GENERAL COMMENTS:
Thursday's
trade was uneventful after feeder cattle contracts scaled lower and
lean hog contracts got the chance to trade higher. This week's cash
cattle trade has kept with its momentum and vigor, the only unsettled
piece is how/if Northern cattle are going to trade this week. Hog prices
closed lower on the National Direct Afternoon Hog Report, down $0.17
with a weighted average of $37.51 on 8,576 head. December corn is up 11
1/2 cents per bushel and December soybean meal is up $8.90. The Dow
Jones Industrial Average is down 80.12 points and NASDAQ is up 30.26
points.
LIVE CATTLE:
Live
cattle contracts felt some resistance in the first quarter contracts of
2021, but thankfully nearby contracts were able to close higher and
rally with the positivity of this week's cash cattle trade. August live
cattle closed $0.70 higher at $107.05, October live cattle closed $0.57
higher at $110.15 and December live cattle closed $0.27 higher at
$112.82. Cash cattle has kept with its dealing of trading cattle in the
South at mostly $104, but packers still haven't been able to get feedlot
managers in the North to budge. Asking prices remain firm at $107 to
$108 live in Nebraska and $170 or better dressed. Packers have placed
some bids on cattle in Iowa for near asking prices, but cattle have yet
to sell.
Thursday's slaughter is estimated at 118,000 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 ending 8/1/2020, beef
slaughter was down slightly from the previous week (down 0.57%) with
636,304 head being processed. Thankfully carcass weights were slightly
lower as live weights averaged 1,365 pounds, down three pounds from the
previous week, and dressed weights averaged 835 pounds, down one pound.
Boxed
beef prices closed higher: choice up $1.86 ($210.95) and select up
$1.42 ($197.41) with a movement of 139 loads (72.86 loads of choice,
26.71 loads of select, 14.56 loads of trim and 24.50 loads of ground
beef).
FRIDAY'S CASH CATTLE CALL: South
steady; North slightly higher. Prices are set for the South this week,
but the North remains a big question mark. Are packers going to up the
ante or are they simply going to walk away and buy more south cattle to
meet this week's needs?
FEEDER CATTLE:
Feeder
cattle contracts closed lower as midmorning pressure built throughout
the complex and traders seemed more interested in rallying the lean hog
complex than pushing the feeder cattle contracts to potentially risky
tops. August feeders closed $0.30 lower at $144.95, September feeders
closed $0.57 lower at $147.37 and October feeders closed $0.62 lower at
$148.47. Thankfully the momentum throughout feeder cattle sales wasn't
affected by the board's lower close and sales continued to sell for
stronger prices. At Winter Livestock in Pratt, Kansas, compared to a
week ago, steers weighing 600 to 850 pounds sold $2.00 to $6.00 higher,
feeder steers weighing 850 to 1,000 pounds sold steady. Feeder heifers
were hard to test as there wasn't a strong comparison to make from the
previous week, but stronger undertones were noted and heavier weighing
heifers weighing 700 to 900 pounds sold steady. The CME feeder cattle
index 8/12/2020: unavailable at this time.
LEAN HOGS:
The
lean hog complex leans into Friday optimistically as the board closed
higher and cutout values closed over $1.00 stronger. August lean hogs
closed $0.80 higher at $53.70, October lean hogs closed $0.75 higher at
$52.35 and December lean hogs closed $0.95 higher at $54.35. As the
certainty in the feeder cattle complex dwindled, traders saw the lean
hog complex as a safer opportunity and capitalized on the proposition.
Pork cutouts totaled 307.34 loads with 261.13 loads of pork cuts and
46.20 loads of trim. Pork cutout values: up $1.32, $73.76. Thursday's
slaughter is estimated at 478,000 head, 2,000 head more than a week ago
and 4,000 head less than a year ago. The CME lean hog index 8/11/2020:
up $0.03, $53.82.
Thursday's actual slaughter
data shared that, for the week ending 8/1/2020, hog slaughter was down
slightly from the previous week (down 1.51%) with 2,536,743 head being
processed. Actual weights were slightly lower from the previous week as
live weights averaged 282 pounds (down one pound) and dressed weights
averaged 210 pounds (down one pound).
FRIDAY'S
CASH HOG CALL: Slightly higher. Heading into the week, packers may be
apt to kill a few more hogs leading up to Labor Day. Meanwhile, pork
cutout values are slightly higher.
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