GENERAL COMMENTS:
It was a lackluster day for the cattle market as the market saw more cash cattle trade, but lower prices were the market's theme. The feeder cattle market seemed to run out of steam technically, as traders allowed the market to dip lower despite interest still being strong in sales. But the lean hog market had a whammy of day as cash prices blew everyone's mind. Hog prices closed $7.19 higher on the Daily Direct Afternoon Hog Report, equating to a weighted average of $127.69 on 29,371 head. December corn is down 7 1/2 cents per bushel and December soybean meal is down $3.70. The Dow Jones Industrial Average is down 145.93 points.
LIVE CATTLE:
The live cattle contracts managed to keep the market trading slightly higher ahead of Wednesday's close, but largely the day was uneventful as the cash cattle market was slow to develop and prices in the Norther ended up being about $2.00 lower than last week's weighted average. August live cattle closed $0.02 higher at $135.75, October live cattle closed $0.22 higher at $141.32 and December live cattle closed $0.07 higher at $146.82. There was a moderate trade of cash cattle in Nebraska for mostly $227, which is $2.00 lower than last week's weighted average. A little bit more trade was reported in the Texas again at $136. Thus far throughout the week only 27,698 head of cattle have traded. The week will need to move more cattle if it's going to sell a sizeable movement.
Wednesday's slaughter is estimated at 124,000 head, 2,000 head less than a week ago and 6,000 head more than a year ago.
Boxed beef prices closed lower: choice down $2.04 ($270.53) and select down $1.48 ($242.52) with a movement of 119 loads (71.78 loads of choice, 20.28 loads of select, 5.28 loads of trim and 21.18 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions, prices will likely be steady with the week's trend.
FEEDER CATTLE:
The feeder cattle complex ran out of gas throughout Wednesday's trade as the market closed lower even while the corn complex kept trading lower and demand for feeder cattle and calves still interested most buyers. Thankfully, the market still closed well above its recent breakout trendline and isn't in troubled territory technically speaking. In order for the market to continue its upward quest, demand will need to continue to show unwavering interest from buyers, which isn't most likely going to be a problem. As the market waits for Friday's Cattle on Feed and the midyear Cattle Inventory report, traders may trade cautiously throughout the market until the report's findings are disclosed. August feeders closed $0.92 lower at $177.82, September feeders closed $0.82 lower at $180.97 and October feeders closed $0.82 lower at $183.75. At Winter Livestock in Dodge City, Kansas, compared to last week, feeder steers weighing 700 to 900 pounds traded steady to $3.00 higher. Steers weighing 500 to 700 pounds traded steady to $2.00 lower and steers calves weighing 400 to 500 pounds traded $20.00 higher. Feeder heifers weighing 600 to 900 pounds traded unevenly steady and heifer calves weighing 400 to 600 pounds sold $3.00 to $5.00 higher. Slaughter cows and bulls sold $9.00 to $10.00 lower. The CME Feeder Cattle Index for July 19: down $0.08, $172.42.
LEAN HOGS:
The lean hog market has been relentless in its quest for higher prices as the market has rallied aggressively throughout the week in the futures complex and in the cash market. August lean hogs closed $2.05 higher a $114.87, October lean hogs closed $1.52 higher a $96.02 and December lean hogs closed $1.17 higher at $86.85. The real doozy of Wednesday's market though was the cash hog market. Wednesday's cash hog market closed $7.19 higher which pushed the market's weighted average to $127.69, with a wide range from $111.00 to $133.00 on 29,371 head. Iowa/Minnesota prices averaged $129.22, the Western Corn Belt averaged $129.52 and the Eastern Corn Belt was the market's outlier as it trailed behind at $119.61. Nevertheless, it's fair to say that supplies are thin in the Iowa/Minnesota and Western Corn Belt regions, which is driving prices higher as supplies are so limited. Pork cutouts total 224.07 loads with 205.38 loads of pork cuts and 18.69 loads of trim. Pork cutout values: down $0.75, $124.37. Wednesday's slaughter is estimated at 459,000 head, 5,000 head more than a week ago and 11,000 head less than a year ago. The CME Lean Hog Index for July 18: up $1.02, $115.91.
THURSDAY'S CASH HOG CALL: Lower. After jumping over $7.00 higher and when having traded 29,371 head of hogs, one would expect that Thursday's hog market would be lower, but it really depends on whether packers fulfilled all their needs. If they still need hogs, than prices are anyone's guess at this point.
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