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DTN Midday Livestock Comments          07/22 12:00

   Cattle Find Support, Rally Into Thursday Afternoon

   The lean hog market rallied earlier in the week, but upon Thursday's arrival 
the cattle contracts have stepped into the driver's seat of the market. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   Live and feeder cattle futures are rallying as feeders delight in a lower 
trending corn market and the live cattle market celebrates a strong export 
report. Meanwhile, lean hog futures are scaling lower, feeling bent out of 
shape from a less-than-exciting export sales report. December corn is down 9 
cents per bushel and December soybean meal is down $7.90. The Dow Jones 
Industrial Average is down 24.81 points and NASDAQ is up 20.58 points.

   LIVE CATTLE:

   Even though the cash cattle market is trending lower, live cattle futures 
are rallying alongside the eager and optimistic feeder cattle futures. August 
live cattle are up $1.10 at $121.15, October live cattle are up $1.55 at 
$126.80 and December live cattle are up $1.00 at $132.07. The live cattle 
market was thankful to see Thursday morning's strong export report, which 
should help incentivize packers to continue to process cattle, at least at 
current levels. The cash cattle market is seeing some trade develop as cattle 
in Nebraska are selling for $195 ($3.00 lower than last week, with a delayed 
delivery set for Aug. 2 and Aug. 16) and Iowa has seen a handful of cattle 
trade live at $125.00. Otherwise, the market remains quiet without a lot of 
traction developing in the South.

   The Special Fed Cattle Exchange Auction held Thursday listed a total of 
2,295 head, of which 304 actually sold and 1,991 head were listed as unsold, as 
they did not meet the reserve prices that ranged from $118 to $121. Opening 
prices were at $118, high bids ranged from $118 to $119. The state-by-state 
breakdown looks like this: Texas 1,952 total head, with 304 head sold at 
$118.75, and 1,648 head unsold; Kansas 343 total head, none of which sold.

   Beef net sales of 25,100 metric tons (mt) reported for 2021 were up 
noticeably from the previous week and up 63% from the prior four-week average. 
The three largest buyers were South Korea (8,600 mt), Japan (5,200 mt) and 
China (4,100 mt).

   Boxed beef prices are higher: choice up $1.12 ($266.36) and select up $1.35 
($250.12) with a movement of 60 loads (33.27 loads of choice, 9.26 loads of 
select, 4.49 loads of trim and 13.43 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle futures rolled into Thursday's debut and chased the green 
trading marketplace ever since the day's initial bell. With corn prices lower 
and feeder cattle buyers eager to source cattle and to get their loads filled, 
it's been an easy trading day for the complex. August feeders are up $2.25 at 
$159.02, September feeders are up $2.17 at $161.47 and October feeders are up 
$2.15 at $163.17. The spot August contract is going to come up against some 
resistance at $160.00 and will soon have to decide how serious traders are 
about rallying this market higher and if the fundamental support is there to 
back to the movement.

   LEAN HOGS:

   Lean hog futures are scaling lower upon finding a lukewarm export report and 
seeing that China wasn't one of the aggressive buyers. The market knew better 
than to get its hopes up that China would be a large buyer as U.S. pork prices 
are still considerably strong. But once news broke about the 11 confirmed 
African swine fever cases in China this past year -- the market grew hopeful. 
August lean hogs are down $0.52 at $106.05, October lean hogs are down $1.25 at 
$91.15 and December lean hogs are down $0.77 at $84.55.

   The projected CME Lean Hog Index for 7/21/2021 is down $0.08 at $112.27, and 
the actual index for 7/20/2021 is up $0.02 at $112.35. Pork cutouts total 
158.20 loads with 140.65 loads of pork cuts and 17.56 loads of trim. Pork 
cutout values: down $1.60, $120.49. Hog prices are unavailable from the USDA 
based on technical issues for the Morning's Cash Hog prices. Pork net sales of 
24,500 mt reported for 2021 were up noticeably from the previous week, but down 
12% from the prior four-week average. The three largest buyers were Mexico 
(10,000 mt), Japan (5,200 mt) and Canada (4,000 mt).

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




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