GENERAL COMMENTS:
Even with the corn complex trending higher throughout Monday's market, the live cattle and feeder cattle contracts ran into Monday's trade aggressively. If the cattle contracts can sustain this type of energy throughout the rest of the week, the market could be looking at a powerful week where the market's trend changes. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.47 with a weighted average of $117.25 on 6,607 head. December corn is up 5 1/2 cents per bushel and December soybean meal is down $2.80. The Dow Jones Industrial Average is down 164.31 points.
LIVE CATTLE:
The live cattle contracts had a stellar day as the market jolted higher and ended up closing above the 100-day moving average. August live cattle closed $2.20 higher at $136.15, October live cattle closed $1.47 higher at $140.42 and December live cattle closed $1.42 higher at $146.50. One of the market's biggest hindrances has been the board's unwillingness to rally alongside the cash cattle market. Yes, prices have trended lower over the last two weeks, but before then the market needed the additional support of the futures complex. If the market can maintain this type of momentum, it may be the positive gesture that the cash market needs to hold prices steady. It may seem trivial to ask that prices remain steady, but as we work our way through the dog days of summer, it's important to note and realize just how strong the cash cattle market has been over the last two months and any ability to hold steady is a win for the market's seasonal trend. Thankfully showlists are still manageable thanks to aggressive processing speeds, and it's also encouraging to see that boxes printed higher throughout the day too. Bids and asking prices are still elusive at this point, and it's likely that trade doesn't develop until the latter half of the week. We know that packers have cattle committed to them for this week and next, which will limit their need to support the cash cattle market. New showlists appear to be mixed, somewhat higher in Texas, but lower in Kansas and Nebraska/Colorado.
Monday's slaughter is estimated at 125,000 head -- incomparable to a week ago but 6,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 71,515 head. Of that 68% (48,490 head) were committed for nearby delivery, while the remaining 32% (23,025 head) were committed for deferred delivery.
Boxed beef prices closed mixed: choice up $0.25 ($268.14) and select up $1.15 ($243.00) with a movement of 113 loads (61.74 loads of choice, 20.30 loads of select, 16.07 loads of trim and 15.35 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. The market traded $1.00 to $2.00 lower throughout last week's market and with temperatures trending hotter this week, feedlots may be apt to want to sell cattle more anxiously than last week. But if the board can show some promise of a rally, then maybe feedlots will bat for steady prices.
FEEDER CATTLE:
Despite the corn market rallying all throughout the day, the feeder cattle contracts still managed to close out Monday's market will a strong rally as the nearby contracts rallied $2.00 to $3.00 higher and the deferred contracts gained well over $1.00. August feeders closed $3.15 higher at $174.87, September feeders closed $2.67 higher at $177.40 and October feeders closed $2.12 higher at $179.87. With the added support from the live cattle contracts' higher close, the feeder cattle market could really be looking at a barn burner week as demand for feeders has been exceptional. At Oklahoma National Stockyards in Oklahoma City, Oklahoma on run of 9,500 head at their midsession point, compared to two weeks ago feeder steers and heifers were trading $3.00 to $5.00 higher, steers calves were selling steady to $3.00 lower and heifer calves were trading $1.00 to $4.00 higher. This week Superior Livestock Auction is hosting their Week in the Rockies sale were right at 206,370 head of cattle are selling -- 34,920 head of feeder steers, 25,390 head of feeder heifers, 34,240 head of weaned calves and 106,425 head of calves on cows. After this week's sale, the market should have a strong idea of what feeder cattle prices this fall will be. The CME feeder cattle index 7/8/2022: up $3.82, $172.21.
LEAN HOGS:
The lean hog complex rolled into Monday's trade hoping to keep its market elevated, but as the resistance at $110.00 seemed to grow stronger and more daunting, the market ended up trending lower as fundamental support became questionable. August lean hogs closed $0.80 lower at $108.37, October lean hogs closed $1.55 lower at $92.45 and December lean hogs closed $1.10 lower at $84.65. Cash prices closed lower Monday afternoon which wasn't all that surprising for the market after last week's dynamite rally in the cash sector. Pork cutout values were able to round out the day slightly higher which will need to be the week's tone if the board is going to stabilize and try to regain lost ground. Pork cutouts total 330.33 loads with 279.12 loads of pork cuts and 51.21 loads of trim. Pork cutout values: up $0.40, $115.07. Monday's slaughter is estimated at 445,000 head - incomparable to a week ago but 9,000 head more than a year ago. The CME lean hog index 7/7/2022: up $0.81, $110.97.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Given that Monday's market was unsupported as packers let the day pass them by knowing that they can buy later in the week, there's a chance that prices are stronger come Tuesday or potentially Wednesday when packers approach the market more seriously.
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