GENERAL COMMENTS:
Both the live cattle and feeder cattle contracts grew hesitant ahead of Thursday's close, but the lean hog market pressed onward through closing and kept its elevated position through the day's end. Some light cash cattle trade has been reported in the South at $180 ($2.00 higher) and in the North at $295 ($3.50 higher). Hog prices closed $0.19 lower on the Daily Direct Afternoon Hog Report, equating to a weighted average of $104.29 on 6,503 head. December corn is down 6 3/4 cents per bushel and December soybean meal is down $4.30. The Dow Jones Industrial Average is up 163.97 points.
LIVE CATTLE:
Technical pressure grew beyond what traders could withstand and ahead of Thursday's end the complex closed lower. But, having seen what cash cattle are trading for, it's likely that traders slightly regret their skeptical close. Even so, with Friday being a major USDA report day for the cattle complex, there is some anxiousness floating throughout the marketplace. Neither the Cattle on Feed nor Cattle Inventory report are expected to showcase anything unexpected, but they both are worthy of time and attention, still. A light trade has been reported in the South at $180 which is $2.00 higher than last week's weighted average. Dressed trade in Nebraska is being marked at $295 which is $3.50 higher than last week's weighted average. More trade will likely need to occur on Friday if packers intend to keep from becoming short bought. Asking prices in the South remain firm at $183-plus and in the North at $298-plus.
Thursday's slaughter is estimated at 126,000 head, 1,000 head less than a week ago and 4,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending July 8, steers averaged 892 pounds, which is 8 pounds more than the previous week. For the same week, heifers averaged 812 pounds, which is 5 pounds more than a week ago but still a pound less than a year ago.
Beef net sales of 20,900 mt for 2023 were up noticeable from the previous week and up 60% from the previous four-week average. The three largest buyers were South Korea (7,800 mt), Mexico (4,100 mt) and China (2,900 mt).
Boxed beef prices closed lower: choice down $1.03 ($302.56) and select down $1.25 ($274.71) with a movement of 152 loads (101.94 loads of choice, 31.17 loads of select, 3.11 loads of trim and 15.65 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to somewhat higher. Feedlots have again successfully championed this week's cash cattle market as prices are trading higher, but depending on how desperate packers are for cattle, prices could get even higher yet.
FEEDER CATTLE:
Even though the nearby corn contracts closed $0.05 to $0.08 lower, the feeder cattle complex drew back ahead of the day's end as the live cattle market's hesitancy created some concern. But now that fat cattle have begun to trade for $2.00 to $3.50 higher, traders most likely regret pulling the cattle contracts back. Nevertheless, the market's relentless demand continues to fuel prices higher in the countryside, and traders will be able to breathe easier once Friday has come and gone and the two big USDA reports are no longer hidden and yet to be seen. August feeders closed $1.70 lower at $245.10, September feeders closed $1.02 lower at $248.30 and October feeders closed $0.72 lower at $249.82. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, there weren't very many light feeders available, but of those weighing 1,000 pounds and more a steady $2.00 to $3.00 price increase was seen. Feeder heifers weighing 750 to 950 pounds sold $2.00 to $8.00 stronger. Feeder cattle supply over 600 pounds was 95%. The CME Feeder Cattle Index for July 19: down $0.65, $237.83.
LEAN HOGS:
The lean hog contracts were the champions of the day for the livestock complex as they were the only livestock market able to sustain a higher position though closing. The onset of slightly cheaper corn prices helped traders continue to support the complex, as well as the slight increase in pork cutout values. What was especially comforting about today's cutout report is that moderate gains were seen across nearly all the cuts, which is much more supportive than one individual cut jumping $17.00 higher and skewing the carcass price. August lean hogs closed $2.70 higher at $100.62, October lean hogs closed $3.00 higher at $84.72 and December lean hogs closed $2.30 higher at $77.25. Pork cutouts totaled 207.86 loads with 195.14 loads of pork cuts and 12.72 loads of trim. Pork cutout values: up $2.95, $115.56. Thursday's slaughter is estimated at 469,000 head, 4,000 head more than a week ago and 27,000 head more than year ago. The CME Lean Hog Index for July 18: up $0.77, $103.30.
Pork net sales of 19,200 mt for 2023 were down 22% from the previous week and 28% from the prior four-week average. The three largest buyers were China (5,300 mt), Mexico (5,000 mt) and Japan (4,100 mt).
FRIDAY'S HOG CALL: Lower. Packers didn't show much interest in the cash market Thursday and it's likely that they'll show even less interest come Friday.
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