GENERAL COMMENTS:
Thursday was a day for the lean hog complex to roll higher in every facet while cattle contracts slid to the background. The lean hog complex not only managed to close $2.00 higher in the nearby contracts, but also supported a stronger cash market and higher cutout close. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.28 with a weighted average of $39.19 on 5,65 head. December corn is down 1/2 cent per bushel and December soybean meal is down $1.90. The Dow Jones Industrial Average is up 46.85 points and NASDAQ is up 118.49 points.
LIVE CATTLE:
Closing lower Thursday afternoon, the live cattle complex sunk lower on the board but still walked away with higher boxed beef prices and some higher dressed trade in the Northern Plains. August live cattle closed $0.45 lower at $107.02, October live cattle closed $1.05 lower at $109.77 and December live cattle closed $0.95 lower at $112.85. The market has run higher for nearly two months and, as Labor Day approaches, the market's momentum is starting to subside. Cash cattle trade was mostly uneventful as only a light trade developed in the Iowa and Nebraska for $167 to $174, though mostly at $169, which is $1.00 higher than last week's averages. Thursday's slaughter is estimated at 119,000 head, 1,000 head more than a week ago and 3,000 head more than a year ago.
Thursday's actual slaughter data shared mixed news, as slaughter was once again lower but so were carcass weights. For the week ending 8/8/2020, beef slaughter totaled 632,968 head, which was down 0.52% from the previous week. Actual live carcasses averaged 1,361 pounds, which was down four pounds from the previous week. Actual dressed carcasses averaged 833 pounds which was down two pounds from the last report.
Boxed beef pries closed higher: choice up $2.34 ($225.38) and select up $0.66 ($206.31) with a movement of 150 loads (88.46 loads of choice, 20.09 loads of select, 11.10 loads of trim and 30.16 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Friday's cash cattle trade will most likely be uneventful as the North has set their market and the South did earlier this week. There could be some more cattle that trade in the North, but price ranges have been set for the week nonetheless.
FEEDER CATTLE:
Feeder cattle contracts closed mostly lower Thursday afternoon with the bulk of nearby contracts trading $0.10 to $0.45 lower, but a few of the 2021 contracts were able to close slightly higher. Even though the countryside is still able to push sales higher in both sale barn sales and specialty video sales, the support from traders to move the market higher is lacking. August feeders closed $0.12 lower at $143.42, September feeders closed $0.17 lower at $145.82 and October feeders closed $0.42 lower at $146.37. The unofficial averages for Western Video Market's sale in Cheyenne, Wyoming, earlier this week presented a showing of another strong feeder cattle sale. Steers weighing 500 to 549 pounds averaged $165.30, steers weighing 550 to 599 pounds averaged $165.22 and steers weighing 600 to 649 pounds average $158.05. Heifers weighing 500 to 549 pounds averaged $148.24, heifers weighing 550 to 599 pounds averaged $144.85 and heifers weighing 600 to 649 pounds averaged $144.27. The CME feeder cattle index 8/19/2020: up $0.18, $142.80.
LEAN HOGS:
The lean hog complex was the furthest thing as possible from being lackadaisical. As traders worried about moving the cattle complex higher, there was an opportunity to jump into the lean hog contracts, and the market was willing to blow past all nearby resistance. October lean hogs closed $2.62 higher at $55.17, December lean hogs closed $2.27 higher at $55.85 and February lean hogs closed $1.00 higher at $62.15. Aided by stronger cutout prices and a higher cash trade, the market has left the lean hog complex in a fine position to take on Friday and maybe trade even higher. Pork cutouts totaled 282.03 loads with 243.61 loads of pork cuts and 38.42 loads of trim. Pork cutout values: up $1.09, $76.08. Thursday's slaughter is estimated at 481,000 head, 3,000 head more than a week ago and 2,000 head less than a year ago. Wednesday's hog slaughter was revised to 476,000 head. The CME lean hog index 8/18/2020: up $0.27, $55.08.
Thursday's actual slaughter was shared a stronger kill, but higher weights for the hog sector. For the week ending 8/8/2020, hog slaughter totaled 2,550,212 head, which was up 0.53% from the previous week. Actual live weights were up one pound, averaging 283 pounds, and actual dressed weights were up one pound at 211 pounds.
FRIDAY'S CASH HOG CALL: Steady to slightly higher. Packers may be willing to pay a little more for hogs on Friday as they head into the weekend and hope to get a lofty sized kill.
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