DTN Midday Livestock Comments          07/23 11:36

   Support Finds the Livestock Contracts Midday Friday

   Heading into Friday's afternoon, the cattle market braces itself for two big 
reports -- the biannual Cattle Inventory report and the monthly Cattle on Feed 
report.

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The feeder cattle market was able to shoot higher from the day's start as 
the corn market keeps trending lower, but the live cattle and lean hog 
contracts took a little more convincing. The cash cattle market hasn't seen an 
ounce of interest throughout Friday's trade thus far and it's looking like this 
week's business is essentially done with. December corn is down 12 3/4 cents 
per bushel and December soybean meal is down $5.50. The Dow Jones Industrial 
Average is up 199.21 points and NASDAQ is up 120.53 points.

   LIVE CATTLE

   The live cattle market has seen a mixed bag of tricks throughout the week. 
Boxed beef prices (though we expect to continue to trend lower) have been 
trending mildly higher over the last two days. The futures market has seen 
continued support as the contracts rally, but yet the market sees a weaker 
slaughter pace and lower fat cattle prices. If you ever thought markets should 
be simple, here's your lesson of why they aren't! August live cattle are up 
$0.55 at $121.35, October live cattle are up $0.42 at $127.10 and December live 
cattle are up $0.52 at $132.37. The cash cattle market hasn't seen so much as 
one bid renewed as of yet, and it's very likely that the bulk of this week's 
trade is done with. Throughout the week, Northern dress trade has been at $194 
to $202, mostly $195, which is $3.00 lower than last week's weighted average. 
Southern live have been marked at $117 to $119, mostly $119, roughly $1.00 
lower than last week's weighted averages.

   Friday afternoon will be busy as the market awaits both the monthly Cattle 
on Feed report and the biannual Cattle Inventory report. Neither are expected 
to shake the market in any significant manner. The Cattle on Feed report may 
show higher placements as drought continues to plague cattlemen in the western 
states.

   Boxed beef prices are higher: choice up $0.42 ($266.56) and select up $1.24 
($251.01) with a movement of 78 loads (54.24 loads of choice, 10.69 loads of 
select, zero loads of trim and 13.32 loads of ground beef).

   FEEDER CATTLE

   As the corn market continues to chop sideways, the feeder cattle contracts 
rally in sheer delight. The market has the support fundamentally as corn in 
trending sideways to somewhat lower and feeder cattle buyers are eager to get 
their orders filled. The technical side of the market is showing strong 
support, but the spot August contract doesn't seem interested in taking on the 
resistance at $160. Early next week, traders will have to address the market 
(corn prices, fundamental feeder demand, long-term live cattle prices) and see 
if there's enough reason to move the market past the long-term resistance. 
August feeders are up $1.17 at $159.37, September feeders are up $1.50 at 
$162.20 and October feeders are up $1.35 at $163.97.

   LEAN HOGS

   After having a tough trade throughout Thursday, the lean hog market has 
rallied support in its nearby contracts while the deferred continue to trend 
slightly lower. August lean hogs are up $0.60 at $107.22, October lean hogs are 
up $1.42 at $93.17 and December lean hogs are up $0.95 at $85.95. It's not 
concerning to see that packers weren't aggressive in Friday morning's cash hog 
trade, as they were aggressive in the cash market earlier in the week and want 
to see how next week's demand holds before they throw more money at chasing 
thin hog supplies. Watching to see where the afternoon's pork cutout value 
closes will be important.

   The projected CME Lean Hog Index for July 22 is down $0.04 at $112.23, and 
the actual index for 7/21/2021 is down $0.08 at $112.27. Hog prices are 
unavailable on the National Direct Morning Hog Report due to confidentiality. 
However, we are able to see that there's been 3,126 head sell and that the 
five-day rolling average is at $105.99. Pork cutouts total 160.22 loads with 
147.42 loads of pork cuts and 12.80 loads of trim. Pork cutout values: up 
$4.72, $127.03.

   ShayLe Stewart can be reached at shayle.stewart@dtn.com




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