GENERAL COMMENTS:
It was a strong day for the livestock complex as the feeder cattle market closed higher, Texas traded fat cattle for $0.50 higher than last week's weighted average, and pork cutouts and hog cash prices both closed higher ahead of the day's end. Hog prices closed substantially higher on the Daily Direct Afternoon Hog Report, up $8.03 with a weighted average of $120.50 on 12,030 head. December corn is down 15 1/2 cents per bushel and December soybean meal is down $4.30. The Dow Jones Industrial Average is up 754.44 points.
LIVE CATTLE:
Wednesday's cattle market is going to be one worth watching! With boxed beef prices printing higher, the board trending higher and slaughter speeds still roaring through cattle supplies, who's to say the cash cattle market can't hold steady prices? It was incredibly interesting to see Texas trade cattle this afternoon for $136, which is roughly $0.50 higher than last week's weighted average. Largely, the market hasn't been tested and will wait until Wednesday to really set the pace. However, if the board can again show strong technical support and boxes hold strong, then feedlots stand a chance at keeping the market fully steady. August live cattle closed $0.10 higher at $135.72, October live cattle closed $0.50 higher at $141.10 and December live cattle closed $0.60 higher at $146.75. Tuesday's slaughter is estimated at 125,000 head, 1,00 head less than a week ago and 8,000 head more than a year ago.
Boxed beef prices closed higher: choice up $2.02 ($272.57) and select up $1.07 ($243.73) with a movement of 133 loads (51.98 loads of choice, 29.09 loads of select, 15.48 loads of trim and 35.95 loads of ground beef).
WEDENSDAY'S CASH CATTLE CALL: Steady. Given that Texas was able to accomplish slightly higher trade, I have hope that the rest of the market will be able to hold prices at least steady, so long as the other supportive attributes of the market hold strong (boxed beef prices, slaughter, futures market, etc.).
FEEDER CATTLE:
The feeder cattle market kept with its brisk tone through Tuesday's close. Feeders were able to rally on the fact that corn prices kept trading red and that sales continued to see strong buyer demand. Some sales in parts of the South are seeing discount prices as scorching hot weather make receiving cattle difficult, especially if they aren't long-weaned or vaccinated. August feeders closed $2.07 higher at $178.75, September feeders closed $2.37 higher at $181.80 and October feeders closed $2.25 higher at $184.57. The CME Feeder Cattle Index for July 18: down $0.17, $172.50.
LEAN HOGS:
The lean hog market may have closed mixed with the nearby contracts rounding out the day higher while the deferred months closed lower, but that wasn't due to a lack of fundamental support. Tuesday's cash hog market was crazy with cash prices jumping $8.03 higher, equating the market's weighted average to $120.50. With market-ready supplies of hog incredibly thin, packers who are short bought got caught empty handed and this week's bone got thrown to producers as they were able to name their prices. Thankfully, the pork demand continues to see constant, steady support from consumers as it rounded out Tuesday's market over $3.00 higher. Gains were seen steadily across the afternoon's cutout report, but hams closed with the biggest gains as they jumped over $8.47 higher from Monday. August lean hogs closed $0.70 higher at $112.82, October lean hogs closed $0.12 higher at $94.50 and December lean hogs closed $0.05 lower at $85.67. Pork cutouts total 282.41 loads with 255.81 loads of pork cuts and 26.60 loads of trim. Pork cutout values: up $3.16, $125.12. Tuesday's slaughter is estimated at 460,000 head, 9,000 head more than a week ago and 8,000 head less than a year ago. The CME Lean Hog Index for July 15: up $0.05, $172.67.
WEDNESDAY'S CASH HOG CALL: Steady. What Wednesday's cash market will be is a tough call. At this point, nothing would really surprise in the cash market. Given that Tuesday's volume was still minimal and that Monday traded very few hogs, Wednesday's market will need to see more hogs trade, which could keep prices steady if enough packers are in need.
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