DTN Midday Livestock Comments 08/03 11:37
Livestock Futures Higher at Midday
With support beaming from both the market's technical and fundamental points
of view, higher prices are being achieved again on Tuesday.
DTN Livestock Analyst
The market has kept up with the pace set Monday as the live cattle, feeder
cattle and lean hog contracts all trade higher. What helped the market
confidently trade higher into Tuesday's debut was the fact that both pork
cutouts and boxed beef prices closed higher Monday afternoon. If that can be
accomplished again Tuesday afternoon, the market may stand a chance at
continuing this rally into Wednesday. December corn is down 10 3/4 cents per
bushel and December soybean meal is down $10.30. The Dow Jones Industrial
Average is up 143.30 points and NASDAQ is up 26.49 points.
Traders haven't tip-toed into the nearby live cattle futures Tuesday morning
as both the August and October contracts see gains well over $1.00. As the
market comes up against resistance, the rubber is going to have to meet the
road to move the complex above longer-term resistance. Thankfully with boxed
beef prices showing no immediate signs of retracting, the market sits in a fine
position to rally, as the cash cattle market is the only side of the market
that's been lacking. August live cattle are up $1.32 at $123.45, October live
cattle are up $1.35 at $128.62 and December live cattle are up $0.92 at
$133.67. The countryside sits quietly heading into Tuesday afternoon without
any bids being noted. Asking prices in the South are marked at $122-plus and in
the North at $199-plus. The market isn't expecting to see much develop until
Wednesday or later.
Boxed beef prices are higher: choice up $4.06 ($285.06) and select up $2.63
($266.01) with a movement of 56 loads (27.06 loads of choice, 11.95 loads of
select, 10.61 loads of trim and 6.52 loads of ground beef).
With corn prices trending lower, boxed beef prices scaling higher and live
cattle futures rallying, why shouldn't the feeder cattle market be rallying?
The feeder cattle contracts are rallying amid phenomenal technical and
fundamental support. It's a great week for the market to be seeing such
confidence from all sides as Superior hosts their big Video Royale sale where
over 184,000 head of cattle will be offered. It's important that the market
trades strong for those who are consigned to the sale, but also for those who
are looking to better understand where the market sits and are looking to price
their calves in the next week to 10 days. And with corn continuing to chop
sideways and the April 2022 live cattle contract hitting Tuesday's noon hour at
$140.00, buyers are thankfully feeling quite confident. August feeders are up
$1.22 at $159.47, September feeders are up $1.15 at $163.12 and October feeders
are up $1.10 at $165.57.
With slaughter anticipated to be back to normal running capacity, packers
buying close to 6,000 head in the morning's cash hog market and pork cutouts
showing positive signs for a higher close -- the hog market is rallying! August
lean hogs are up $0.77 at $108.27, October lean hogs are up $1.12 at $90.62 and
December lean hogs are up $0.57 at $83.45. The support that's buzzing
throughout the cattle futures has picked up momentum in the lean hog market as
well and is allowing for the complex to rally confidently. If the market can
round out the day with a higher pork cutout, this rally is very likely to
The projected CME lean hog index for 8/2/2021 is down $0.45 at $111.59, and
the actual index for 7/30/2021 is down $0.04 at $112.04. Hog prices are lower
on the National Direct Morning Hog Report, down $0.54 with a weighted average
of $100.45, ranging from $98.00 to $104.00 on 5,680 head and a five-day rolling
average of $101.97. Pork cutouts total 176.57 loads with 158.26 loads of pork
cuts and 18.31 loads of trim. Pork cutout values: up $3.05, $131.76.
ShayLe Stewart can be reached at firstname.lastname@example.org
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