GENERAL COMMENTS:
Mild losses stalked the livestock futures markets through the Monday session, although feeder cattle contracts and some of the nearby lean hog contracts were able to end the day with gains. Bids and asking prices haven't been established for this week's cash cattle market, but last week was marked at mostly $179 in the South and $294 in the North. The National Direct Afternoon Hog Report showed purchased swine prices up $1.24 to a weighted average of $101.71 on 1,483 head. Prices ranged from $90 to $108, and the 5-day rolling average is now $105.56. September corn moved down 17 cents to $5.04 per bushel and August soybean meal closed down $4.00 per ton to $451.20. The Dow Jones Industrial Average was up 100.90 points and the NASDAQ was up 6.07 points.
LIVE CATTLE:
Live cattle futures kicked off the week by moving in a downward direction, but the losses weren't large. The August contract closed down $0.10 at $178.05; the October contract closed down $0.075 at $179.525, and the December contract closed down $0.20 at $183.40. Futures trading volume was light throughout the session. Without fresh momentum on the charts, and at these relatively lofty prices, few traders will see a reason to push the market to new highs. But, on the other hand, if the cash cattle market remains firm this week, the futures will have to stay steady to keep the pace. Bids and asking prices haven't been established yet for the week, but they'll be benchmarked against last week's prices -- $179 live basis in the South and $294 dressed basis in the North. After such light business was transacted late last week, the expectation is that packers will have to come at the market a little harder this week to make up the volume.
Boxed beef prices were mixed: choice down $0.22 ($301.78) and select up $0.19 ($277.73), with a movement of 86 loads (44.43 loads of choice, 25.22 loads of select, 0 loads of trim and 16.70 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Given that packers are short bought, prices will likely turn higher this week when cattle trade.
FEEDER CATTLE:
Feeder cattle futures contracts shook off the bearish spillover trade from the rest of the livestock sector and instead posted their own gains. At the end of the session, the August feeder cattle contract was unchanged at $245.60, the September contract was up $0.225 at $249.20, and the October contract was up $0.025 at $251.025. Soybeans led the steep losses in the agricultural commodity futures sector Monday, and although these were likely triggered by falling prices among international edible oils, here in the U.S., traders were also happy to run with a weather forecast for some precipitation to improve the Corn Belt's yield prospects. Better yields and more available grain is the kind of outlook that could help buying calves above $240 still potentially pencil out at a profit sometime in 2024.
LEAN HOGS:
Active spread trading Monday between the nearby and deferred months' lean hog futures contracts reflected the more bullish outlook for summer and fall versus the more bearish outlook for the market past December. The August lean hog contract closed up $0.925 at $104.125; the October contract closed up $0.975 at $86.00; and the December contract closed up $0.25 at $77.30. Lower barrow and gilt weights at slaughter during this summer season may be adding to the market's bullish interpretation about near-term supply to restock relatively current cold storage. The afternoon pork cut-out showed the overall carcass value up $3.74 to $117.21. There were 229.49 total loads (201.98 loads of cuts and 27.51 loads of trim). The CME Lean Hog Index for July 27: down $0.03, $105.81, and the projected Index for 7/28: up $0.19, $106.00.
TUESDAY'S CASH HOG CALL: Steady to $1 higher. Relatively stable cut-out values mean that packers can approach a tight summer hog market with strength.
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