DTN Midday Livestock Comments 06/30 11:42
Feeders Charge Ahead as Corn Dips Lower and Buyers Bid Aggressively at Sales
Cattle find support later in the week as corn prices dip lower and feeders
help push the market higher thanks to strong sales in the countryside.
DTN Livestock Analyst
The live cattle market is trading mixed into Thursday afternoon as the
cattle contracts find themselves fully supported, but the lean hog contracts
are being pushed lower as pork cutout prices and slaughter speeds have been
lagging. The gust of support that's infiltrated the cattle market has largely
come from the feeder cattle market as sales are reporting sharply higher prices
and the corn market is again trading lower. December corn is down 22 3/4 cents
per bushel and December soybean meal is up $5.70. The Dow Jones Industrial
Average is down 74.99 points.
The live cattle contracts are rallying into Thursday's afternoon as the
market picks up some of the momentum stemming from the feeder cattle market,
and as it thankfully absorbs Thursday's stronger export report. August live
cattle are up $0.57 at $132.75, October live cattle are up $0.22 at $139.12 and
December live cattle are up $0.45 at $145.07. The board thankfully didn't break
below its resistance at $132.00 and seems to be confidently trading higher even
though cash prices didn't run higher this week. The cash cattle market hasn't
seen any renewed interest and it's likely that the bulk of this week's business
is done with. So far this week, Southern live business has been marked at
mostly $138, that is steady to roughly $1 lower than last week's weighted
averages. Northern dressed deals were marked at mostly $234, not quite $1 lower
than last week's weighted average basis in Nebraska. Colorado had some late
sales at $145, about steady with last week's weighted average.
Beef net sales of 17,000 mt for 2022 were up 52% from the previous week and
6% from the prior 4-week average. The three largest buyers were South Korea
(5,100 mt), China (4,500 mt) and Japan (2,000 mt).
Boxed beef prices are lower: choice down $1.00 ($263.88) and select down
$0.41 ($240.40) with a movement of 68 loads (46.47 loads of choice, 13.00 loads
of select, 4.34 loads of trim and 3.93 loads of ground beef).
If you've been paying attention to feeder cattle sales this past week, you
know and understand just how strong the cash feeder cattle market is.
Thankfully Thursday's board has come to its senses and is now trading higher as
the market absorbs the robust sales that Wednesday reported and the lower corn
prices in Thursday's market. August feeder cattle are up $2.65 at $173.37,
September feeder cattle are up $2.25 at $176.02 and October feeders are up
$2.17 at $178.57.
You would have thought that Wednesday's neutral to slightly favorable
Quarterly report would have helped the lean hog complex find footing in
Thursday's market, but that hasn't been the case. July lean hogs are down $0.52
at $108.87, August lean hogs are down $2.12 at $101.45 and October lean hogs
are down $2.02 at $88.57. What seems to be pressuring the market more than
anything is the combination of weaker pork cutout values and waning slaughter
speeds. It was positive to see 32,300 mt of pork reported in Thursday's morning
export data, and export data will continue to be a factor of the market that
needs watched closely as moving product could help with prices later into 2022.
Pork net sales of 32,300 mt for 2022 were up 27% from the previous week and
from the prior 4-week average. The three largest buyers were Mexico (20,700
mt), Japan (3,700 mt) and Australia (2,700 mt).
The projected lean hog index for 6/29/2022 is down $0.40 at $110.84, and the
actual index for 6/28/2022 is down $0.38 at $111.24. Hog prices are lower on
the Daily Direct Morning Hog Report, down $3.75 with a weighted average of
$116.11, ranging from $112.00 to $123.00 and on 4,039 head and a five-day
rolling average of $117.72. Pork cutouts total 114.91 loads with 97.79 loads of
pork cuts and 17.12 loads of trim. Pork cutout values: down $1.47, $107.09.
ShayLe Stewart can be reached email@example.com
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