GENERAL COMMENTS:
It was a busy day for the livestock complex as nearly the entire market closed higher. The biggest surprise was seen in the live cattle market where support came to fruition and allowed the feeder cattle contracts to rally as well. Hog prices closed sharply higher on the National Direct Afternoon Hog Report, up $4.56 with a weighted average of $112.30 on 7,048 head. December corn is up 7 3/4 cents per bushel and December soybean meal is down $2.50. The Dow Jones Industrial Average is down 107.39 points and NASDAQ is down 55.59 points.
LIVE CATTLE:
The live cattle complex had an utterly impressive day, closing modestly higher on a day were the market was expected to endure some technical pressure. August live cattle closed $1.92 higher at $121.75, October live cattle closed $1.37 higher at $127.17 and December live cattle closed $0.92 higher at $132.30. On Monday, the August contract wasn't able to close above the 40-day moving average as traders tip-toed around the marketplace, but come Tuesday, the market had no trouble surpassing that trend. Even though boxed beef prices closed lower Tuesday afternoon, the market had a huge movement with 178 loads. Even though cash cattle prices are expected to wane, as packers see their end margin whittle away with weaker box prices, keeping the market current is incredibly important for the later part of the third and fourth quarter, which is when beef prices could demand higher levels once again. There were a handful of cattle that traded in the South at $119 to $120, and just a few cattle traded in the North at $196 to $197. Tuesday's slaughter is estimated at 121,000 head, 2,000 head more than a week ago and 4,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.66 ($273.34) and select down $2.03 ($256.74) with a movement of 178 loads (84.74 loads of choice, 49.40 loads of select, 20.33 loads of trim and 23.50 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. With boxed beef prices continuing to trail lower, and with packers still on ample supplies of forward contracted cattle, packers won't likely be pushed into higher cash cattle prices this week.
FEEDER CATTLE:
The corn contracts closed anywhere from $0.06 to $0.08 stronger in their nearby contracts, which thankfully wasn't enough of a rally to hinder the feeder cattle contracts' progress. As the calf market continues to be met with exceptional demand, and with the live cattle contracts trading confidently higher, the feeder cattle contracts saw Tuesday as a wide-open lane to capture higher prices. August feeders closed $0.67 higher at $158.82, September feeders closed $0.62 higher at $161.62 and October feeders closed $0.70 higher at $163.65. On a big run of calves at Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to two weeks ago feeder steers and heifers traded $3.00 to $5.00 higher. Steer calves sold $1.00 to $2.00 higher and heifer calves traded $3.00 to $5.00 higher. The CME Feeder Cattle Index for July 12: down $0.83, $152.99.
LEAN HOGS:
The lean hog contracts set out to accomplish a successful day as Monday gave the market substantial confidence, which obviously carried over into Tuesday's trade. August lean hogs closed $1.85 higher at $105.92, October lean hogs closed $2.05 higher at $89.37 and December lean hogs closed $1.45 higher at $82.60. Even though the market is continuing to run a slower slaughter pace, the cash market continues to point to how tight market-ready supplies of hogs are, and to the fact there's money to be made on these hog prices. Pork cutouts total 392.34 loads with 362.39 loads of pork cuts and 29.95 loads of trim. Pork cutout values: up $1.08, $118.81. Tuesday's slaughter is estimated at 464,000 head, 2,000 head less than a week ago and 5,000 head less than a year ago. Monday's hog slaughter was revised to 449,000 head, 8,000 less than what was originally stated. The CME Lean Hog Index for July 9: up $0.36, $110.10.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat lower. After pushing the market $4.56 higher, packers won't want to do that two days in a row. And with them having secured another 7,000 head in the cash market, their needs later in the week will likely be less.
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