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DTN Midday Livestock Comments 08/05 11:37

08/05/2022


DTN Midday Livestock Comments 08/05 11:37

Cattle Aim to Close Higher Ahead of Weekend

With the cash cattle market able to push trade higher this week, both the
live cattle and feeder cattle contracts are looking to round out the week on a
stronger note to hopefully propel the contracts higher come Monday.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

Heading into the last trading afternoon of the week, the cattle contracts
are trading fully higher as the market clings to the fact that cash cattle
traded higher this week. Meanwhile, the lean hog contracts are trading mixed as
some of the nearby contracts are attempting to break through resistance but
it's unknown if they'll maintain these levels as fundamental support is touch
and go this week. December corn is up 5 1/2 cents per bushel and December
soybean meal is down $15.90. The Dow Jones Industrial Average is down 95.12
points.

LIVE CATTLE:

The live cattle contracts are pushing for higher prices heading into
Friday's afternoon as the market still clings to the fact that cash cattle were
able to trade higher this week. Thus far throughout the week, Southern live
trade has traded at mostly $135 to $136, which is steady to $1 higher than last
week's weighted averages. Northern dressed deals have been marked at mostly
$225 to $227, which is steady to $2 higher than last week's weighted average
basis Nebraska. It wouldn't be unlikely to see a little more clean-up trade
develop ahead of the week's end, but largely the business is done with. The
week's slaughter is anticipated to be another big one, which helps offset the
slight pressure from lower boxes. August feeders are up $0.35 at $138.05,
October feeders are up $0.57 at $144.22 and December feeders are up $0.40 at
$150.30.

Boxed beef prices are lower: choice down $1.18 ($265.10) and select down
$1.08 ($239.27) with a movement of 65 loads (40.45 loads of choice, 11.98 loads
of select, zero loads of trim and 12.58 loads of ground beef).

FEEDER CATTLE:

Even as the corn market pushed a $0.06 to $0.09 rally heading into the
afternoon's trade, the feeder cattle contracts don't seem to care as the nearby
contracts are pushing gains well over $1.00 higher. This past week was
incredibly important for the feeder cattle market. With cash cattle prices able
to trade $0.50 to $2.00 higher, it proves the fact that packers are clipping
though cattle and running through these supplies faster than originally
thought. Given that feeder cattle placements have been so high due to drought
managing practices, feeder cattle buyers needed to see that there was going to
be better demand for fats, which they began to see this week. As the market
inches closer to the fall run, feeder cattle demand should only get better and
has the potential to get extremely strong if the fat cattle market grows
stronger. August feeders are up $1.02 at $180.22, September feeders are up
$1.52 at $184.10 and October feeders are up $1.05 at $186.52.

LEAN HOGS:

The largest currently traded October lean hog contract has broken above the
market's short-term resistance at $97.50 and is trading higher into Friday's
afternoon. It's a toss-up at this point how the futures market will close, as
support is scarce throughout the complex, but both the October and December
2022 contracts are charging ahead despite cautions elsewhere. The biggest
things to watch for Friday afternoon will be how the day's estimated slaughter
and pork cutout values. Pork cutout values have ping-ponged around this week
and the market would like to see more stable and consistent support. October
lean hogs are up $0.90 at $98.50, December lean hogs are up $0.15 at $88.77 and
February lean hogs are down $0.10 at $91.35.

The projected lean hog index for Aug. 4 is up $0.48 at $122.09, and the
actual index for Aug. 3 is up $0.67 at $121.61. Hog prices are lower on the
Daily Direct Morning Hog Report, down $3.37 with a weighted average of $123.67,
ranging from $115.00 to $135.00 on 5,499 head and a five-day rolling average of
$125.75. Pork cutouts total 153.14 loads with 134.90 loads of pork cuts and
18.24 loads of trim. Pork cutout values: down $0.31, $124.49.

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




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