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.

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