Monday Midday Livestock Market Summary - Modest Support Rallying Through Livestock Contracts

General Comments

Monday's trade has rallied more support than most thought the day would be able to but remembering that the week falls in front of a three-day holiday could dampen the market's ability to make substantial progress. Trade may be scaling higher but with mid-day boxed beef prices lower, the support in the live cattle sector could be undermined. December corn is steady and December soybean meal is up $3.30. The Dow Jones Industrial Average is down 228.34 points and NASDAQ is up 64.45 points.

LIVE CATTLE

Live cattle contracts are rallying despite concerns that boxed beef prices are trading lower and that cash cattle trade is anticipated to be lower. October live cattle are up $0.80 at $105.70, December live cattle are up $0.90 at $109.40 and February live cattle are up $0.82 at $112.67. With next Monday being a closed day for the markets in respect to Labor Day, all of the livestock contracts could be subject to some minor volatility as traders will likely be checked out the of the market before Friday. Showlists are slightly lower in Nebraska and Colorado, and fully lower in Kansas and Texas.

Last week's negotiated cash cattle sales totaled more than most anticipated as the week's trade was spotty. Total confirmed cash sales for last week totaled 100,762 head with 72,200 head committed for delivery in the first two weeks and the remaining 28,562 head committed for the following 15 to 30 days.

Boxed beef prices are lower: choice down $2.05 ($227.35) and select down $0.05 ($214.81) with a movement of 42 loads (20.80 loads of choice, 3.37 loads of select, 7.60 loads of trim and 10.04 loads of ground beef).

FEEDER CATTLE

Feeder cattle prices are trading modestly higher Monday morning as the market sees a slight opportunity to make forward progression and the slightly lower corn prices help bolster the idea. With feeder cattle prices being in a lull until the fall run commences, sales throughout the countryside for the next three weeks could be spotty and reactionary to the board and corn prices. September feeders are up $0.67 at $140.70, October feeders are up $0.80 at $140.97 and November feeders are up $1.05 at $141.65.

LEAN HOGS

With positive energy lingering throughout the livestock sector, the lean hog complex traders higher. Though the market is scaling higher, the complex has yet to rally the $55 resistance plane in the spot October contract, which will be a true telling of how substantial the market's support is. But with cash prices slightly higher and midday cutout values exuberantly higher (up $5.00) the market could make considerable headway through Monday's trade. October lean hogs are up $0.47 at $54.07, December lean hogs are up $0.37 at $55.57 and February lean hogs are steady at $61.97.

The projected lean hog index for 8/28/2020 is down $0.45 at $56.60, and the actual index for 8/27/2020 is down $0.07 at $57.05. Hog prices are higher on the National Direct Morning Hog Report, up $0.16 with a weighted average $43.07, ranging from $37.00 to $43.50 on 3,973 head and a five-day rolling average of $42.35. Pork cutouts total 167.20 loads with 146.89 loads of pork cuts and 20.32 loads of trim. Pork cutout values: up $5.10, $76.49.

#completecalfcare

Friday Closing Livestock Market Summary - Contracts Pressured

GENERAL COMMENTS:

It was week of lower prices for the livestock complex as traders ran from topping charts and cash cattle sellers were left to simply take what they were offered or not sell. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.24 with a weighted average of $42.89 on 4,800 head. December corn is up 3/4 cent per bushel and December soybean meal is up $6.60. The Dow Jones Industrial Average is up 161.60 points and NASDAQ is up 70.29 points.

From Friday to Friday livestock futures scored the following changes:

Aug LC off $2.57 Oct LC off $3.65; Sep FC off $2.90 Oct FC off $5.10;

Oct LH off $0.60 Dec LH off $0.25.

LIVE CATTLE:

Watching this week's live cattle futures trade was brutal. It's amazing how quickly the ground the market built itself up upon can crater and send the complex sharply lower in a matter of one day. The maddening piece about this whole equation is looking at the remaining time of 2020 and wondering what the market has in store. Cash cattle prices are scarcely lower and with the remaining 2020 contracts dancing from $103 to $108, there's hardly any room for lower trade in order to keep contracts above $100. It's true the industry has done a good job of cleaning up the backlog, but cattle are still packing extra weight which adds additional tonnage to the marketplace that retailers have to move. Though the market has worked its way out of the hole made earlier this spring, there's still a lot of unknowns.

Live cattle contracts traded lower into Friday's close as traders veered away from the market, unwilling to invest when there's downward pressure. October live cattle closed $1.25 lower at $104.90, December live cattle closed $0.85 lower at $108.50 and February live cattle closed $0.85 lower at $111.85. This week's cash cattle trade was fully lower and actually traded lower as the week progressed. Live trade this week ranged from $103 to $105, and dressed trade was for $165 to $166. Friday's slaughter is estimated at 116,000 head -- steady with a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be 66,000 head.

Boxed beef prices closed mixed: choice down $2.14 ($229.40) and select down $0.60 ($214.86) with a movement of 114 loads (72.52 loads of choice, 11.67 loads of select, 19.99 loads of trim and 10.29 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Lower. With packers sitting on a large supply of cattle and with boxed beef prices starting to top, they are going to be adamant about buying cattle cheaper.

FEEDER CATTLE:

Feeder cattle contracts closed the week considerably lower with technical pressure giving the market no other option but to scale lower. September feeders closed $1.20 lower at $140.02, October feeders closed $0.97 lower at $140.17 and November feeders closed $1.00 lower at $140.60. Unfortunately, the market may not see much support in the near future as boxed beef prices begin to top and there's weakness in the live cattle market. Thankfully there are a couple of weeks to buy the market some time before the big feeder cattle run; at that point, hopefully, the market will be in a position again to honor upward momentum. Earlier this week, Northern Livestock Video Auction hosted their Early Fall Preview and compared to their sale earlier this summer prices held phenomenally well considering this week's board was substantially weaker and the cash cattle market turned lower for the first time in roughly two months. For the lighter weight divisions prices were $1.00 softer but overall, the sale highly commendable. Steers weighing 500 to 549 pounds sold on average for $165, steers weighing 600 to 649 pounds sold for $155.20, steers weighing 650 to 699 pounds sold for $150.96 and steers weighing 700 to 749 pounds sold for $149.96. The CME feeder cattle index 8/27/2020: down $1.46, $141.56.

LEAN HOGS:

Out of all the livestock contracts the lean hog complex had the most going for it this week as the market was able to close with some major cash and even close a couple of days fully higher while both of the cattle contracts dodged lower. But as the week traded, support for the lean hog complex dwindled and ultimately sent the spot lean hog contract back below its $55.00 resistance level. October lean hogs closed $2.07 lower at $53.65, December lean hogs closed $1.37 lower at $55.20 and February lean hogs closed $0.87 lower at $61.97. Pork cutouts total 333.33 loads with 297.69 loads of pork cuts and 35.64 loads of trim. Pork cutout values: down $1.39, $71.39. Friday's slaughter is estimated at 481,000 head - 5,000 head more than a week ago and 6,000 head more than a year ago. Saturday's slaughter is projected to be 276,000 head. Thursday's hog slaughter was revised to 472,000 head. The CME lean hog index 8/26/2020: up $0.26, $57.12.

MONDAY'S CASH HOG CALL: Steady to slightly lower. You've got to hand it to the market this week as the lean hog complex was able to close higher more often than lower but as the market heads into next week, packers may not be as aggressive as the hype from Labor-Day buying subsides.

#completeherdhealth

Friday Midday Livestock Market Summary - Feeling Immense Pressure

General Comments

Feeling more like a Monday than a typical Friday, the livestock complex is left trading considerably lower into the afternoon hours. Earlier this week the cattle contracts were feeling all the pressure but as time has evolved the lean hog complex isn't feeling support by any means as the spot October contract falls $2.00 lower. October lean hogs are down $2.10 at $53.625, December corn is down 1 cent per bushel and December soybean meal is up $5.40. The Dow Jones Industrial Average is up 106.54 points and NASDAQ is up 56.73 points.

LIVE CATTLE

Friday's live cattle trade has been nothing short of depressing as the complex continues to fall lower. As nearby contracts range from $102 to $104, cash cattle trade could be worrisome over the next couple of weeks as packers sit on a large inventory and the board builds with bearish chatter. October live cattle are down $1.47 at $104.65, December live cattle are down $1.10 at $108.22 and February live cattle are down $1.00 at $111.70. The cash cattle market hasn't been the breath of fresh air the industry would gladly welcome but instead the markets held out to be quiet through Friday's morning trade. Packers are putting feelers out throughout the feeding regions to see what's still for sale and who's willing to sell, but thus far trade has been extremely quiet.

Boxed beef prices are higher: choice up $0.34 ($231.88) and select up $1.45 ($215.71) with a movement of 55 loads (23.54 loads of choice, 9.59 loads of select, 15.14 loads of trim and 6.54 loads of ground beef).

FEEDER CATTLE

The feeder cattle complex would love to keep trading higher as cattle buyers have progressively moved the market higher week after week, but the lack of support from technical traders leaves the market scaling lower and lessens buyer's confidence. September feeder cattle are down $1.15 at $140.07, October feeder cattle are down $0.85 at $140.30 and November feeder are down $0.95 at $140.65. Unfortunately, the downward pressure just continues to build and with cash cattle trade weakening, the market's near future could be a lot of lower moves.

LEAN HOGS

Friday has been a total let down for the lean hog complex as the market fought diligently to surpass the resistance at $55.00 but as the bearish outlook has rooted its core into the heart of the livestock complex, the lean hog complex has fallen lower. October lean hogs are down $1.95 at $53.77, December lean hogs are down $1.30 at $55.27 and February lean hogs are down $0.67 at $62.17. With trade already winding down for the weekend, there's little hope that the market will rally into the afternoon and close higher.

The projected lean hog index for 8/27/2020 is down $0.07 at $57.05, and the actual index for 8/26/2020 is up $0.26 at $57.12. Hog prices are higher on the National Direct Morning Hog Report, up $0.41 with a weighted average of $43.06, ranging from $38.00 to $43.37 on 4,483 head and a five-day rolling average of $41.71. Pork cutouts total 222.77 loads with 198.89 loads of pork cuts and 23.88 loads of trim. Pork cutout values: down $0.24, $72.54.

#completeherdhealth

Friday Morning Livestock Market Update - Continued Cattle Market Pressure Likely

General Comments:

Cash cattle trade through the week has not only been limited and hard to pin down, but overall disappointing given the firm market support over the last couple of months. Prices have continued to erode through the week, posting prices near $104 per cwt in the South on a live basis Thursday, down from $105 per cwt earlier this week and $106 per cwt last week. Limited sales in the North were reported at $165 to $168 per cwt. This is weaker than both last week and trade earlier this week, although it is expected that additional trade is still needed to develop, especially in the North. There is uncertainty over how much short-term market pressure will develop, and if feeders will hold out at the end of the week, hoping for additional support next week. The concern about waiting is that limited activity is expected next week in both cash cattle trade and futures markets leading into the Labor Day weekend. Most of the holiday needs are expected to have already been sourced, creating potential additional pressure both before and after the holiday weekend. This limited timeframe is also one of the main drivers in live cattle price pressure as traders look for increased softness to develop over the next few weeks, in a typical seasonal end-of-summer pattern. Feeder cattle futures appear to have clearly moved past seasonal summer highs as October futures have fallen $8 per cwt the last two weeks. This potential weakness has been expected and talked about over the past month as feeder cattle futures typically peak in late July or early August. Feeder cattle futures peaking two to three weeks later than usual is no significant surprise, given the delayed market activity through the spring and summer.

Mixed trade is expected to develop in lean hog futures Friday. The ability to regain early week pressure and test short-term resistance levels in nearby lean hog contracts is impressive and can be partially attributed to traders fleeing the cattle market, looking for refuge in the lean hog complex. Traditionally the lean hog futures complex has been anything but a "refuge" for traders, but given the seasonal pressure in cattle markets as well as the underperforming nature of hog trade through the entire summer, the hog complex seems like the safest and most underbought market at this point. Given this renewed pressure, there still needs to be caution given to bullish traders who may expect strong market support, as current hog market fundamentals may limit the upside movement in the complex over the next several months. This could quickly allow for traders to jump in and out of the market in the near future. Cash hog prices are expected $1 lower to $1 higher with most bids expected steady to 50 cents higher. Slaughter Friday is expected at 482,000 head. Saturday runs are expected at 277,000.

	BULL SIDE		BEAR SIDE
1)	Boxed beef values continue to slowly but steadily churn higher through the week. The expectation that firm buyer support may continue could help to sustain additional gains through the end of the week.	1)	Active pressure was seen in live and feeder cattle futures during the week. This continues to point to seasonal pressure surrounding and following Labor Day, which traditionally signals a pullback in price levels. The focus now will move to just how much pressure will develop, and if the complex can regain significant support before the end of the year.
2)	Spring 2021 live cattle contracts continue to hold a strong premium to nearby contracts. The focus on firming price levels during the first quarter of 2021 despite increased cattle placements points to expectations of beef demand recovery in the coming months.	2)	Cash cattle trade has yet to become active, but prices have continued to erode through the week. This is expected to limit price support not only this week, but next week as packers and feeders look ahead to the Labor Day weekend.
3)	Nearby lean hog futures continue to move to new short-term highs as traders slowly but steady move into hog futures as cattle markets shift lower. The ability to sustain further buyer support into September is expected to spark additional technical buyer support across the entire complex.	3)	Despite the firmness in lean hog futures, continued large supplies of market-ready hogs are expected to limit aggressive price gains over the near future. This could keep nearby hog futures capped under $60 per cwt over the near future based on pork supply and uncertain demand growth.
4)	Pork cutout values bounced higher Thursday. This has limited the concern that aggressive price pressure may develop in pork values and could bring additional end-of-the-week gains.	4)	Concerns of further price pressure in pork cutout values is likely to limit overall market optimism during late August and early September.

#completeherdhealth

Thursday Closing Livestock Market Update - Cattle Contracts Lose Ground; Lean Hogs Slightly Higher

GENERAL COMMENTS:

Thursday was another day of sharp losses through the cattle sector, but by a slim margin, the lean hog complex closed modestly higher. Hog prices closed sharply lower on the National Direct Afternoon Hog Report, down $1.40 with a weighted average of $42.69 on 3,923 head. December corn is up 4 1/4 cents per bushel and December soybean meal is up $3.80. The Dow Jones Industrial Average is up 160.35 points, and the NASDAQ is down 39.72 points.

LIVE CATTLE:

The raw truth about the current live cattle complex is that, if you look over the charts, you'll notice that for the last two months, the market has slowly continued to climb out of the hole established earlier this spring. Adding modest gains here and there, the market has successfully rallied back to levels not seen since late February/early March. But in a week's time, the market has slumped lower and in a fierce way. It's understandable that with Labor Day about to be here and gone, the market is pulling back and developing short-term highs. But as we reflect upon 2020 and how it differs from years past, the market sits in turmoil wondering what the remainder of 2020 will bring.

October live cattle closed $0.85 lower at $106.15, December live cattle closed $1.17 lower at $109.35 and February live cattle closed $0.45 lower at $112.70. Thursday's cash cattle trade was disappointing, as the few that traded sold for lower money than the week's average. A small sampling sold in Iowa for $104, and an even lighter trade transpired in Nebraska for $103. There should be some more cattle that trade Friday before the week closes. Thursday's slaughter is estimated at 119,000 head -- steady with a week ago and 1,000 head more than a year ago.

Thursday's actual slaughter data shared that, for the week ended Aug. 15 was actually 1.69% higher than the previous report, totaling 643,681 head, but carcass weights were also higher. Actual live weights averaged 1,367 pounds (up 6 pounds), and actual dressed weights averaged 836 pounds (up 3 pounds).

Boxed beef prices close higher: choice up $0.09 ($231.54) and select up $0.15 ($214.26) with a movement of 110 loads (46.08 loads of choice, 11.89 loads of select, 38.77 loads of tri and 13.49 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady at best. Packers have an inventory that allows them to buy themselves some time. If packers were short bought, it would be safe to assume that they would up their bids come Friday to secure the cattle they need, but over the last two months, packers have been extremely aggressive in their cash cattle purchases, which sits them in a position of leverage.

FEEDER CATTLE:

Feeder cattle contracts closed lower again Thursday afternoon as the market lacks ambition and knows all too well that the downward pressure isn't going to lift sooner rather than later. Adding to the downward pressure are corn prices that keep inching higher and higher, pasture conditions that continue to deteriorate and the weaker cash cattle trade this week that added pressure of its own. September feeder cattle contracts closed $0.55 lower at $141.22, October feeder cattle contracts closed $0.77 higher at $141.15 and November feeder cattle contracts closed $0.82 lower at $141.60. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to a week ago, lower undertones were noted on feeder steers. Feeder heifers weighing 700 to 750 pounds sold mostly $4.00 lower, while the rest of the heifers sold with an unevenly tested steady undertone. Demand was good, but buyers are a little more cautious as the board continues to trend lower. The CME feeder cattle index 8/26/2020: down $0.58, $143.02.

LEAN HOGS:

A slightly stronger close above the $55.00 threshold is a better way to round out the day than what was anticipated earlier. The lean hog complex danced back and forth, not knowing if there was truly enough support to move the market higher or if the complex should just bow lower and trade beneath the $55.00 resistance. As the afternoon progressed and traders felt more confident in the market, the entire lean hog complex was able to close slightly higher. October lean hogs closed $0.17 higher at $55.72, December lean hogs closed $0.25 higher at $56.57 and February lean hogs closed $0.12 higher at $62.85. Pork cutouts totaled 369.62 loads with 328.88 loads of pork cuts and 40.74 loads of trim. Pork cutout values: up $0.88, $72.78. Thursday's slaughter is estimated at 482,000 head -- 6,000 head more than a week ago and 6,000 head less than a year ago. The CME lean hog index 8/25/2020: up $0.26, $56.86.

Thursday's actual slaughter data for the week ended Aug. 15 showed that hog slaughter was up 0.43% from the previous week, totaling 2,561,281 head. Hog weights held steady as live weights averaged 283 pounds and dressed weights averaged 211 pounds.

FRIDAY'S CASH HOG CALL:

Lower. Packers were aggressive early this week, but as the week nears the finish line, packers most likely bought enough to carry them through their weekend needs.

#completeherdhealth

Thursday Midday Livestock Market Summary - Trade is Lower for Cattle, and Mixed for Hogs

General Comments

Heading into Thursday afternoon, the livestock complex is lackadaisical as cattle contracts steamroll lower and the lean hog complex trades mildly higher. Cash cattle trade is painfully quiet as packers are resistant to pay asking prices and bids have actually developed lower in the Southern Plains. December corn is up 4 cents per bushel and December soybean meal is up $4.50. The Dow Jones Industrial Average is up 186.60 points and NASDAQ is up 3.41 points.

LIVE CATTLE

The live cattle complex is battling a case of bearishness as the futures market keeps trading lower and the cash cattle market is very, very quiet. October live cattle are down $0.80 at $106.20, December live cattle are down $0.97 at $109.55 and February live cattle are down $0.27 at $112.87. It's understandable that with Labor-Day buying mostly wrapped up for major distributors, that traders are worried about the boxed beef market nearing its top, and consequently the board is showing the uncertainty. There's been a healthy trade thus far in the week, but more cash cattle are expected to trade before the week's over. Bids are on the table in Iowa at $105, in Nebraska there's some light inquiry and in Kansas there's bids on the table for $104.

Thursday's export report shared that beef net sales of 11,800 MT reported for 2020 were down 40% from the previous week and 36% from the prior 4-week average. The three primary increases were from China (3,300 mt), Hong Kong (3,200 mt, including decreases of 300 mt), South Korea (1,500 mt, including decreases of 2,200 mt).

Boxed beef prices are higher: choice up $0.04 ($231.49) and select up $1.26 ($215.37) with a movement of 86 loads (35.78 loads of choice, 5.76 loads of select, 36.59 loads of trim and 8.01 loads of ground beef).

FEEDER CATTLE

Though feeder cattle contracts are still trading lower, their losses are minimal compared to how the complex was trading earlier Thursday morning. As traders continue to back away from the cattle contracts believing that a modest correction is due, the contracts are left high-and-dry with no option but to scale lower. September feeders are down $0.27 at $141.50, October feeders are down $0.57 at $141.35 and November feeders are down $0.55 at $141.87.

LEAN HOGS

The lean hog complex would willingly trade higher but firm consensus on where the market should trade is undecided. A strong export report could help the market trade higher into the afternoon especially if the cash and cutout value can close higher as well. October lean hogs are down $0.05 at $55.50, December lean hogs are up $0.07 at $56.40 and February lean hogs are steady at $62.72.

The projected lean hog index for 8/26/2020 is up $0.26 at $57.12, and the actual index for 8/25/2020 is up $0.26 at $56.86. Hog prices are lower on the National Direct Morning Hog Report, down $1.29 with a weighted average of $42.80, ranging from $37.00 to $43.37 on 3,171 head and a five-day rolling average of $40.75. Pork cutouts total 212.97 loads with 182.22 loads of pork cuts and 30.75 loads of trim. Pork cutout values: up $1.40, $73.30.

Pork net sales of 39,400 mt reported for 2020 were up 91% from the previous week and 56% from the prior four-week average. The three primary increases were from China (11,200 mt, including decreases of 400 mt), Mexico (10,700 mt, including decreases of 1,100 mt), Canada (6,600 mt, including decreases of 400 mt).

#completecalfcare

Thursday Morning Livestock Market Update - Cash Cattle Weakness Sparks Selling Pressure

General Comments:

Light-to-moderate cash cattle trade developed Wednesday with additional trade in the South at $103 to $105 per cwt live basis. Most trade was seen at $105 per cwt, which is still generally $1 per cwt lower than last week's average. Northern trade, which was generally quiet up until midday Wednesday, started to develop at $166 to $167 per cwt dressed basis. Most trade developed near $167 per cwt, but still $2 per cwt below last week's levels. The underlying pressure in cash cattle trade combined with active triple-digit losses in futures Wednesday is likely to limit additional packer interest at these prices with lower bids expected Thursday morning unless there is a major shift in direction of the futures market. Early August lows of $106.97 per cwt in October contracts held late Wednesday, limiting markets from moving below initial support levels, but the combination of weaker cash cattle trade and concerns that beef values may quickly turn lower over the near future is creating an open door for the sellers to step into the market as market bears continue to look for further liquidation over the next couple of weeks. Feeder cattle futures continue to shift, posting additional triple-digit losses in all nearby contracts expect the soon-to-expire August futures. September feeder cattle contracts settled at $141.77 per cwt, representing a $6 per cwt price tumble over the last two weeks. This swift market move is likely to represent the move away from market highs, as traders look for near-term support going into the fall months. Initial support levels in September contracts still remain at $139.62 per cwt, over $2 per cwt below current price levels. The potential to move further below these levels is likely in the upcoming weeks and months as seasonal pressure is likely to further develop across the feeder cattle complex.

Despite the ability to sustain additional cash market support midweek and break away from the bearish trend in cattle futures, lean hog futures are expected to see additional market pressure Thursday morning, especially in nearby contracts. Sharp triple-digit losses in pork cutout values is likely to be the spark that will lead to additional selling in nearby contracts. It is uncertain just how much short-term impact this will have on 2021 contracts, but the main focus of the market will be on seasonal pressure as demand is expected to slow significantly leading into and following the Labor Day weekend. This could bring further pressure to lean hog futures trade in late August as traders prepare for the inability to move pork supplies at current levels. Cash hog prices are expected $1 lower to $1 higher with most bids expected steady to 50 cents higher. Slaughter Thursday is expected at 485,000 head. Saturday runs are expected at 277,000.

	BULL SIDE		BEAR SIDE
1)	Continued price support in boxed beef values have been able to defy a late August price tumble so far. The focus on continued buying in front of the Labor Day weekend has helped to spark additional gains.	1)	Cash cattle trade has started to shift lower, although at this point losses have been limited to $1 to $2 per cwt. This move lower could indicate that a seasonal high has been hit last week, as prices traditionally soften through the month of September and early October before regaining market momentum at the end of the year.
2)	Spring 2021 live cattle contracts continue to hold a strong premium to nearby contracts. The focus on firming price levels during the first quarter of 2021 despite increased cattle placements points to expectations of beef demand recovery in the coming months.	2)	Sharp losses in live cattle and feeder cattle futures could indicate further price pressure may develop as traders expect beef values to pull back from the strong rally higher as Labor Day buying wraps up.
3)	Cash hog values continue to hold moderate-to-strong gains as packers continue to actively move into the market in order to keep plants full. This helps them take advantage of strong packer margins given the recent support in pork values.	3)	Sharp losses in pork cutout values Wednesday may be the signal that traders have been looking for to indicate a significant change in market direction. The lack of support in pork prices could spark widespread concerns of price sustainability in nearby contracts.
4)	Deferred lean hog futures continue to hold well despite the pressure in nearby contracts. June futures are holding a $21 per cwt premium over spot month futures, indicating further market strength ahead.	4)	Hog supplies continue to remain strong, even with active slaughter levels of 485,000 on a daily basis, the potential to quickly reduce the amount of market-ready hogs seems limited and could continue to limit price gains over the next few months.

#completeherdhealth

Wednesday Closing Livestock Market Summary - Cattle Contracts Close Down More Than $1

GENERAL COMMENTS:

Wednesday was another tough close for the cattle contracts, but the lean hog contracts were able to close mixed with deferred contracts rallying modestly. Push back from the cash market has only added to traders' fears that the cattle contracts are reaching a short-term top. Hog prices closed sharply higher on the National Direct Afternoon Hog Report, up $1.38 with a weighted average of $43.66 on 8,197 head. October lean hogs are down $0.40 at $55.55, December corn is down 1/4 cent per bushel and December soybean meal is down $0.70. The Dow Jones Industrial Average is up 66.65 points and the NASDAQ is up 189.50 points.

LIVE CATTLE:

All live cattle contracts closed lower Wednesday -- just like the feeder cattle complex -- with all contract months down more than $1. October live cattle closed $1.77 lower at $107.00, December live cattle closed $1.17 lower at $110.52 and February live cattle closed $1.07 lower at $113.15. Traders look at the market and see toppy charts that could be costly, and packers look through their inventory knowing that the nearby market is at their mercy, considering that they are sitting on a lofty supply. The bulk of Wednesday's trade came midmorning following the Fed Cattle Exchange's business. As the afternoon progressed, packers were less interested and the feedlots that have yet to sell want higher prices and are hoping that, by waiting until later in the week, packers may give a little more. Bids of $105 live and $165 to $167 dressed are still on the table in Iowa and Nebraska. Wednesday's slaughter is estimated at 118,000 head -- 1,000 fewer head than a week ago and 1,000 head more than a year ago.

Boxed beef prices closed higher: choice up $1.77 ($231.45) and select up $1.85 ($214.11) with a movement of 121 loads (56.64 loads of choice, 15.76 loads of select, 18.89 loads of trim and 29.44 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady. It's going to be hard to move packers into paying higher prices as they've got plenty of inventory and they've been paying higher prices for the last two months.

FEEDER CATTLE:

Feeder cattle contracts struggled through Wednesday's afternoon trade as the complex closed $1.15 to $1.62 lower. September feeders closed $1.30 lower at $141.77, October feeders closed $1.15 lower at $141.92 and November feeders closed $1.27 lower at $142.42. And as the complex moves further and further away from the recent highs, traders continue to let the market fall lower, as many saw a nearby top growing. As feeder cattle contracts continue to slip lower, the market is teetering only slightly above the 40-day moving average of $141.13, and the 100-day moving average sits at $132.33. At Winter Livestock in Dodge City, Kansas, compared to a week ago, feeder steers weighing 700 to 950 pounds sold $2.00 to $5.00 lower. Heifers were harder to test but a stronger undertone was noted. Slaughter cows and bulls sold $1.00 to $3.00 lower. The CME feeder cattle index 8/25/2020: down $0.02, $143.60.

LEAN HOGS:

Wednesday wasn't all good but neither was it all bad for the lean hog complex, as nearby contracts closed lower, but deferred contracts and cash prices both closed higher. The spot October contract was able to keep above the $55.00 threshold but only by a mere $0.55. If Thursday is another day of weaker trade, the spot contract is going to be pressured to fall below the recently incurred resistance. October lean hogs closed $0.40 lower at $55.55, December lean hogs closed $0.35 lower at $56.32 and February lean hogs closed $0.05 lower at $62.72. Pork cutout totaled 358.01 loads with 340.47 loads of pork cuts and 17.54 loads of trim. Pork cutout values: down $2.91, $71.90. Wednesday's slaughter is estimated at 482,000 head -- 6,000 head more than a week ago and 7,000 head less than a year ago. The CME lean hog index 8/24/2020: up $0.54, $56.60.

THURSDAY'S CASH HOG CALL: Steady. After two days of substantial gains in the cash hog market, a third day of higher gains would obviously be well received, but as packers have bought a considerable number of hogs over the past few days, their bids may come in steady.

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Monday Closing Livestock Market Summary - Cattle Contracts Bleed Lower; Hogs Capitalize on Day

GENERAL COMMENTS:

Friday afternoon didn't leave Monday's cattle complex much of a shot at trading higher and the markets knew their fate. Thankfully the lean hog complex was able to rally and push both the board and cash markets stronger. Hog prices are higher on the National Direct Afternoon Hog Report, up $1.18 with a weighted average of $41.38 on 10,148 head. December corn is up 4 1/2 cents per bushel and December soybean meal is down $0.50. The Dow Jones Industrial Average is up 378.13 points and NASDAQ is up 67.92 points.

LIVE CATTLE:

The live cattle complex waltzed into Monday's trade knowing that the day was going to be less than ideal and simply hoped for the damage to be minimal. October live cattle closed $0.62 lower at $107.92, December live cattle closed $0.95 lower at $110.82 and February live cattle closed $1.15 lower at $113.47. Early 2021 contracts were hit hardest, trading $1.10 to $1.15 lower. Monday's cash cattle trade was extremely quiet with bids and asking prices not fully established, but toward later afternoon a handful of cattle traded in Texas for $105. Monday's slaughter is estimated at 117,000 head -- 5,000 head more than a week ago and steady with a year ago.

Boxed beef prices are higher: choice up $1.53 ($227.47) and select up $2.26 ($211.25) with a movement of 112 loads (56.03 loads of choice, 11.92 loads of select, 23.67 loads of trim and 20.18 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady. Asking prices have yet to be determined but with packers having the inventory they do, the ball is in their court. Northern feedlots will fight for at least steady prices but if the Southern Plains weakens early in the week the likelihood of steady will be tougher.

FEEDER CATTLE:

Feeder cattle prices had no hope of trading higher as the market's downward pressure brewed over the weekend and was solidified when traders bowed at Monday's morning bell. Low and behold, corn prices even decided to trade slightly higher, pushing the cattle complex even lower. September feeders closed $2.00 lower at $142.85, October feeders closed $2.45 lower at $142.82 and November feeders closed $1.82 lower at $143.67. At Joplin Regional Stockyards steer and heifer calves sold $2.00 to $5.00 lower compared to last week, while yearlings sold steady to $2.00 lower. The sale's weaker prices came from a 2-fold reaction -- still flustered emotion from the latest Cattle on Feed report, along with downward pressure on the market from Monday's weaker board. The CME feeder cattle index 8/21/2020: unavailable at this time.

LEAN HOGS:

Thankfully the lean hog complex rallied to give the livestock sector some positivity heading into Tuesday. With a strong cash hog trade (up $1.18 on 10,148 head) and a strong cutout close, the market successfully closed higher across the entire lean hog platform (board, cash and retail). After last week's rally above the $55.00 resistance level, the market's support dwindled and sent prices back below those levels in the spot contract. Traders will be leery of the cattle contracts for a while as toppy charts solidify, which could give the lean hog complex a shot at tackling those resistance levels again this week.

Pork cutouts totaled 255.45 loads with 228.64 loads of pork cuts and 26.82 loads of trim. Pork cutout values: up $1.06, $74.57. Monday's slaughter is estimated at 480,000 head -- steady with a week ago and 4,000 head more than a year ago. The CME lean hog index 8/20/2020: up $0.10, $55.51.

TUESDAY'S CASH HOG CALL: Steady to slightly lower. Monday's cash hog market was robust and aggressive. The market has commendable support, but could close steady after such a lofty Monday.

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Monday Midday Livestock Market Summary - Cattle Contracts Head Steadily Lower While Hogs Progress

General Comments

Monday has been brutally rough for the cattle contracts but upon seeing traders flutter from the cattle complex, the lean hog sector has been able to rally steadily into Monday's noon hour. With Friday's Cattle on Feed report sharing a steeply higher placement number, the short-term top in cattle charts has solidified. December corn is up 3 cents per bushel and December soybean meal is down $0.20. The Dow Jones Industrial Average is up 260.36 points and NASDAQ is up 71.34 points.

LIVE CATTLE

Live cattle contracts are in the same mindset that feeder cattle contracts are, and with traders unwilling to risk taking the market higher, a downward trade is expected for all of Monday. October live cattle are down $0.77 at $107.77, December live cattle are down $1.10 at $110.67 and February live cattle are down $1.22 at $113.40. Feedlot managers are unshaken by Friday's COF report as asking prices are anticipated to be higher again this week. As packers continue to commit to large strings of fat cattle, feeders look at the market and see an opportunity that's available here and now and no reason to cower into pricing cattle lower thus far. New showlists appear to be about steady in Nebraska/Colorado, somewhat lower in Kansas, and lower in Texas.

Last week's negotiated trade totaled a staggering 130,278 head. Of that 110,723 head are committed for delivery in the next two weeks while the remaining 19,555 head will be delivered in the following 15 to 30 days.

Boxed beef prices are higher: choice up $1.37 ($227.31) and select up $2.65 ($211.64) with a movement of 46 loads (26.19 loads of choice, 4.60 loads of select, 11.37 loads of trim and 3.50 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are taking the brunt of Monday's doggish trade as contracts fall $0.97 to $2.67 lower. September feeders are down $2.10 at $142.75, October feeders are down $2.60 at $142.70 and November feeders are down $2.07 at $143.40. In trader's minds there's one only one way for the complex to head following Friday's bearish Cattle on Feed report, and that's sharply lower. And although the countryside has unwaveringly supported higher prices the board is reluctant to trade anywhere but lower.

LEAN HOGS

The cattle contracts maybe suffering but the majority of hog contracts are higher. October lean hogs are up $0.25 at $54.50, December lean hogs are down $0.10 at $55.35 and February lean hogs are down $0.12 at $61.75. Deferred contracts are taking the day and rallying even higher than nearby contracts, but with the nearby contracts still $10 to $20 discounted from the July 2021 and August 2021 contracts -- it would be encouraging to see those nearby contracts absorb more support.

The projected lean hog index for 8/21/2020 is up $0.55 at $$56.06, and the actual index for 8/20/2020 is up $0.10 at $55.51. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.79 with a weighted average of $39.41, ranging from $37.00 to $41.00 on 3,265 head and a five-day rolling average of $38.20. Pork cutouts total 137.36 loads with 117.49 loads of pork cuts and 19.87 loads of trim. Pork cutout values: up $2.86, $76.37.

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Monday Morning Livestock Market Update - Increased Cattle Placements Set Tone for Further Cattle Weakness

General Comments:

Firmer cash cattle trade last week helped to focus on market support heading into the last week of August. Trade last week was generally $1 to $2 per cwt higher than the previous week, although the fact that trading ranges were wider than in the previous few weeks is starting to show uncertainty in the market. This could lead to a short-term market high as Labor Day is quickly approaching and many times will create a pullback in price levels through early fall months. The cash market is expected to remain sluggish Monday. Although showlist distribution and inventory taking will be done, it is possible that bids and asking prices may not develop until later in the week. Futures trade is expected to shift lower. Although triple-digit pressure developed Friday in anticipation of bearish cattle on feed numbers, the actual report was much more bearish than expected. This could create significant widespread pressure in both live cattle and feeder cattle trade Monday. If nearby live cattle futures break away from the recent support in October contracts, the potential for additional losses during late August is significant with initial support levels near $106.50 per cwt, while a move to $103 per cwt is possible. It is expected that most of the upcoming holiday buying needs have been placed, creating additional concern that the upward run in boxed beef values the last two weeks may be starting to fade. If beef values do start eroding ahead of and through the Labor Day Holiday weekend, additional underlying pressure may continue to develop in live cattle futures as well as cash cattle trade.

Lean hog futures are expected mixed following the moderate-to-firm pressure late last week. The expected weakness developing in the cattle complex may create some spillover support in lean hog trade as traders look for a place to land if moderate-to-active liquidation develops in cattle futures. The general trend in hog futures has been higher over the last two months, although it has been a bouncy ride higher. Lean hog futures have been anything but consistent with active buying quickly followed by a moderate price retraction. Through all of this, there has been little change in market fundamentals. The strong triple-digit loss in pork cutout values Friday is concerning and could lead to additional uncertainty about the ability to move current supplies through the system over the next several days and weeks. Cash hog prices are expected $1 lower to $1 higher with most bids expected steady to 50 cents lower. Slaughter Monday is expected at 483,000 head.

	BULL SIDE		BEAR SIDE
1)	Traders will be focusing on the morning release of cash cattle summaries. It is expected to point to firmly higher cash values last week, with weekly averages likely to be near $1.50 per cwt higher than the previous week. This would represent a $11 per rally in cash cattle trade over the last two months.	1)	Cattle placements in July landed at 111% year-ago levels. This is well above the trade estimate and the range of estimates. This will further curb market expectations through early 2021 as these cattle are expected to reach market weight during the first quarter of 2021.
2)	Cattle slaughter continues to edge higher with an estimated kill last week at 652,000 head. This would be the highest slaughter rate in nearly two months and represent increased packer activity heading into the fall.	2)	Sharp triple-digit losses on Friday may not be enough to focus on the increased cattle placement and total cattle on feed numbers in Friday's report. This could spark underlying pressure in nearby and deferred contracts Monday.
3)	Traders will focus on Monday's Cold Storage report, looking for increased movement of pork product during the month of July, while potentially limiting the amount of frozen inventories leading up to the Labor Day holiday.	3)	Sharp triple-digit losses in pork cutout values may suggest that most upcoming holiday buying may be wrapping up. A shift in active buying may spark renewed pressure through nearby lean hog trade in the coming days.
4)	Despite the Friday pullback in futures trade, lean hog futures remain near two-month price highs. The strong shift higher in futures prices over the last week has reestablished potential resistance levels at or above $55 per cwt in nearby contracts.	4)	Bearish outside market moves Monday morning could spark renewed pressure in lean hog trade during the first half of the week. Most of the recent price support in lean hog futures has been focused on technical support, which is easily and quickly influenced by other market shifts.

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