't shown much interest in the market thus far this week and it's likely they could keep the trend of only buying minimally through the cash market through the week.
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