Wednesday Closing Livestock Market Summary - Sluggish Through Livestock Contracts

GENERAL COMMENTS:

Contracts have decided that, for the meantime, a lackluster, doggish downward trade is where the chips need to fall. Last week's rally may rival resistance later down the road, but, for now, contracts can't muster up support. Cash hog prices closed $0.23 lower on the National Direct Afternoon Hog Report, with a weighted average of $29.14 on 9,504 head. December corn is up 1 3/4 cents per bushel and December soybean meal is down $1.30. The Dow Jones Industrial Average is up 177.10 points and NASDAQ is up 148.61 points.

LIVE CATTLE:

Live cattle contracts closed lower Wednesday afternoon, though cash cattle prices are inching slightly higher than last week's averages. The market hit resistance and has sank back lower, and thus far traders seem uninterested in rallying those levels again. August live cattle closed $0.85 lower at $99.15, October live cattle closed $0.67 lower at $103.50 and December live cattle closed $0.35 lower at $106.67. Wednesday had a light to moderate cash cattle trade with Southern deals trickling in throughout the day and Northern cattle selling in the afternoon. The South sold cattle live for $90 to $95.25, though mostly at $95, which is $1.00 higher than last week. Northern cattle sold for $155 to $160, which is $1.00 to $6.00 better than last week. Wednesday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 2,000 head more than year ago.

Boxed beef prices closed lower: choice down $1.47 ($203.83) and select down $1.32 ($195.52) with a movement of 178 loads (94.34 loads of choice, 37.17 loads of select, 21.93 loads of trim and 24.15 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady. Seeing that cattle have not traded in the North or the South, price ranges for the week are most likely set unless a packer needs immediate delivery, at which point they may pay a little extra.

FEEDER CATTLE:

Feeder cattle contracts closed lower Wednesday afternoon, not interested in pursuing a rally whatsoever in the day's timeframe. Seeing live cattle contracts trade lower after pursuing a rally has turned feeders off from trading higher, and collectively the market closed $0.42 to $1.05 lower. August feeders closed $0.87 lower at $134.05, September feeders closed $0.65 at $135.67 and October feeders closed $0.47 lower at $136.77. At Hub City Livestock Auction, in Aberdeen, South Dakota, compared to two weeks ago, the market had its best test on steers weighing 850 to 950 pounds, which sold $2.00 to $3.00 higher. The best test on heifers were the females weighing 750 to 850 pounds, which sold $1.00 to $2.00 stronger. Cattle came in with mixed flesh, but there were some that came off grass in lighter condition. Weather conditions continue to be an issue for the region, as temperatures have been extremely hot and humid. The CME feeder cattle index 7/7/2020: not available at this time.

LEAN HOGS:

The lean hog complex closed mostly lower, though the October and December 2020 contracts closed slightly higher. July lean hogs closed $0.47 lower at $44.05, August lean hogs closed $0.92 lower at $47.95 and October lean hogs closed $0.17 higher at $48.80. Pork cutout values jumped higher and it's interesting that once again -- even though packers got hogs for a little lower price -- they still bought upwards of 9,504 head; continuing to show strong interest and drive to get the backlog worked through. Pork cutouts totaled 384.58 loads with 349.91 loads of pork cuts and 34.67 loads of trim. Pork cutout values: up $4.56, $67.16. Wednesday's slaughter is estimated at 467,000 head, 2,000 head less than week ago and 15,000 head less than a year ago. The CME lean hog index 7/6/2020: up $0.24, $45.90.

THURSDAY'S CASH HOG CALL: Steady. Until the backlog of hogs is worked through, a steady trend is the most likely movement. When packers need hogs for immediate delivery, they may pay a little extra, but through precise planning and scheduling at the plants, they won't be pressured to pay much more, as numbers are exuberant.

#completeherdhealth

Wednesday Midday Livestock Market Summary - Livestock Contracts Aren't Too Optimistic

General Comments

Livestock contracts continue to trade mostly lower into Wednesday's afternoon hours with resistance becoming more and more apparent in all three of the different contracts. The cash markets are trading split as cash cattle are trending steady to somewhat higher than a week ago while the cash hog market has slipped lower. December corn is down 1/2 cent per bushel and December soybean meal is down $0.20. The Dow Jones Industrial Average is up 47.26 points and NASDAQ is up 91.11 points.

LIVE CATTLE

Producers liked seeing the August live cattle contract trade above $1.00 throughout Monday as it yielded some optimism but unfortunately the resistance sitting at that threshold has been more than the market seems to be able to manage. August live cattle are down $0.92 at $99.07, October live cattle are down $0.90 at $103.27 and December live cattle are down $0.65 at $105.35. Cash cattle trade picked up after the FCE and has sold some Southern cattle at $95 -- steady with this week's trade but $1.00 higher than a week ago. Thus far cattle in the North have yet to accept the bids on the table and we may see packers up their bids in those regions as showlists are slimmer in Nebraska and Colorado this week.

The Fed Cattle Exchange Auction listed a total of 1,390 head, with 659 actually sold, 731 head listed as unsold, and zero head listed as PO (Passed Offer). The state-by-state breakdown looks like this: Kansas 1,048 total head, with 659 head sold at $95.00-$95.25, 389 head unsold; Nebraska 123 total head, all went unsold; Texas 219 total head, all went unsold. The delivery date/weighted averages breakdown is as listed: 1-9-day delivery: 643 head total, 509 head sold, with a weighted average price of $95.16; 1-17 day delivery 747 head total, 150 head sold, with a weighted average price of $95.00.

Boxed beef prices are lower: choice down $0.77 ($204.53) and select down $1.21 ($195.63) with a movement of 88 loads (44.74 loads of choice, 19.32 loads of select, 6.06 loads of trim and 17.90 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are not enthused once again are continuing to trade lower into the afternoon. August feeders are down $0.87 at $134.05, September feeders are down $0.62 at $135.70 and October feeders are down $0.45 at $136.70. The board continues to trade lower but surprisingly feeder cattle are still trading well throughout the countryside.

LEAN HOGS

The excited that spurred the cash hog market has dwindled into Wednesday as now both cash hogs and the board are trading lower. July lean hogs are down $0.50 at $44.02, August lean hogs are down $0.75 at $48.12 and October lean hogs are up $0.30 at $48.92. As the July contract is set to expire in a week, trades are looking towards the end of the year to invest and see how upside potential there. Hopefully at that point, the majority of the backlog is worked through and supply and demand can be somewhat normal.

The projected lean hog index for 7/7/2020 is down $0.55 at $45.35, and the actual index for 7/6/2020 is up $0.24 at $45.90. Hog prices are lower on the National Direct Morning Hog Report, down $0.27 with a weighted average of $29.10, ranging from $24.00 to $30.19 on 6,579 head and a five-day rolling average of $28.95. Pork cutouts total 170.91 loads with 156.26 loads of pork cuts and 14.65 loads of trim. Pork cutout values: up $0.18, $62.78.

#completecalfcare

Wednesday Morning Livestock Market Update - Cash Cattle Prices Stabilizing

General Comments:

Limited cash cattle trade trickled into the market Tuesday. The moderate-to-strong support in futures trade over the last week has sparked increased overall support in cash values with Southern live prices reported at $94 to $95 per cwt. This is generally $1 per cwt higher than last week's average. Dressed trade posted a wider range but is still well below the wide gaps the last couple of months with trade contained from $152 to $160 per cwt. Most trade developed at $157 to $160 per cwt, which is $3 to $6 per cwt higher than last week. There is still a lot of cattle yet to trade through the week, although it appears that without a major disruption in futures trade or outside markets, the tone of the market is taking shape. With average carcass weights starting to slide lower, the focus on a more current cattle supply seems to be getting more attention, which could help support cash values through the upcoming weeks. It is important to realize that cash cattle prices and futures are currently focusing on different aspects of the market. Futures trade is focused on the expectation of tight cattle supplies through the end of the year, while cash markets are still bogged down with the currently heavy supply of market-ready cattle in the system, which is likely to keep cash values discounted to futures over the next several weeks. Futures trade is expected to remain mixed early Wednesday morning with limited overall direction shifts seen through the week. As packers return to more normal processing schedules following the holiday week, futures will once again take a broad market perspective with outside markets playing a large factor in trader involvement in the near future. Wednesday's slaughter is expected at 121,000 head.

Lean hog futures continue in a narrow trading pattern with prices hovering just above long-term support levels. Although there continues to be just enough underlying buyer support and market momentum to keep prices "technically" supported, the overall lack of fundamental support in the complex continues to create concern that prices levels may hover between the $45 to $50 per cwt price range through much of the summer. There will be increased attention on weekly hog weights, which will be released later in the morning. The steady drop in overall weights over the last couple of months continues to keep traders focusing on the potential that hog supplies are much more current than previously thought, although the realization that year-over-year hog number increases remains bearish to the market, and will likely depress price levels well into fall months. Cash hog values bounced higher, but the fact that the national average hog price remains below $30 per cwt, continues to create uncertainty about further market support. Cash hog prices are expected $1 lower to 50 cents higher with most bids expected steady. Slaughter Wednesday is expected at 469,000 head. Saturday runs are expected at 283,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash cattle prices bounced higher in early week trade with live cattle prices in the South increasing $1 per cwt over last week's average, while Northern dressed trade posted a $3 to $6 per cwt bounce. The focus on firming cash values is helping to entertain the idea that cash values could be near seasonal lows.	1)	Firm pressure in nearby feeder cattle futures highlighted the continued concerns facing the cattle market going into late summer and early fall. With August feeder cattle backing away from previous gains, the concern is that last week's gains may establish firm resistance levels. These could hold through the upcoming weeks due to seasonal pressure in the market.
2)	Average cattle weights are starting to ease from recent highs. This is indicating that the market is becoming more current. Although weights are still well above year-ago levels, the trend for lower weights heading into the dead of summer is indicating that the market is moving in the right direction.	2)	Cash cattle prices continue to trade at a discount to the futures market. This relationship may continue through the end of the summer with the focus on the current backlog of cattle supplies likely to keep cash values under pressure in the coming weeks.
3)	Strong gains in cash hog values developed Tuesday, creating the potential for increased underlying support and further expectation that additional gains may develop in the near future. The strong discount in cash hog values to futures trade is showcasing the disconnect between cash markets and futures trade.	3)	Pork cutout values continue to show little support during early week trade. The lack of ability to elevate or even stabilize wholesale pork values is creating significant concern about demand for pork through the summer months.
4)	Further carcass weight reductions are expected in the weekly hog weight report released later Wednesday morning. This is expected to put more focus on the current ability for the industry to steadily and efficiently keep hog weights under control even though plant production levels were significantly reduced earlier this spring.	4)	Nearby lean hog futures continue to hover just above long-term support levels. The inability to distance prices from these levels continues to make renewed technical pressure a real possibility over the coming days and weeks.

#completeherdhealth

Tuesday Closing Livestock Market Summary - Livestock Contracts Slow Their Forward Motion

GENERAL COMMENTS

Livestock contracts weren't as audacious about trading higher Tuesday as they were later last week and sequentially closed lower in all three markets. On a brighter note, both cash markets closed higher. Cash hog prices closed $0.76 higher on the National Direct Afternoon Hog Report, with a weighted average of $29.29 on 12,323 head. December corn is down 3 3/4 cents per bushel and December soybean meal is down $2.90. The Dow Jones Industrial Average is down 396.85 points and NASDAQ is down 89.76 points.

LIVE CATTLE

Live cattle contracts kept with their hesitance and closed slightly lower Tuesday afternoon. August live cattle closed $0.10 lower at $100.00, October live cattle closed $0.25 higher at $104.17 and December live cattle closed $0.02 lower at $107.02. The market's indecisiveness has put a bit of a damper on the upward rally, but its trade in the next couple of days will solidify if prices are to keep trending upward or if they should scale lower. Tuesday afternoon there's been some light trade reported in the South with live cattle selling for $94 to $95, which is steady to $1.00 higher than last week's averages. Northern cattle have sold for $152 to $160 (mostly at $157 to $160), which is $3.00 to $6.00 higher than last week's prices. Tuesday's slaughter is estimated at 119,000 head, 2,000 head less than a week ago and 1,000 head less than a year ago. Monday's cattle slaughter was revised to 115,000 head.

Boxed beef prices closed lower: choice down $0.16 ($205.30) and select down $0.13 ($196.84) with a movement of 124 loads (68.84 loads of choice, 20.28 loads of select, 9.09 loads of trim and 25.57 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. There hasn't been quite enough trade this week to call the market set in a trend, but trade is developing stronger, as oddly as that may sound. Coming out of the holiday weekend, packers are most likely caught a little shorter bought than they'd like.

FEEDER CATTLE

Feeder cattle contracts closed lower with nearby contracts enduring the biggest losses. August feeders closed $1.22 lower at $134.92, September feeders closed $0.90 lower at $136.32 and October feeders closed $0.60 lower at $137.25. At OKC West Livestock Auction, in El Reno, Oklahoma, the market's preliminary report is sharing that, compared to last week, steer and heifer calves are selling $2.00 to $5.00 better, with instances of even $8.00 stronger. Demand is excellent and quality is average to attractive. It's nerve wrecking for that part of the country right now as temperatures are high and there's no rain in the nearby forecast. The CME feeder cattle index 7/3/2020: up $0.10, $128.98.

LEAN HOGS

Cash hog prices closed $0.76 stronger on 12,323 head, but it wasn't enough to pull the board higher. Seeing that packers bought aggressively Tuesday afternoon leads one to believe that they intend to keep kills ramped up and were potentially short bought coming out of the holiday weekend. July lean hogs closed $0.42 lower at $44.52, August lean hogs closed $0.40 lower at $48.87 and October lean hogs closed $0.42 lower at $48.62.

Pork cutouts total 472.46 loads with 434.43 loads of pork cuts and 38.04 loads of trim. Pork cutout values: down $1.74, $62.60. Tuesday's slaughter is estimated at 469,000 head, steady with a week ago and 8,000 head less than a year ago. The CME lean hog index 7/2/2020: up $0.64, $45.02.

WEDNESDAY'S CASH HOG CALL: Slightly lower to steady. Seeing that Tuesday's afternoon prices were up considerably, the market may be apt to trade slightly lower on Wednesday. But it really depends on how many hogs packers need and how quickly they need them.

#completecalfcare