GENERAL COMMENTS:
Livestock
contracts tried trading higher in the early part of the week. but as
time grew shorter for the week's trade, pressure continued to build and
contracts closed lower. Hog prices closed higher on the National Direct
Afternoon Hog Report, up $0.96 with a weighted average of $40.20 on
5,791 head. December corn is up 1 1/4 cents per bushel and December
soybean meal is down $3.10. The Dow Jones Industrial Average is up
190.60 points and NASDAQ is up 46.85 points.
From
Friday to Friday livestock futures scored the following changes: August
live cattle down $1.80, October live cattle down $1.68; August feeder
cattle down $1.00, September feeder cattle down $1.72; October lean hogs
up $1.23, December lean hogs up $0.83.
LIVE CATTLE:
The
live cattle complex had a busy day as the CME contract could be
changing its daily limits and Friday afternoon shared another Cattle on
Feed report. The board was lackadaisical as downward pressure only
continued to grow throughout the day. August live cattle closed $1.22
lower at $105.80, October live cattle closed $1.22 lower at $108.55 and
December live cattle closed $1.07 lower at $111.77. Thankfully, with
Labor Day right around the corner, boxed beef prices were able to rally
$11.70 in choice cuts from last Friday and select cuts rallied $9.70.
Friday's cash cattle trade was simple clean up trade in the South, but
the North was able to sell a moderate run of cattle for $1.00 higher
than Thursday's trade. Nebraska sold dressed cattle for $169 to $172 and
Iowa was able to sell fats for $168 to $172 to round out the week.
Friday's slaughter is estimated at 116,000 head, 4,000 head more than a
week ago and 1,000 head less than a year ago. Saturday's slaughter is
projected to be around 66,000 head.
Pending
the CFTC's approval, the CME cattle contracts are going to endure new
daily limits. For the live cattle contracts the daily limit of $3.00
would change to $4.00 and the extended limit would go from $4.50 to
$6.00 per day. For feeder cattle the daily limit of $4.50 would change
to a $5.00 limit, and the expanded price limit would change from $6.75
to $7.50 per day. This will give contracts the potential to move more
freely and hopefully capture the fullest upward momentum, but
consequently it also allows for more downside potential.
Boxed
beef prices closed higher: choice up $0.56 ($225.94) and select up
$2.68 ($208.99) with a movement of 75 loads (38.39 loads of choice, 6.43
loads of select, 16.91 loads of trim and 12.91 loads of ground beef).
MONDAY'S
CASH CATTLE CALL: $1.00 to $2.00 higher. Feeders know that packers are
going to get harder to deal with in the short term, as after Labor Day
boxed beef prices usually get weaker. Asking prices will most likely be
$1.00 to $2.00 higher next week.
FEEDER CATTLE:
The
feeder cattle complex battled amongst itself this week as the country
rallied strong prices through the nation's video sales, but traders are
unwilling to take the market any higher. August feeder cattle closed
$0.50 lower at $142.92, September feeder cattle closed $0.97 lower at
$144.85 and October feeders closed $1.10 lower at $145.27. At Herreid
Livestock Market in Herreid, South Dakota, compared to last week, the
best test was on 900 to 1,000 pound steers, which sold $1.00 to $3.00
higher. The entire sale carried excellent demand and most of the sale's
offering was of cattle coming off grass. Heifers were harder to test as
the market didn't have comparable weight classes. The week's video
specials did phenomenally well despite the board being lower for part of
the week. Look for Superior's averages early next week and plan to
watch Northern's Early Fall Special next week as they set out to sell
87,000 head. The CME feeder cattle index 8/20/2020: up $1.10, $143.90.
LEAN HOGS:
The
lean hog complex's momentum dwindled Friday. As the week's end drew
near, traders jumped ship and headed to the weekend not caring if cash
prices were higher or not. October lean hogs closed $0.92 higher at
$54.25, December lean hogs closed $0.40 higher at $55.45 and February
lean hogs closed $0.27 higher at $61.87. Pork cutouts total 323.08 loads
with 292.37 loads of pork cuts and 30.71 loads of trim. Pork cutout
values: down $2.57, $73.51. Friday's slaughter is estimated at 476,000
head, 10,000 head more than a week ago and 1,000 head less than a year
ago. Saturday's slaughter is projected to be around 227,000 head. The
CME lean hog index 8/19/2020: up $0.33, $55.41.
MONDAY'S
CASH HOG CALL: Lower. It was encouraging to see Friday afternoon's cash
hog trade stronger, but with cutout values weaker it's unlikely that
packers will be overly aggressive Monday.
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