Friday Closing Livestock Market Summary - Future Fall Into the Closing Bell

GENERAL COMMENTS: Cattle futures could not maintain the earlier market strength Friday, resulting in losses for the week with contracts closing near the lows. This leaves the market in a bearish sideways range. Lean hog futures followed suit as they were unable to follow-through on the strength generated this week. Friday to Friday livestock futures posted the following changes: August live cattle gained $0.38, with October down $0.48. September feeder cattle down $0.85, with October down $1.72. October lean hogs gained $4.23, with December hogs up $4.60. Cash cattle trading finished Friday at $103, down $3 from last week in the South and around $171, down $4, for last week in the North. Packers held bids at lower prices seeing no need to raise those bids due to the negative futures trade. According to the closing National Daily Direct hogs Friday afternoon report, the base price was $2.14 lower with a range of $49.00 to $57.50 and a weighted average of $55.78. Corn futures declined 1 3/4 cents. The Dow gained 41 points with the NASDAQ down 11 points.

LIVE CATTLE: Cattle futures looked very promising after early losses. However, trading during the final hour turned ugly with contracts closing lower than Thursday, and the lowest close since August 19. This certainly did not improve the outlook for next week. The August contract went off the board with October taking over posting substantial discount. Boxed beef cut-outs were mixed. Choice was $0.42 lower at $231.77 and select down $0.51 at $212.27. There were 35 loads of choice cuts, 14 loads of select cuts, 13 loads of trimmings, and 11 loads of ground beef.

TUESDAY'S CASH CATTLE CALL: Lower. Packers will be looking to for more cattle next week, but will bid lower due to the weakness of cash and futures.

FEEDER CATTLE: Triple-digit losses dominated the complex as contracts posted the lowest close since August 13. The impact of the trading after the Tyson fire has keep a very bearish grip on the market. There is very little bullishness in the market as long as cash cattle trade lower.

LEAN HOGS: The uptrend for the week remains intact, but futures could not capitalize on Thursday's strength. Thursdays gains were eliminated and them some as traders took profits for the holiday weekend. Spillover weakness came from the cattle as futures fell during the final hour of trading. Pork carcass values gained $0.75 increasing to $72.31 per cwt. The CME lean index for 8/28 is $71.24, down $1.39 with the projected two-day index for 8/29 at $69.45, down $1.79.

TUESDAY'S CASH HOG CALL: Steady to $1 Lower. A plentiful supply of hogs remain, with packers limiting bids due to weakness of cutouts. The holiday-shortened week will reduce the aggressiveness of packers.

#completeherdhealth

Friday Midday Livestock Market Summary - Cattle Prices Show Mid-Session Rebound

General Comments

Friday's markets are mixed for outside commodities, while the September U.S. dollar index turned higher, possibly related to unconfirmed talk of the U.S. and China talking trade again. Dow Jones Industrials were higher earlier Friday, but are now near Thursday's close.

LIVE CATTLE:

October cattle are down 0.37 at mid-morning, still under bearish pressure, while the market is still trying to adjust to the loss of the Tyson plant in Kansas earlier this month. Dow Jones estimated Friday's cattle slaughter at 117,000 head and the Saturday slaughter at 69,000. That should be enough to keep the weekly total roughly steady, but in the larger picture it is still disappointing that total cattle slaughter is up just 1% so far in 2019 -- an indication of demand that was already flat before the Tyson plant was lost. Friday morning started with light trade in the South at $103, down $3 from last week's trade. Thursday saw trade around $170 in the North, which was $5 lower than last week. More business is expected to develop later Friday. Meanwhile, choice boxed beef was priced at $231.58 in USDA's morning report, down $6.30 from a week ago. Selects were at $212.31, down $1.71 from a week ago.

FEEDER CATTLE:

October feeder cattle are up 0.47 at $132.45 Friday morning, coming back from an initial sell-off that took prices down $1.77 from Thursday's close. December corn is on track for a modest gain this week, but is still near its lowest prices in 2019. Concerns about corn supplies not being available in the new-crop season have largely dissipated, except for local areas where spring planting weather was the worst. Normally, feeders would rebound on news like that, but buyers remain cautious while demand for cattle has been lackluster in 2019. Technically, October feeder cattle do appear to be building support around $130, the lowest October prices in over two years.

LEAN HOGS:

October lean hogs are trading down $1.15 in Friday's mid-session, still protecting a modest gain for the week after last Friday's tariff news from China took October prices to its lowest close in almost a year. Also pressuring prices, USDA's morning report showed pork carcass at $71.18, down 38 cents from Thursday afternoon, but down nearly $9.00 from a week ago. In the short-term, last Friday's close may have been excessively bearish, but there is no question that the trade dispute with China has hurt U.S. hog prices in 2019 and kept the U.S. at the back of the line as far as exports to China are concerned. Even so, U.S. pork exports are up 15% in 2019 from a year ago and that should help prices find an end to this four-month downward slide. Technically speaking, $60 in October hogs represents a 75% retracement of the August 2018 to April 2019 rally and is a good candidate for possible support in spite of Friday's lower trade.

#completeherdhealth

Friday Morning Livestock Market Summary - Mixed Trade Expected

GENERAL COMMENTS:

There was some limited cash activity in the North Thursday, unfortunately trading was $3 to $5 lower than last week. The holiday weekend has some influence on the aggressiveness of packers as the need to purchase may not be as urgent as usual. Packer bids are holding at $105 with asking prices at $107 to $108 in the South with bids and $170 to $172 and asking prices at $178 to $180 in the North. Lower cash trade is making it difficult for futures to break out of the range of the past three weeks. Huge chart gaps loom above the market that likely will be filled at some point, but underlying cash needs to provide solid support. Friday is the last trading day for the August contract with the October taking over as the front month next week.

Lean hog futures have so far put in an impressive week with a $5.60 per cwt rise from the close last Friday. Some technical indicators suggest further upside should unfold. However, the quick rise this week may lend itself to some profit-taking before the extended weekend. Futures still need to break above the overall downtrend before traders become more comfortable with gains. Pressure may stem from the possibility of lower cash trading due to weakness of cutouts.

	BULL SIDE		BEAR SIDE
1)	The October contract taking over as front-month next week carrying a substantial discount to cash may result in strong buying interest.	1)	Cash cattle trading $5.00 lower does not lend itself to the market, finding solid support in the near-term.
2)	Packers limited interest in procuring cattle this week may result in more aggressive buying interest next week as plants need to maintain processing capacity and fill demand.	2)	Labor Day signals the end of summer as schools are back in session and the grilling season slows somewhat. This may have an impact on cutout values in the near-term.
3)	Lean hog futures should see some follow-through buying Friday as traders may continue to short-cover into the extended weekend. The impressive rise in prices and bullish technical indicators should provide support.	3)	Although lead hog futures have increased significantly this week, the October contract is still in an overall downtrend. Lower cash may keep upside potential limited.
4)	Trading may be somewhat lighter Friday as it is an extended holiday weekend. This could allow futures to move higher with lighter seller resistance.	4)	Pork values have been struggling and have yet to generate solid support. Cash is expected to trade steady to lower in response.

#completeherdhealth

Thursday Closing Livestock Market Summary - Buyer Support Holds

GENERAL COMMENTS:

Even though livestock futures were unable to hang onto session highs late Thursday, the ability to close cattle and hog futures higher is a moral victory. Corn futures trickled higher in limited activity. December corn futures closed 1/4 cent higher. Stock markets are higher in moderate trade. Dow Jones is 326 points higher with NASDAQ up 116 points. Light cash trade in Nebraska at $105 live and $170 to $173 dressed. Most trade is holding at $170 per cwt. This is generally $5 per cwt lower than last week. Trade in the South still remains quiet, and may hold out until sometime Friday. The lower prices will not go down easy heading into the holiday weekend, but lackluster packer interest with the short processing week and scheduled contracts coming due will likely severely limit the overall need for packers to buy negotiated cattle. Asking prices are holding at $107 to $108 in the South and $178 to $180 in the North. National Daily Direct afternoon hog report is $1.96 lower with a weighted average of $57.87 per cwt. Full range of $50 to $60 per cwt on 8,404 head sold.

LIVE CATTLE: Despite firm gains, live cattle futures still remain vulnerable to late-week pressure ($0.17 to $0.60 higher). Live cattle futures slowly pulled away from midday gains, but the ability to close higher following late-day market pressure earlier in the week which eroded strong morning gains is significant as it indicates market volatility is easing. October futures still remain under the $100 per cwt threshold at closing bell, but price shifts through the session that moved above that level created technical support and hope that additional commercial support may soon develop through the entire complex. Trade volume and movement is expected to remain subdued Friday ahead of the holiday weekend as many traders appear comfortable with current market positions and are willing to wait until September before stepping back into the complex. Beef cut-outs: mixed, $0.97 higher (select, $212.78) and down $0.77 (choice, $232.19) with moderate demand and offerings, 101 loads (71 loads of choice cuts, 15 loads of select cuts, 4 loads of trimmings, 11 loads of coarse grinds).

FRIDAY'S CASH CATTLE CALL: $3 to $5 lower. Limited trade in the North developed Thursday. This could spark follow-through pressure late in the week in all areas as feeders may unload cattle they are unwilling to take into September, but put the rest on next week's showlists.

FEEDER CATTLE: Early gains hold, helping to spark renewed interest through feeder cattle contracts ($0.02 lower to $0.55 higher). Feeder cattle futures closed mostly higher following strong underlying support moving into the complex. Unlike buyer interest seen earlier in the week, the ability to hold gains into closing bell will be significant as it is helping to solidify market stability at the end of the week. Although nearby feeder cattle futures remain near the bottom of the short-term range, the ability to close above $133 per cwt in the September contract is significant in sparking late-week gains and additional commercial buyer interest ahead of the holiday weekend. CME cash feeder index for 8/28 is $138.69, up 0.07

LEAN HOGS: Technical support redeveloped, sparking a strong Thursday rally ($0.20 to $1.95 higher). December lean hog futures led the complex higher with a $1.95 per cwt rally. This moved prices to $65.65 per cwt, and quickly broke through short-term resistance levels. By setting a new monthly high in the December contract, limited technical support is rekindling as traders ventured to the topside of the sideways market range that has contained the complex over the last month. This is likely to spark increased end-of-the-week buyer support despite continued trade uncertainty and eroding pork values. Pork cutouts trickled lower with increased pressure in most primal cuts. Pork cutout values fell $0.45 per cwt, moving to $71.56 per cwt on 326 loads. CME cash lean index for 8/27 is $72.63, down 0.89. DTN Projected lean index for 8/28 is $71.24, down 1.39.

FRIDAY'S CASH HOG CALL: Steady to $2 lower. Unchanging direction in cash markets and pork values continue to push prices lower as packers still focus on aggressive procurement levels due to significant plant margins. Friday slaughter numbers are expected at 473,000 head. Saturday runs are expected at 83,000 head.

#completeherdhealth

Thursday Midday Livestock Market Summary - Limited Buying Continues Through Morning Trade

General Comments

Active triple-digit gains have quickly developed in lean hog and feeder cattle futures Thursday morning. The initial follow-through rally seen in the lean hog complex at opening bell briefly broke through short term resistance levels and moved to new August highs, before eroding slightly through the rest of the morning. Firm gains have slowly but steadily developed across all cattle futures as the previous pressure has created renewed support through the entire complex at current price levels. Corn futures are mixed in light morning trade. December corn futures are steady. Stock markets are higher in active trade. Dow Jones is 398 points higher with NASDAQ up 125 points.

LIVE CATTLE:

Firm gains have steadily developed Thursday morning with increased underlying support developing across the entire complex. Strong gains in feeder cattle futures have renewed buyer interest in most contracts, allowing for increased underlying support to develop through the rest of the complex. Cash cattle trade is starting to slowly develop with a few trades in Nebraska at $105 live and $170 dressed. This is generally $5 per cwt lower than last week's average, and viewed as generally disappointing given the wide gap between cash markets and beef values that remains. Bids are unavailable in all other areas, but may become more evident through the rest of the day. Asking prices remain at $107 to $108 live in the South and $178 to $180 dressed in the North. Boxed Beef cut-outs at midday are mixed, $0.31 higher (select) and down $1.08 (choice) with moderate movement of 56 total loads reported (42 loads of choice cuts, 9 loads of select cuts, no loads of trimmings, 5 loads of ground beef).

FEEDER CATTLE:

Strong triple-digit gains have moved into feeder cattle futures following a slow and sluggish start. This limited additional movement through the complex is bringing commercial traders back to the market who have been sitting on the sidelines over the last couple of weeks. The concern if these gains can hold into closing bell remains a valid one as prices posted strong early gains Wednesday, but faded quickly in the last hour of trade. The ability to regain market support through the end of August will continue to spark increased support through the entire cattle complex.

LEAN HOGS:

Firm triple-digit gains have continued to hold through lean hog futures despite unable to continue early morning market momentum. With December contracts trading above $65 per cwt, this moves prices to August highs, and officially, but narrowly breaks out of the sideways trading range seen over the last month. Although the underlying concern of global trade continues, the focus on domestic clearance is likely to spark renewed support through the near future. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.90 at $57.93 per cwt with the range from $50 to $60.00 on 5,919 head reported sold. Pork values continue to weaken following additional sharp losses in primal cuts. Pork cutouts fell $1.53 per cwt at $70.48 per cwt with 177 loads traded. Lean hog index for 8/27 is $72.63, down 0.89, with a projected two-day index at $71.24, down 1.39.

#completeherdhealth

Thursday Morning Livestock Market Summary - Mixed Trade Expected in Early Trade

GENERAL COMMENTS: 

Cash cattle trade is expected to become much more active over the next couple of days, with packer interest likely to improve through the morning. A few cattle were sold in Nebraska and Kansas Wednesday afternoon, with prices at $103 to $104 in the South and $172 to $175 in the North. Although the numbers sold is limited, the lack of support from last week's levels is somewhat disappointing, and could create bearish market indications through the end of the week. With the Labor Day holiday on Monday limiting procurement levels, and additional contracts expected to be delivered after the first of the month, it is uncertain how many additional cattle need to be bought before the end of the week. This could further limit packer interest or aggressive bidding for cattle in the near future. Secretary Perdue announced Wednesday afternoon that he has directed the Packers and Stockyards Division to investigate recent beef price margins. Following the Tyson plant fire on Aug. 9, plant margins surged as beef values and cattle prices quickly and aggressively moved in opposite directions. It is uncertain the timeline or speed of an investigation. The underlying weakness in cattle futures trade is expected to continue, with prices remaining under pressure. But at current levels, the market remains oversold, creating the potential for a late month rally.

Early trade in lean hog futures is expected to focus on a combination of follow-through buyer support that developed midweek and limited position-taking. The tone of the lean hog complex remains weak given the growing supplies of pork, while cash hog prices continue to find little underlying support through the end of August. But long-term buyer support has trickled into the complex through the week with traders looking at the potential for productive trade talks with China when negotiators meet in September. Prices holding above support levels late last week is creating additional market confidence in the complex. Cash bids are expected steady to $2 lower with most bids $1 lower. Expected slaughter Thursday remains near 482,000 head. Saturday runs are expected at 83,000 head.

	BULL SIDE		BEAR SIDE
1)	Upcoming Labor Day holiday demand should help to clear additional beef supplies as the Labor Day weekend traditionally is viewed as the last major summer activity, and typically helps to support additional beef demand.	1)	The inability to significantly move live cattle futures higher and hold them at higher levels through the end of August points to the underlying weakness still developing in the complex. This has the potential to spark additional market softness during early September.
2)	The announcement that the USDA will look into cattle margins over the past month, looking for any evidence of price manipulation, collusion or unfair practices, is a relief following the surge in packer margins since the Tyson plant fire on Aug. 9.	2)	Boxed beef values have started to erode slightly from recently elevated levels. This is not unexpected, but the fact that cash cattle and futures trade has gained limited ground in the last couple of weeks is disappointing and could add increased pressure once beef values move back to more normal levels.
3)	Moderate-to-strong buyer support has quickly redeveloped in deferred lean hog futures as traders focus on the potential for long-term demand growth despite recent uncertainty surrounding trade agreements with China.	3)	Continued strong underlying pressure remains in cash hog and pork values. The inability to stabilize wholesale pork prices will continue to spark additional market weakness in the complex.
4)	Despite the current trade issues with China, the fact that China will continue to need pork supplies to fill its food chain cannot be understated. Pork prices continue to steadily rise in China as overall production levels in the country are expected to fall through the end of the year. This is still bullish for global pork markets.	4)	Lack of positive news in the relationship with China on trade and the upcoming tariffs that are set to start on Sept. 1 keeps a dark cloud hovering over the entire hog market.

#completeherdhealth

Wednesday Closing Livestock Market Summary - Hog Futures Higher on Outside Market Support

GENERAL COMMENTS:

Firm, late-day gains held in lean hog futures based on underlying outside market support and increased commercial buyer activity moving back into the market. Cattle futures held early gains, but eroded near closing bell as traders focus on uncertain demand through late 2019. December corn futures closed 4 3/4 cents lower. Stock markets are higher in moderate trade. Dow Jones is 236 points higher with NASDAQ up 29 points. Light cash cattle trade developed in parts of Nebraska at $106 per cwt live basis. The amount of cattle reported sold is not enough to establish a good trend for the weekly market, but it did get the ball rolling. Most trade will be delayed until Thursday or Friday, although both sides desire to wrap things up sooner than later with the long holiday weekend approaching. Limited bids in Texas at $101 per cwt live basis and $175 dressed basis in the North. Asking prices have not deviated from early week levels at $108 in the South and $178 to $180 in the North. National Daily Direct afternoon hog report is $1.52 lower with a weighted average of $60.33 per cwt. Full range of $52 to $63.00 per cwt on 6,075 head sold.

LIVE CATTLE: Live cattle futures faded going into the closing bell ($0.32 higher to $0.72 lower). Limited support seen early in the Wednesday session evaporated through the end of the day with lightly traded August futures the only contract to hold a gain at closing bell. Other nearby live cattle futures fell 57 to 70 cents per cwt as traders slowly but steadily backed away from Monday's gains. The fact that the Japan trade agreement announcement is showing limited follow-through support is disappointing. There still seems to be growing uncertainty as to how supportive buyers will be in the fourth quarter. After markets closed, Ag Secretary Sonny Perdue announced that he directed an investigation into recent beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or other unfair practices. And, if there were, enforcement actions will be taken. This has been a major issue over the last two weeks with beef values and live cattle prices diverging in opposite directions following the plant fire on Aug. 9. Beef cut-outs: mixed, $1.10 higher (select, $211.81) and down $3.80 (choice, $323.96) with moderate demand and offerings, 148 loads (63 loads of choice cuts, 27 loads of select cuts, 10 loads of trimmings, 48 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL: Steady. Interest is developing on both sides with increased packer bids likely through the morning Thursday. It is uncertain just how far feeders will move away from early asking prices given current packer margins and aggressively strong beef values.

FEEDER CATTLE: Market weakness developed Wednesday despite morning support ($0.20 higher to $0.92 lower). Limited activity developed late Wednesday as traders slowly but steadily pulled back from earlier gains across the entire complex. This continued to spark some additional concerns that follow-through pressure may continue to develop through the end of the week. The strong support in outside markets seemed to bring positive market direction early in the day, although the increased corn prices are starting to be viewed as bearish once again in feeder cattle trade while traders became disappointed by the softness developing in most live cattle trade. CME cash feeder index for 8/27 is $138.62, up 0.24

LEAN HOGS: Late-day gains supported renewed buyer interest ($0.27 to $1.30 higher). Moderate support developed Wednesday afternoon following strong initial losses in nearby contracts. Early 2020 contracts were clearly the winner at midweek with triple-digit gains in February through August contracts. The move higher still leaves the market with a weak undertone given the recent price pressure as well as uncertainty about an upcoming trade deal with China. But reports focusing on sharp increases in pork prices in China and the long-term expectation that pork supplies in China will continue to not meet domestic demand has caused increased buyer support to redevelop. October futures remain less optimistic as time may be running out in spot-month contracts to see significant fundamental changes in the industry. Pork cutouts continued lower following further pressure in belly cuts. Pork cutout values fell $2.06 per cwt, moving to $72.01 per cwt on 308 loads. CME cash lean index for 8/26 is $73.52, down 0.98. DTN Projected lean index for 8/27 is $72.63, down 0.89.

THURSDAY'S CASH HOG CALL: Steady to $2 lower. Continued weakness is still developing across lean hog futures trade, although recent gains in futures may limit cash market declines at the end of the week. Thursday slaughter numbers are expected at 481,000 head. Saturday runs are expected at 83,000 head.

#completeforageprogram

Wednesday Midday Livestock Market Summary - Gains Help Spark Renewed Interest

General Comments

Firm gains have developed following sluggish morning trade. The focus on outside market strength is helping to add increased underlying support through the entire complex. Corn futures are higher in light morning trade. December corn futures are 1 1/4 cents higher. Stock markets are higher in active trade. Dow Jones is 192 points higher with NASDAQ up 23 points.

LIVE CATTLE:

Live cattle futures are steady to higher midday Wednesday with strong underlying support still seen in August futures as very limited activity holds as traders attempt to exit the lightly traded and soon to expire complex. Other nearby contracts are showing much less direction with prices steady to 5 cents higher, The firm support seen Wednesday morning in outside trade helped to pull price levels away from session lows, but the inability to sustain buyer interest leaves the market generally weak and vulnerable for another downside market shift over the next couple of days. Traders continue to remain encouraged by the ability for boxed beef values to rally back from Tuesday's losses, but sustained support will become a challenge given the limited procurement losses that were predicted following the Tyson plant fire. The wide spread between cash cattle and beef values will leave the market on edge as traders expect that this relationship cannot be sustained. Cash cattle interest still remains sketchy at best with a few token bids developing in Texas as $101 per cwt live basis. In general, most of cattle country remains quiet with packer interest still remaining undeveloped for the week. Bids may become more evident through the day Wednesday, although the wide gap between asking prices and early bids would suggest that trade may be pushed off until late in the week. Asking prices remain at $108 live in the South and $178 to $180 dressed in the North. Boxed Beef cut-outs at midday are mixed, $0.50 higher (select) and down $1.68 (choice) with moderate movement of 97 total loads reported (36 loads of choice cuts, 17 loads of select cuts, 6 loads of trimmings, 38 loads of ground beef).

FEEDER CATTLE:

Active gains have moved back into feeder cattle trade midmorning with outside market support helping to spark additional underlying interest through the entire complex. This may help to bring about increased trade volume through the entire cattle market. September futures remain firmly higher at $134.40 per cwt at midday, but a move above $136.60 per cwt would be needed in order to break out of the sideways trading pattern seen during the last couple of weeks. Continued steady buying support is still likely the best driver for increased commercial interest moving back into the complex through the end of the month.

LEAN HOGS:

Lean hog futures have quickly bounced higher and lower in a wide trading range Wednesday morning with uncertainty following market fundamentals, while trades seem less dogmatic about the direction of the economy midweek. Remaining 2019 contract months posted light to moderate pressure as strong losses redeveloped in cash hog and wholesale pork values midweek. The continued active pressure in belly cuts has caused traders to become more cautious about short-term meat demand. Light to moderate gains are holding through the rest of the complex as the focus on early 2020 contracts and the optimism that additional global demand will be seen even if China is not a larger player in the market is helping to solidify market activity. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.57 at $60.28 per cwt with the range from $52 to $63.00 on 3,440 head reported sold. Pork values continue to weaken following additional sharp losses in belly cuts. Pork cutouts fell $2.26 per cwt at $71.81 per cwt with 177 loads traded. Lean hog index for 8/26 is $73.52, down 0.98, with a projected two-day index at $72.63, down 0.89.

#completeherdhealth

Wednesday Morning Livestock Market Summary - Limited Early Movement Expected

GENERAL COMMENTS: 

Cash cattle activity remains quiet going into midweek with just a few token asking prices early in the week. Even these asking prices remain vanilla, at $108 in the South and $178 to $180 in the North. Packer interest may slowly develop through the day, but for the most part, it is not expected that active moves will develop until later in the week. The extreme discount between beef values and cash markets that has developed the last two and half weeks should limit additional short-term pressure in cash trade, but boxed beef values have also started to soften, giving back a portion of the overblown premiums, which developed following the Tyson plant fire in Kansas. The U.S and Canadian cattle report released Tuesday afternoon posted generally steady cattle numbers from year-ago levels. Although numbers were slightly lower, it was not statistically significant as percentage levels did not change. This gives a little bit clearer view that the weather conditions and flooding during the spring months did not have a significant statistical impact on overall cattle numbers. Cattle futures are expected mixed in limited early trade, although the underlying weaker tone Tuesday may cause additional pressure as traders continue to test last week lows with October futures still unable to consistently hold prices above $100 per cwt.

Lean hog futures were able to regain most of the early session losses Tuesday afternoon. This is viewed as a positive move, which may spark additional underlying support in the complex. Although prices have quickly shifted away from short-term lows set last week, the concern that continued large hog supplies in the pipeline combined with uncertain export movement will limit the upside of the complex the next couple of months. Technically, nearby lean hog futures appear to be establishing a longer-term trend, but with a more defined sideways trading range between $60 and $67 per cwt. The "will we, or won't we" shifts concerning a trade deal with China will continue to be a major factor in shifting markets back and forth through the rest of the summer, and likely the entire year. Hog supplies increased 3% from year ago as of July 1 in Tuesday's hog inventory report. This is no significant surprise to anyone who has followed the market as the market has expanded over the last year. But the confirmation of increased supplies does bring additional caution given the fact that overall global demand for U.S. pork remains under pressure. Cash bids are expected steady to $1 lower with most bids steady to weak. Expected slaughter Wednesday remains near 481,000 head. Saturday runs are expected at 61,000 head.

	BULL SIDE		BEAR SIDE
1)	Continued strong beef values should help to spark some underlying support through live cattle and cash markets given the wide gap in price levels currently.	1)	Strong cash market discounts continue through the entire beef market as traders focus on the wide spread between beef values and cash markets. This will continue to keep the entire cattle market under moderate pressure.
2)	The trade deal with Japan that is expected to be signed in September cannot be overlooked or dismissed. Even though we sometimes take trade with Japan for granted, the development of this trade agreement would help to solidify continued beef market strength.	2)	October live cattle continues to consistently push below the $100 per cwt price threshold. This is creating additional market softness, allowing for increased concern of market weakness to carry well into September.
3)	Lean hog futures bounced off triple-digit losses Tuesday, closing slightly lower in most nearby contracts. Moderate, late day activity indicates firming buyer interest is developing.	3)	Pork cutout values posted sharp losses Tuesday. Although trade activity remained high with a $27.41 per cwt loss in belly cuts pushing the entire cutout value nearly $5 per cwt lower for the day. This is expected to weaken underlying support in the near future.
4)	Despite the current trade issues with China, the fact that China will continue to need pork supplies to fill its food chain cannot be understated. Pork prices continue to steadily rise in China as overall production levels in the country are expected to fall through the end of the year, but it is still bullish for global pork markets.	4)	Hog supplies continue to improve with U.S and Canadian hog inventory increasing 3% from year-ago levels. The U.S. pig crop increased 4% over the last year, with total U.S. hogs at 75.02 million head.

#completeherdhealth

Tuesday Closing Livestock Market Summary - Cattle Inventories Steady

GENERAL COMMENTS: All livestock markets were under pressure Tuesday with traders unwilling to step back into the complex following concerns that trade issues with China remain far from resolved. Hog futures were able to regain initial losses, while triple-digit losses continued in cattle futures. Limited direction is seen in cash cattle trade with both sides waiting until later in the week in order to hopefully move markets in their respective direction. Bids were undeveloped at this point in the week, although limited asking prices redeveloped around $108 in the South and $178 to $180 in the North. Although both sides would rather not wait until late Friday, it is likely that delayed trade will be seen given the lack of follow-through support in futures trade. The National Daily Direct afternoon hog report was $1.14 lower ($54 to $63.00, weighted average $61.57) on 14,733 head sold. Corn futures eroded following widespread market pressure with December down 2 cents. Stock markets were lower in moderate trade with the Dow down 74 points and the NASDAQ down 21 points.

LIVE CATTLE: Futures closed $0.60 to $1.22 lower. Traders are steadily walking back early week gains with moderate-to-firm losses developing across the complex. A late-day move pushed spot-month October below $100 per cwt to close at $99.77 per cwt. The move below $100 per cwt is more of a psychological defeat to the market than a technical or fundamental benchmark. Traders continue to focus on strong supplies given the lower daily slaughter numbers and packers' general lackluster interest in securing more cattle. Although weekly kills continue to keep pace with pre-fire slaughter totals, the weakness in the futures trade continues to hold given limited incentive to aggressively push prices higher. Total cattle numbers as of July 1 were generally steady in the U.S. and Canada, according to a USDA cattle report released Tuesday. With no percentage change from 2018, overall beef cattle numbers were fractionally lower than last year. Beef cut-outs: lower, down $0.95 (select, $210.71) to down $1.30 (choice, $236.76) with light demand and moderate-to-heavy offerings, 112 loads (43 loads of choice cuts, 40 loads of select cuts, 17 loads of trimmings, 11 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL: Steady. Asking prices are expected to slowly redevelop midweek in current ranges, but bids are not expected to be active at this point in the week. Most trade is likely to be pushed to the last half of the week, although packer interest may slowly improve.

FEEDER CATTLE: Futures closed $0.10 to $2.22 lower. Pressure developed in the feeder cattle market Tuesday with traders quickly erasing early week gains. Back-and-forth market shifts based on alternating tariff announcements and hopes that a trade deal with China is near have left the market empty once again. This allowed moderate-to-active pressure to develop in most markets Tuesday afternoon. The September futures contract was down $2.22 per cwt, searching for short- and long-term support. The continued focus on ample supplies over the last six months and uncertain demand overshadowed early week news of a trade deal in the works with Japan that the U.S. hopes to have approved before the end of the year. The CME cash feeder index for 8/26 is $138.38, up $0.84.

LEAN HOGS: Futures closed $0.10 to $1.12 lower. Limited pressure developed late Wednesday as traders tried to slowly back away from early week gains. Triple-digit losses that developed at midday were unable to spark late-day buyer interest. With most nearby contracts holding very narrow losses of 10 to 20 cents per cwt, the focus on potential market stability is helping to create some underlying support between $62 and $63 per cwt. The significant discount to cash markets that the futures trade continues to hold is likely to limit the downside movement in the market despite continued concerns of China trade issues and their impact on the lean hog trade. Total hog inventory in the U.S. and Canada increased 3% from last year, confirming what was already known in the industry: that growing supplies will keep the pipeline full and ample product available. Pork cutouts posted sharp losses following a $27-per-cwt loss in belly cuts. Pork cutout values fell $4.92 per cwt, moving to $74.07 per cwt on 432 loads. CME cash lean index for 8/23 is $74.50, down $1.44. DTN Projected lean index for 8/26 is $73.52, down $0.98. 

WEDNESDAY'S CASH HOG CALL: Steady to $2 lower. Pressure once again in futures trade limited underlying support. With growing supply levels available to the market, there continues to be increased weakness through the entire complex. Wednesday slaughter numbers are expected at 482,000 head. Saturday runs are expected at 62,000 head.

#completeherdhealth

Tuesday Midday Livestock Market Summary - Livestock Futures Erode

General Comments

Moderate to strong pressure has developed late Tuesday morning although the tone and activity levels remain extremely different than over the last couple of days. Limited market pressure trickled into morning trade as losses have slowly built. But there seems to be the focus on underlying support developing which may stabilize price levels over the next couple of days. Corn futures are lower in light morning trade. September corn futures are 1/4 cents lower. Stock markets are lower in active trade. Dow Jones is 125 points lower with NASDAQ down 46 points.

LIVE CATTLE:

Firm pressure is seen in live cattle trade with futures holding $1 to $1.50 per cwt losses in nearby contracts. The lack of support in the market is evident as traders back away from trade hopes with China. The expectation that this will be a long road before any significant developments are seen has caused October futures to push below $100 per cwt once gain. Cash cattle activity remains quiet with no additional bids or asking prices developing. Trade is expected to hold out until later in the week. Boxed Beef cut-outs at midday are mixed, $0.24 lower (select) and up $0.03 (choice) with light movement of 43 total loads reported (18 loads of choice cuts, 14 loads of select cuts, 8 loads of trimmings, 4 loads of ground beef).

FEEDER CATTLE:

Firm pressure is seen Tuesday morning as traders have quickly backed up from early week gains. The concern of continued trade issues and firm weakness in live cattle trade has sparked increased underlying weakness through the entire complex.

LEAN HOGS:

Market pressure has pulled back from the aggressive Monday gains. Although the tone of the market remains weak and prices are lower, significant selling pressure is holding out at this point. It is likely that traders are trying to find a sense of stability given the still firm domestic demand seen across the market. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $1.44 at $61.27 per cwt with the range from $55 to $69.50 on 4,539 head reported sold. Pork values firmed following aggressive gains in rib cuts. Pork cutouts added $0.98 per cwt at $80.63 per cwt with 120 loads traded. Lean hog index for 8/22 is $75.94, down 1.10, with a projected two-day index at $74.50, down 1.44.

#completeherdhealth

Tuesday Morning Livestock Market Summary - Market Volatility Remains Elevated

GENERAL COMMENTS:

Interest in cash cattle trade is expected to remain limited through most of the morning. A few initial asking prices restated is expected, but nothing of significance is likely to develop until midweek or later. Bids are unlikely early Tuesday, and when they do develop later in the week, limited initial movement from last week is likely. It is likely that asking prices will redevelop around $108 to $110 in the South and $178 to $180 in the North, while bids later in the week would likely start near $103 to $104 in the South and $172 in the North. That being said, both sides are likely to wrap things up before late day Friday ahead of the long holiday weekend. Limited attention is being put on the lower daily slaughter numbers as the freshness of the Tyson plant fire has faded and packers settle in to the "new normal," at least until the damaged plant comes back online. Daily slaughter levels have settled around 116,000 head with increased Saturday runs making up the difference between previous production the last two weeks. This is expected to be the new norm as overall plant throughput is likely to have little net change through the rest of the summer. Keeping up with increased supplies through the fourth quarter of the year is likely going to be the biggest challenge, but currently, cattle futures and trade is so short-term focused given the recent market gyrations that late year production capacity is still on the back burner of issues to deal with.

Market volatility has remained heightened through the last week with limit moves in either direction creating even more uncertainty and lack of long-term market direction. Limit gains developed on trade optimism Monday based on the idea that recent back-and-forth tariffs had made China want to come to the table and talk trade in a significant way, seems to have fizzled with uncertainty about where this will leave market optimism through the rest of the week. The announced trade deal in the works with Japan is expected to remain a positive move in the right direction. But it needs to be clear that this deal is yet to be signed, and there is still little detail about the specifics of any trade deal. The assumption is that increased market access for pork will be available, which will be a good sign for the pork industry, but access to the Japan market is still not a replacement to the Chinese market, which will likely be uncertain in the near future. Cash bids are expected steady to $2 lower with most bids $1 lower. Expected slaughter Tuesday remains near 480,000 head.

	BULL SIDE		BEAR SIDE
1)	Active early week gains in live cattle and feeder cattle futures have sparked underlying buyer support, creating the potential for late week gains redeveloping in the complex.	1)	Momentum in beef cutout values the last two weeks is quickly slowing. This is creating questions if the wide spread between cash and beef values can continue.
2)	The announcement of a nearly completed trade deal with Japan remains supportive for beef products, helping to create underlying confidence in long-term export demand for beef.	2)	Continued uncertainty surrounding trade issues with China is expected to create additional market volatility through the end of the week. This could add to the still weak market structure that developed the last two weeks.
3)	Limit gains Monday has once again broken away from long-term lows. The ability to bring additional buyer support to the complex Tuesday has the potential to test short-term highs, creating additional momentum through the end of the month.	3)	Pork values and cash hog markets continue to weaken. The uncertainty of short- or long-term movement in domestic demand and large hog supplies continues to cause concern given the wide discount of futures trade to cash prices.
4)	Lean hog futures remain oversold given the sharp pressure over the last week. This could create a sharp market correction following the emotional pressure sweeping through the complex the last week.	4)	The increased market focus and volatility on securing a trade deal with China seems to be creating more short-term market waves than long-term direction. The lack of substance between Monday's claims that any progress is being made in a trade agreement with China is likely to leave the market unsatisfied in the near future.

#completeherdhealth

Monday Closing Livestock Market Summary - Livestock Futures Up on Trade Hopes

GENERAL COMMENTS: Hog futures reacted Monday morning to an indication by President Trump that China is ready to move the trade talk process forward following Friday's announcement by both sides that tariff levels would be increased. This pushed October futures limit higher with triple-digit gains in most livestock contracts. Corn futures trickled higher in mixed trade through the day. December corn futures are 1/2 cents higher. Stock markets are higher in moderate trade. Dow Jones is 206 points higher with NASDAQ up 84 points.

CASH MARKETS: Cash cattle markets remain typically quiet for a Monday. Showlist distribution focused on mixed cattle availability as larger numbers are seen in Kansas, while most other areas are steady to lower. A few token starter bids have slowly developed in Nebraska with asking prices of $110 live in the North and $178 to $180 dressed. Most trade is expected to be delayed until the second half of the week, although all parties are looking to establish trade before late Friday and the upcoming holiday weekend. National Daily Direct afternoon hog report is $1.21 lower with a weighted average of $63.26 per cwt. Full range of $55 to $69.50 per cwt on 8,957 head sold.

LIVE CATTLE: Trade deals and trade talk rekindled buyer interest ($0.85 to $1.60 higher). Strong gains redeveloped in live cattle trade Monday, although prices were unable to retract all of Friday's losses in most contracts. October futures rallied $1.60 per cwt higher as traders turned their focus to lower than expected cattle on feed in July, the late weekend announcement that a trade deal with Japan is nearing its final stages and indications from President Trump that China is willing to restart trade talks following last week's tariffs. The latter seems too good to be true given the unchanging movement China has had so far, but with uncertainty in the market and the yuan moving to 11-year lows in relation to the dollar, it is possible that both sides are willing to make an agreement. It is important to remember, though, that the fundamental factors behind the trade issues are well rooted and not just financial; making the process tricky and much more complicated than willing to meet for talks. Beef cut-outs: mixed, $1.05 lower (select, $211.66) and up $0.54 (choice, $238.06) with moderate to good demand and moderate offerings, 87 loads (39 loads of choice cuts, 29 loads of select cuts, 12 loads of trimmings, seven loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL: Steady. Limited activity is expected Tuesday with bids likely to remain generally quiet until near midday. Asking prices are likely to redevelop in the North at $178 to $180 dressed, and likely to become more evident through the South -- around $108 to $110 per cwt. However, active trade is not expected until midweek or later.

FEEDER CATTLE: Buyers quickly reassemble following improved trade expectations ($$1.30 to $2.75 higher). Following the aggressive losses late last week, feeder cattle traders have reset with a much more robust mentality. The combination of a bullish cattle on feed report that posted cattle placements falling 2% from year ago levels, expectations that a trade deal with Japan are in the final states and the impression that trade talks with China may be back on has pushed gains to triple-digit levels in all feeder cattle trade. August futures posted a $1.20 per cwt rally, while September futures led the complex with gains of $2.75 per cwt based on the potential that follow through support may quickly develop through the end of the week.CME cash feeder index for 8/23 is unavailable at this time.

LEAN HOGS: Limit gains move back into hog futures ($1.97 to $4.50 higher). Lean hog futures rallied higher following aggressive buying that moved back into all livestock trade Monday morning. The pressure seen late last week following the announcement by China of added tariff levels, as well as generally weak market structures, was more than offset by expanded trading limits Monday. President Trump stated that China wanted to go back to trade talks following the weekend after accelerated tariff levels were exchanged. However, there is still little evidence that both sides will proceed with talks or that either side is willing to give up previous concessions that broke down the process in the past. Most of the market rally is based on hopes and potential that an agreement will be reached quickly. However, this emotional turmoil in the market may continue to create market volatility for some time to come. Pork cutouts continued lower as strong gains in rib primals was overshadowed by more aggressive losses in belly cuts. Pork cutout values fell $0.66 per cwt, moving to $78.99 per cwt on 281 loads. CME cash lean index for 8/22 is $75.94, down 1.10. DTN Projected lean index for 8/23 is $74.49, down 1.45.

TUESDAY'S CASH HOG CALL: Steady to $2 lower. Follow through pressure is still expected to be seen in cash hog markets as packers are not likely to get caught up in the wide market swings seen through the week. Most bids are expected to be steady to $1 per cwt lower. Tuesday slaughter numbers are expected at 480,000 head.

#completeherdhealth

Monday Midday Livestock Market Summary - Trade Hopes Spark Livestock Buying

General Comments

Active gains have flooded the livestock complex Monday morning. President Trump mentioned that China is willing to return to the table concerning trade talks. This quickly sparked active buying in most markets. Cattle and hog futures surged to triple-digit gains, offsetting most losses seen late last week. Corn futures are lower in light morning trade. September corn futures are 2 1/4 cents lower. Stock markets are higher in active trade. Dow Jones is 250 points higher with NASDAQ up 84 points.

LIVE CATTLE:

Traders quickly reacted to a combination of fundamental and outside market factors Friday morning, leaving a wake of sharp losses in its path. A strong increase in beef inventory in July compared to June took the industry and market by surprise. While announcements by China that it would increase tariffs on $75 billion of imports has left outside markets struggling late in the week. This has created active pressure in all contracts with nearby futures holding $2 per cwt losses. Despite limit losses in feeder cattle trade, so far there has been no attempt to test daily limits, but the general weakness in the complex could quickly spark additional late-day pressure in all live cattle futures. Cash cattle markets remain quiet with show list distribution and inventory taking expected to be the extent of interest through the day. Trade may not develop until Wednesday or later, although both sides will likely desire to wrap things up sooner rather than later given the upcoming holiday week. With lower procurement schedules next week due to the holiday, cash trade may remain sluggish. Boxed Beef cut-outs at midday are higher, $0.07 higher (select) and up $1.58 (choice) with light movement of 43 total loads reported (18 loads of choice cuts, 14 loads of select cuts, 8 loads of trimmings, 4 loads of ground beef).

FEEDER CATTLE:

Strong gains have quickly redeveloped Monday morning in all cattle markets. September feeder cattle futures have posted $2.92 per cwt gains with increased underlying support seen through the entire livestock markets while traders are focusing on outside market support based on hopes and expectations that progress may develop over the near future concerning a trade agreement with China. The bullish cattle on feed report that posted 2% lower placement levels in July is helping to solidify additional interest through the complex.

LEAN HOGS:

Triple-digit gains in lean hog futures are leading the entire livestock higher with spot October futures using expanded trade limits and holding a $4.27-per-cwt rally. This underlying support is based on hopes that progress can or will be made in trade talks with China. The back-and-forth announcement of tariffs on each other seen Friday, sparked widespread market pressure in an already weak market structure. The potential that talks can be reestablished is giving hopes to most traders. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.28 at $64.19 per cwt with the range from $55 to $69.50 on 4,539 head reported sold. Pork values firmed following aggressive gains in rib cuts. Pork cutouts added $0.98 per cwt at $80.63 per cwt with 120 loads traded. Lean hog index for 8/22 is $75.94, down 1.10, with a projected two-day index at $74.50, down 1.44.

#completeherdhealth

Monday Morning Livestock Market Summary - Trade Fight Takes Center Ring Once Again

GENERAL COMMENTS: 

Cash cattle activity is expected to remain sluggish early in the week following light-to-moderate trade that developed Friday. Cash cattle prices ended last week generally $1 per cwt higher in the South with most cattle selling at $106 per cwt, and $4.50 per cwt higher than last week's average at $175 dressed in the North. Showlist distribution and inventory taking is expected to be the main focus across the cash markets with trade likely to be pushed off until midweek or later. With the upcoming holiday weekend, it is likely that both sides will desire to wrap things up before late Friday afternoon. Friday's Cattle on Feed report is expected to be viewed slightly bullish with generally steady cattle on feed numbers of steady with last year levels and slightly under pre-report estimates. Placements were 2% lower than last year, and well below expected numbers. Cattle marketed came in above pre-report estimates, which should help to limit overall market pressure. But it is likely that any report news or potential support from recent beef values will be quickly washed away given the expansion of the trade war on China. The announcement early Friday that China will add tariffs to all remaining imports and increase tariffs already put into place will impact beef products. Late Friday President Trump announced increased tariff levels on all Chinese imports, sparking additional tensions that may keep the cattle complex under significant pressure in the near future.

Hog futures are expected to remain bearish following limit-loss trade Friday. Continued weakness in wholesale pork values and cash markets is being matched with additional trade war concerns as Friday's escalation of tariff announcements will likely spark additional pressure in the hog complex. The actual amount of tariffs placed on pork or other ag products seems to generally be the sideline to the story, as the main focus is the unrelenting tone that China will buy pork and other ag products from the U.S as a last resort. The announcements late Friday that Trump will increase tariffs on imports from China in reaction to China's announcement is not expected to be viewed positively by traders. With expanded trading limits available, lean hog futures have limited support following the swift move through $62 per cwt and below $60 per cwt on Friday. There still remains the next level of price support near $55 per cwt, but a move below that level in October and December contracts could spark additional strong pressure. Cash bids are expected steady to $2 lower with most bids $1 lower. Expected slaughter Monday remains near 472,000 head.

	BULL SIDE		BEAR SIDE
1)	Continued strong beef values point to underlying long-term market support based on strong domestic demand and active continued beef exports to our normal trade partners.	1)	Sharp losses were seen late last week based on underlying concerns of trade direction and rising tensions with China. Feeder cattle futures continue to be most impacted with potential additional losses early in the week.
2)	Feeder cattle placements fell 2% from year-ago levels. This is not only below the market estimate but well below the expected range of estimates. Tightening cattle supplies are expected to be a long-term supportive move to the cattle complex.	2)	Despite light-to-moderate gains in cash cattle trade last week, the inability to follow the aggressive gains in boxed beef values is expected to create additional underlying pressure in the live cattle complex.
3)	Domestic demand remains generally stable with cash hog prices holding a significant premium to the lean hog complex. This indicates the potential for cash markets to limit long-term moves through the lean hog complex.	3)	Limit losses in lean hog trade Friday has opened the door for expanded trading limits in an already weak market structure. This could allow for active pressure in all markets, breaking through additional support levels.
4)	Lean hog futures remain oversold given the sharp pressure over the last week. This could create a sharp market correction following the emotional pressure sweeping through the complex.	4)	The increased tariff levels announced Friday between China and the U.S. will continue to dash any hopes of pork sales to China despite their need for product. This will continue to spark additional long-term concerns in the pork complex until a trade deal is reached, which right now, looks unlikely anytime soon.

#completeherdhealth