DTN Midday Livestock Comments 07/05 11:50
Skepticism Brews in Tuesday's Market
Largely the markets have a tough start to the week as the commodity markets
trends mostly lower.
DTN Livestock Analyst
The livestock complex is enduring a tough go to Tuesday's start as the
contracts mostly trend lower into the day's afternoon, as traders seem
unwilling to dip their toes into the marketplace at this point. Both the live
cattle and feeder cattle contracts started the day off strong, rallying on the
corn market's regression, but since then the market's weaker tone has spread
wider and even pushed the cattle contracts into a downward ascend. December
corn is down 33 3/4 cents per bushel and December soybean meal is down $12.40.
The Dow Jones Industrial Average is down 472.08 points.
The live cattle contracts aren't seeing any support in their marketplace
heading into Tuesday's afternoon. Yes, Friday's market was able to close
higher, but largely last week's lower tone unraveled some of the market's
confidence. Having the Fourth of July weekend behind us now, everyone wants to
know what July's market is going to bring? How will beef demand fare? Will
processing speeds continue to run 660,000 head per week, or will speeds regress
and showlists grow? The biggest theme in Tuesday's market is that it seems like
there's more unanswered questions at this point than answered questions. August
live cattle are down $0.82 at $133.77, October live cattle are down $0.62 at
$139.35 and December live cattle are down $0.77 at $145.00. This week's
showlist is mixed as there's less cattle in Texas and Kansas, but more cattle
in Nebraska and Colorado. Thus far the market's not seen any real interest
develop other than that there's a bid in Nebraska being offered at $145 and
asking prices in the Southern Plains are noted at $140 plus.
Boxed beef prices are higher: choice up $0.35 ($264.17) and select up $0.23
($240.70) with a movement of 35 loads (24.08 loads of choice, 4.10 loads of
select, zero loads of trim and 6.35 loads of ground beef).
On a normal day, one would suspect that the feeder cattle contracts would be
rallying as the corn market tumbles $0.25 to $0.33 lower to start the week off.
But, as the entire commodity market faints lower, even the feeder cattle
contracts are trading lower despite the corn market's plumet. August feeders
are down $0.80 at $173.70, September feeders are down $0.62 at $177.02 and
October feeders are down $0.65 at $179.85.
The lean hog complex is seeing more support grow for the nearby contracts of
July and August, but the deferred months are trending lower like the rest of
the marketplace. July lean hogs are up $2.05 at $111.65, August lean hogs are
up $2.75 at $105.72 and October lean hogs are down $0.10 at $88.82. Seeing a
wild jump in midday pork cutout values may not end up amounting to much by the
day's end as anything can happen, but in the meantime a $8.28 advancement
demands some attention.
The projected lean hog index for July 1 is down $0.12 at $110.58, and the
actual index for June 30 is down $0.14 at $110.70. Hog prices are higher on the
Daily Direct Morning Hog Report, up $0.63 with a weighted average of $113.88,
ranging from $110.00 to $124.00 on 4,150 head and a five-day rolling average of
$116.23. Pork cutouts total 163.81 loads with 136.16 loads of pork cuts and
27.64 loads of trim. Pork cutout values: up $8.28, $117.03.
ShayLe Stewart can be reached firstname.lastname@example.org
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