Friday, July 29, 2022

Friday Closing Livestock Market Update - Contracts Catch a Break and Close Higher

GENERAL COMMENTS:

Support infiltrated the livestock complex ahead of closing, but next week the markets are expecting to see renewed pressure. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.51 with a weighted average of $117.08 on 2,919 head. December corn is up 1 cent per bushel and December soybean meal is down $0.50. The Dow Jones Industrial Average is up 315.50 points.

From Friday to Friday, Livestock Futures scored the following changes: August live cattle down $0.93, October live cattle down $0.78; August feeder cattle down $2.97, September feeder cattle down $2.92; August lean hogs up $1.95, October lean hogs up $0.90; September corn up $0.52, December corn up $0.56.

LIVE CATTLE:

After a week of mostly lower trading, the live cattle complex championed a higher close by Friday's end with the help of higher boxed beef prices. August live cattle closed $0.27 higher at $136.45, October live cattle closed $0.40 higher at $142.22 and December live cattle closed $0.37 higher at $148.15. It was another week that packers dominated not only the cash market, but also the futures market as a depressed morale was the market's tone. Until packers get caught short-handed and need cattle, the cash cattle market will likely be thinly tested and at steady to lower prices, which could go on for at least another week or two. Throughout the week, the week Northern dressed cattle traded for $225, which was $2.00 lower than last week's weighted average in Nebraska, and Southern live cattle traded for $135, which was $1.00 lower than last week's weighted average.

Friday's slaughter is estimated at 124,000 head, 5,000 head more than a week ago and 8,000 head more than a year ago. Saturday's slaughter is projected to be around 50,000 head. This week's slaughter is estimated at 669,000 head, 4,000 head more than a week ago and 23,000 head more than a year ago.

Friday's Imported Meat Passed for Entry into the U.S. by country shared that the week's fresh beef imports totaled 20,692 metric tons, with Canada, Mexico and New Zealand being the biggest importers. Thus far in 2022, year-to-date fresh beef imports total 697,995 metric tons, which is 14% greater than compared to a year ago.

Boxed beef prices closed higher: choice up $1.47 ($269.24) and select up $1.44 ($242.25) with a movement of 74 loads (42.23 loads of choice, 12.76 loads of select, 7.79 loads of trim and 11.40 loads of ground beef). Throughout the week choice cuts averaged $268.45 (down $1.26 from a week ago) and select cuts averaged $242.75 (up $0.42 from a week ago) and the week's total movement of cuts, grinds and trim only totaled 523 loads.

MONDAY'S CASH CATTLE CALL: Lower. Until packers run thin of forward-bought cattle, and supplies of market-ready cattle wane, a lower tone is likely for the cash cattle market.

FEEDER CATTLE:

The feeder cattle market was pressured throughout the week by higher corn prices and a nervous futures complex. However, Friday's trade was significant for the market as the contracts drifted to the market's breakout plane but shot back higher before closing. If the complex would have tested the breakout plane and closed beneath its threshold, more pressure would have been added to the complex. However, ahead of closing, traders remembered the market's long-term trajectory and soberly viewed how strong feeder cattle sales were throughout the week and elevated the market ahead of its final bell for the week. August feeders closed $1.15 higher at $178.57, September feeders closed $1.35 higher at $181.55 and October feeders closed $1.00 higher at $183.72. Oklahoma's Weekly Cattle Auction Summary shared that throughout the week feeder steers and heifers traded $4.00 to $6.00 higher. With hotter weather, it was evident that cattle were moving off grass this past week and it seemed as though the market was nearing the end of the summer feeder run. Steer calves under 500 pounds traded $6.00 to $10.00 higher, heifer calves under 500 pounds traded $5.00 to $15.00 higher. Steer and heifer calves over 500 pounds sold $2.00 to $6.00 stronger. Slaughter cows sold steady to $5.00 higher while slaughter bulls sold unevenly steady. The CME Feeder Cattle Index for July 28: down $0.24, $172.31.

LEAN HOGS:

The lean hog complex rallied ahead of the week's close, and although pork cutout prices weren't supportive in the afternoon's data, the market still sailed higher into the weekend. August lean hogs closed $1.52 higher a $120.65, October lean hogs closed $0.90 higher at $97.22, and December lean hogs closed $0.92 higher at $87.85. Given that the market is again nearing long-term resistance, traders will likely look to the fundamental side of the market for direction. Pork cutout values will be highly sought-after next week, and the cash market is expected to perform with its usual one to two days of substantially higher trade while the other three to four days go largely untouched. Pork cutouts totaled 226.12 loads with 206.19 loads of pork cuts and 19.93 loads of trim. Pork cutout values: down $1.45, $127.34. Friday's slaughter is estimated at 437,000 head, 2,000 head more than a week ago and 13,000 head more than a year ago. Saturday's slaughter is projected to be around 9,000 head. The CME Lean Hog Index for July 27: up $0.85, $120.58.

MONDAY'S CASH HOG CALL: Lower. Given that packers have been religious about supporting the cash market only one to two days out of the week, and that time frame usually spans between Tuesday and Thursday, it's unlikely that Monday's market sees much support.




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