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DTN Midday Livestock Comments          08/03 11:37

   Livestock Futures Higher at Midday

   With support beaming from both the market's technical and fundamental points 
of view, higher prices are being achieved again on Tuesday. 

ShayLe Stewart
DTN Livestock Analyst


   The market has kept up with the pace set Monday as the live cattle, feeder 
cattle and lean hog contracts all trade higher. What helped the market 
confidently trade higher into Tuesday's debut was the fact that both pork 
cutouts and boxed beef prices closed higher Monday afternoon. If that can be 
accomplished again Tuesday afternoon, the market may stand a chance at 
continuing this rally into Wednesday. December corn is down 10 3/4 cents per 
bushel and December soybean meal is down $10.30. The Dow Jones Industrial 
Average is up 143.30 points and NASDAQ is up 26.49 points.


   Traders haven't tip-toed into the nearby live cattle futures Tuesday morning 
as both the August and October contracts see gains well over $1.00. As the 
market comes up against resistance, the rubber is going to have to meet the 
road to move the complex above longer-term resistance. Thankfully with boxed 
beef prices showing no immediate signs of retracting, the market sits in a fine 
position to rally, as the cash cattle market is the only side of the market 
that's been lacking. August live cattle are up $1.32 at $123.45, October live 
cattle are up $1.35 at $128.62 and December live cattle are up $0.92 at 
$133.67. The countryside sits quietly heading into Tuesday afternoon without 
any bids being noted. Asking prices in the South are marked at $122-plus and in 
the North at $199-plus. The market isn't expecting to see much develop until 
Wednesday or later.

   Boxed beef prices are higher: choice up $4.06 ($285.06) and select up $2.63 
($266.01) with a movement of 56 loads (27.06 loads of choice, 11.95 loads of 
select, 10.61 loads of trim and 6.52 loads of ground beef).


   With corn prices trending lower, boxed beef prices scaling higher and live 
cattle futures rallying, why shouldn't the feeder cattle market be rallying? 
The feeder cattle contracts are rallying amid phenomenal technical and 
fundamental support. It's a great week for the market to be seeing such 
confidence from all sides as Superior hosts their big Video Royale sale where 
over 184,000 head of cattle will be offered. It's important that the market 
trades strong for those who are consigned to the sale, but also for those who 
are looking to better understand where the market sits and are looking to price 
their calves in the next week to 10 days. And with corn continuing to chop 
sideways and the April 2022 live cattle contract hitting Tuesday's noon hour at 
$140.00, buyers are thankfully feeling quite confident. August feeders are up 
$1.22 at $159.47, September feeders are up $1.15 at $163.12 and October feeders 
are up $1.10 at $165.57.


   With slaughter anticipated to be back to normal running capacity, packers 
buying close to 6,000 head in the morning's cash hog market and pork cutouts 
showing positive signs for a higher close -- the hog market is rallying! August 
lean hogs are up $0.77 at $108.27, October lean hogs are up $1.12 at $90.62 and 
December lean hogs are up $0.57 at $83.45. The support that's buzzing 
throughout the cattle futures has picked up momentum in the lean hog market as 
well and is allowing for the complex to rally confidently. If the market can 
round out the day with a higher pork cutout, this rally is very likely to 

   The projected CME lean hog index for 8/2/2021 is down $0.45 at $111.59, and 
the actual index for 7/30/2021 is down $0.04 at $112.04. Hog prices are lower 
on the National Direct Morning Hog Report, down $0.54 with a weighted average 
of $100.45, ranging from $98.00 to $104.00 on 5,680 head and a five-day rolling 
average of $101.97. Pork cutouts total 176.57 loads with 158.26 loads of pork 
cuts and 18.31 loads of trim. Pork cutout values: up $3.05, $131.76.

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

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