DTN Midday Livestock Comments 07/27 11:45
Boxed Beef Prices Jump
Livestock futures have not been nearly as aggressive Tuesday as the market
was Monday; but still-strong demand keeps the market's morale elevated and
traders watching from afar.
DTN Livestock Analyst
Of all the complications markets saw through 2020 and 2021, demand has not
hindered 2021's beef or pork sectors. As Labor Day quickly approaches, boxed
beef prices are again rallying and feedlots cross their fingers and hope they
can push the cash cattle market higher as packers see increased dividends from
consumers (once again). December corn is up 1/4 cent per bushel and December
soybean meal is up $5.40. The Dow Jones Industrial Average is down 196.47
points and NASDAQ is down 270.43 points.
With boxed beef prices strutting a fancy $2.00 advancement at midday, one
can't help but want the cash cattle market to trade higher. With Labor Day
buying spurring boxes higher, packers are again seeing their end margin
increase and consequently have more to give for cash cattle. The tough
component of the market will be whether feedlots stick together in marketing
this week and demand higher prices. August live cattle are down $0.30 at
$123.17, October live cattle are down $0.72 at $128.47 and December live cattle
are down $0.57 at $133.30. There's yet to be any action in cash cattle trade,
but asking prices should develop in at least the South before the day's end.
Boxed beef prices are higher: choice up $2.72 ($270.65) and select up $2.92
($253.84) with a movement of 76 loads (45.10 loads of choice, 20.54 loads of
select, 6.04 loads of trim and 4.39 loads of ground beef).
Feeder cattle futures haven't been lackadaisical in their trade over the
last month as the corn market has given the complex an opportunity to rally and
calf buyers have hit the early summer sales with immense aggression. But now
that the spot August contract has come up against resistance at $162, the
market sits and ponders how much true upside there is. As the corn market dips
another 1 to 3 cents lower early Tuesday, the feeder cattle market has the
green light from the feed sector to trade higher. But traders continue to look
at the market and want to see more signs that the market should indeed continue
to scale higher. The cash cattle market has yet to do anything this week, but
most believe higher trade is in the week's reach. If cash cattle can trade
higher, the feeder cattle market may get the supportive signals it needs in
order to keep trading higher. August feeders are down $1.12 at $161.07,
September feeders are down $0.32 at $164.50 and October feeders are down $0.20
Lean hog futures are chopping mostly sideways through Tuesday's trade as the
market aspires to trade higher amid robust consumer demand, but traders pull
back in caution. August lean hogs are down $0.05 at $107.35, October lean hogs
are down $0.42 at $92.65 and December lean hogs are down $0.52 at $85.00. The
market is once again hopeful to see another strong pork cutout close, and it
surely wouldn't hurt the market's feelings if packers stepped up and bought a
large sum of hogs in the afternoon cash market.
The projected CME Lean Hog Index for 7/26/2021 is down $0.18 at $112.06, and
the actual index for 7/23/2021 is up $0.01 at $112.24. Hog prices are higher on
National Direct Morning Hog Report, up $0.36 with a weighted average of
$103.93, ranging from $102.00 to $108.00 on 3,661 head and a five-day rolling
average of $104.67. Pork cutouts total 215.82 loads with 194.75 loads of pork
cuts and 21.08 loads of trim. Pork cutout values: up $2.82, $125.76.
ShayLe Stewart can be reached at firstname.lastname@example.org
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