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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. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   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.

   LIVE CATTLE:

   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:

   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 
at $166.25.

   LEAN HOGS:

   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 shayle.stewart@dtn.com




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