Cattle Market Summary 7.12.24

July 12, 2024

GENERAL COMMENTS:

All in all, it was a quiet day for the livestock complex, as traders allowed the contracts to close mildly higher, but not much else exciting happened throughout the day. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.73 with a weighted average price of $83.04 on 1,625 head. December corn is up 4 cents per bushel, and December soybean meal is down $1.40. The Dow Jones Industrial Average is up 247.15 points.

From Friday to Friday, livestock futures scored the following changes: August live cattle down $4.05, October live cattle down $3.10; August feeder cattle down $2.83, September feeder cattle down $4.13; July lean hogs down $1.18, August lean hogs down $0.72; July corn down $0.11, September corn down $0.09.

LIVE CATTLE:

It was a slow, quiet day for the live cattle complex, as the contracts traded mildly higher throughout the day's trade, but no more sizeable cash cattle sales were reported. August live cattle closed $0.12 higher at $182.37, October live cattle closed $0.57 higher at $184.07, and December live cattle closed $0.42 higher at $185.47. Throughout the week, Southern live cattle traded at mostly $188, which is $2-$4 lower than last week's weighted average. Northern dressed cattle traded mostly at $312, which is $2 lower than last week's weighted average.

Friday's WASDE report was relatively supportive to both the beef and cattle markets for the rest of 2024. Beef production for 2024 was increased by 65 million pounds. Although the number of cows being slaughtered has been reduced because of availability, fed steer and heifer processing speeds are expected to remain aggressive throughout the remainder of 2024. Quarterly steer price projections were increased for 2024 as well: second-quarter steer prices in 2024 are expected to average $188.42 (up $2.42 from last month), steer prices in the third quarter are expected to average $190 (up $7 from a month ago) and steer prices in the fourth quarter of 2024 are expected to average $188 (up $2 from last month). And steer prices in the first quarter of 2025 are anticipated to average $188 (up $2 from last month's projections). 2024 beef imports fell by 25 million pounds from last month's report, but 2024 beef exports were increased by 90 million pounds.

Friday's slaughter is estimated at 118,000 head -- 2,000 head more than a week ago and 2,000 head less than a year ago. Saturday's slaughter is expected to be around 7,000 head. The week's total slaughter is estimated at 601,000 head -- incomparable to last week but 32,000 head less than a year ago.

Boxed beef prices closed mixed: choice up $0.41 ($322.06) and select down $1.07 ($302.31) with a movement of 102 loads (70.32 loads of choice, 12.95 loads of select, 6.15 loads of trim and 12.91 loads of ground beef).

MONDAY'S CATTLE CALL: Steady to somewhat lower. As indicated by Friday's WASDE report, fed cattle prices are expected to remain strong through 2024. So, packers will likely use this time to work the market down before beef demand picks back up and prices trend higher again.

FEEDER CATTLE:

All in all, Friday treated the feeder cattle complex well, as the contracts were able to steady gain position and maintain their higher price through the day's end, which largely stemmed from the added support of the live cattle market's higher trade. Feeder cattle sales were strong again this last week even though temperatures were hot, but traders didn't seem encouraged by the fundamental point. Their only concern was about what the live cattle market was doing and traded accordingly. August feeders closed $2.50 higher at $258.65, September feeders closed $1.75 higher at $258.10 and October feeders closed $1.45 higher at $257.55. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week, steers were $5-$10 lower, and heifers were $1-$2 lower. Slaughter cows sold $1-$4 lower, and slaughter bulls traded steady. Feeder cattle supply over 600 pounds was 70%. The CME feeder cattle index 7/11/2024: down $0.49, $261.04.

LEAN HOGS:

The lean hog complex was able to round out Friday's trade mostly higher, although the early 2025 contracts did close slightly lower. August lean hogs closed $1.77 higher at $88.45, October lean hogs closed $0.75 higher at $70.15, and December lean hogs closed $0.07 lower at $62.37. As Friday's WASDE report indicated, the increase in supply moving forward from more pigs per litter could add some supply pressure early next year, which is likely why the early 2025 contracts softened slightly. Pork cutouts totaled 329.06 loads with 296.58 loads of pork cuts and 32.48 loads of trim. Pork cutout values: up $1.81, $96.23. Friday's slaughter is estimated at 470,000 head -- 25,000 head more than a week ago and 14,000 head more than a year ago. Saturday's slaughter is projected to be around 26,000 head. The CME lean hog index 7/10/2024: down $0.02, $88.65.

Friday's WASDE report showed mixed support for the pork and hog markets through the rest of 2024. 2024 pork production was increased by 35 million pounds, as not only are carcass weights expected to increase through the second half of the year, but packers are also running more aggressive chain speeds. Quarterly hog price projections were a little disheartening as the influx in supply is likely going to affect cash prices. Hog prices in the second quarter of 2024 are expected to average $65.53 (down $0.47 from last month's report), hog prices in the third quarter are expected to average $63 (down $5 from last month's report) and hog prices in the fourth quarter of 2024 are expected to average $56 (down $3 from June's report). And hog prices in the first quarter of 2025 are expected to average $56 (down $3.00 from last month's projections). 2024 pork imports remained unchanged at 1,213 million pounds, and pork exports for 2024 fell by 115 million pounds.

MONDAY'S HOG CALL: Steady. Packers have been showing more interest in the cash market early in the week, which could push prices slightly higher again on Monday.

Source: DTN, ShayLe Stewart DTN Livestock Analyst