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DTN Midday Livestock Comments          07/24 11:22

   Livestock Prices Mixed Midday Wednesday

   October cattle and hog prices are higher on the week, but are mixed early 
Wednesday, waiting for cash cattle trade to develop, while hogs challenge their 
highest prices in a month.

Todd Hultman
DTN Lead Analyst


   August feeder cattle are trading lower at midday Wednesday, but remain in a 
sideways trading range while October live cattle are modestly lower. October 
lean hog futures continue to extend their highest prices in a month with 
support from higher pork cutouts.


   October live cattle futures are trading up $0.65 at $185.47, down a little 
from their highest prices in four months and backing down from challenging the 
highest October prices on record. The market will need a strong reason to keep 
going higher from here and one of the arguments is that even at this level, 
futures prices are $7 below the price of live steers in the five-state area. 
Arguing a more cautious future, there is reason to expect seasonal pressure 
toward fall, the slaughter pace has slowed and boxed beef prices may have seen 
their peak for the year. Limited trade was reported in Kansas at $187 Tuesday, 
but it may not be indicative of how prices will look later this week.

   In the bigger picture, retail beef demand remains in good shape, but the 
seasonal trend appears to have peaked. USDA's report on Wednesday morning 
showed choice boxed beef up $0.09 at $313.30 and selects down $1.65 at $295.01 
with 125 total loads. Cattle slaughter in 2024 is down 4.5% from a year ago, 
the result of fewer cattle available. The slaughter pace was active until 
recently, but has now slowed. The first two days of this week show 238,000 head 
slaughtered, slightly below last week's pace that only saw 584,000 slaughtered. 
Dow Jones estimated cattle slaughter at 122,000 for Wednesday, up from 121,000 
a week ago.

   Friday morning's radar is mostly clear with hot temperatures expected to 
stress livestock in the western Plains the next couple weeks or more. Overall 
pasture conditions are better in the western Plains than a year ago so some 
herd expansion is possible this year, but to date there have been there have 
been no strong signs of heifer retention.


   August feeder cattle are trading down $2.00 at $256.75, staying within the 
confines of a symmetrical triangle formation that goes back to September 2023. 
Technically speaking, a breakout above $264.00 or below $253.00 would suggest 
the emergence of a new trend in the same direction. Fundamentally speaking, the 
August futures price is near the CME Feeder Index at $256.67 and appears to be 
struggling to go much higher, unable to show the same bullish enthusiasm we saw 
earlier this year.

   As mentioned above, better pasture conditions in the western Plains and 
cheaper hay prices are supporting this year's calf crop, but USDA's latest 
on-feed report showed no significant drop in the number of heifers put on feed.


   October lean hogs are trading up $0.52 at $77.65, continuing to push higher 
after reversing direction earlier this month. It is interesting how this 
month's bullish reversal of direction closely matches the sharp upturn seen in 
May 2023, the last time October prices tried to trade below $70.00. The odd 
thing about this month's reversal is that we still see national negotiated hog 
prices at $84.74 Wednesday morning, trading below formula prices at $90.39. 
Both prices, however, are higher this week, while demand is being helped by the 
highest cutout prices since August 2023, quoted at $103.71 on Wednesday morning 
on 152.23 loads. Higher prices of loins and bellies were offsetting lower 
prices of ribs and hams. Also reflecting firm cash prices, the CME Lean Hog 
Index was projected at $90.08 for Monday, up $1.46 from a week ago.

   So far in 2024, hog slaughter is up 1% from a year ago, keeping a fairly 
consistent pace. So far this week, slaughter totaled 934,000, down from 955,000 
last week. For Wednesday, Dow Jones' estimated hog slaughter at 482,000, up 
from 478,000 a week ago.

   Todd Hultman can be reached at Todd.Hultman@dtn.com



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