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).
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