GENERAL COMMENTS:
Tuesday was a mixed bag for the livestock market as live cattle contracts are extremely indecisive and the feeder cattle market is fully higher, but lean hog contracts were lower after a strong close Monday afternoon. Boxed beef prices were notably stronger and are feeling charged from pre-Labor Day buying. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.11 with a weighted average of $37.53 on 6,450 head. December corn is down 3 cents per bushel and December soybean meal is down $2.10. The Dow Jones Industrial Average is down 66.84 points and NASDAQ is up 81.12 points.
LIVE CATTLE:
The live cattle complex traded all over the board Tuesday and really left the complex feeling uncertain. From a bullish perspective, the market should be encouraged to see gains in the cash market over the last seven weeks and elaborate gains recently in boxed beef prices. Tuesday's boxed beef movement of 173 loads is utterly phenomenal and will hopefully encourage packers to step up and buy more cattle this week. But through a bearish perspective, there are many analysts who wonder how much steam the nearby live cattle contracts have left, not to mention they immensely worry about beef demand and packer efficiency after Labor Day (which is only two weeks away). August live cattle closed $0.17 lower at $106.72, October live cattle closed steady at $109.87 and December live cattle closed $0.37 higher at $112.95. Tuesday's cash cattle trade happened lightly throughout the South as cattle traded in Texas for $106, which some feedlots took and some passed on, and in Kansas cattle traded for $106 to $107. Tuesday's slaughter is estimated at 120,000 head, 3,000 head more than a week ago and year ago. Monday's slaughter was revised to 112,000 head.
Boxed beef prices closed higher: choice up $3.60 ($220.86) and select up $2.71 ($204.65) with a movement of 173 loads (101.93 loads of choice, 19.47 loads of select, 20.03 loads of trim and 31.66 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. With boxed beef prices favoring stronger trends, it shouldn't be too difficult for feedlots to move the market $1.00 to $2.00 stronger. Trade will most likely wait until after the Fed Cattle Exchange, and could wait until even later than that.
FEEDER CATTLE:
The feeder cattle complex closed above resistance Tuesday afternoon and came as a boost of encouragement to cattlemen as two big video sales take place this week. Whenever there is a big sale, cow-calf producers pray that the board is strong so that buyers can watch the sale with intensity and feel comfortable to buy. August feeders closed $0.50 higher at $143.22, September feeders closed $1.20 higher at $145.60 and October feeders closed $1.17 higher at $146.37. At Superior's Big Horn Classic Video sale in Sheridan, Wyoming, feeder steers in region four (Minnesota, Wisconsin, Illinois, Iowa, Missouri and Kansas) sold as the following: 500 to 540 pound steers sold for $1.39 to $1.81, steers weighing 600 to 645 pounds sold for $1.28 to $1.6250 and steers weighing 700 to 740 pounds sold for $1.37 to $1.59. The CME feeder cattle index 8/17/2020: up $0.43, $142.63.
LEAN HOGS:
The lean hog complex struggled to be beat the looming resistance levels and wasn't supported by a stronger cash market or a higher cutout close. October lean hogs closed $2.10 lower at $51.42, December lean hogs closed $1.77 lower at $53.17 and February lean hogs closed $0.97 lower at $61.12. Unfortunately, as the feeder cattle complex grew Tuesday, the interest in the lean hog sector dwindled, and without any substantial support in the retail sector, the market was left without any strong base to rally upon. Pork cutouts total 376.42 loads with 334.72 loads of pork cuts and 41.70 loads of trim. Pork cutout values: down $0.49, $74.06. Tuesday's slaughter is estimated at 483,000 head, 25,000 head more than a week ago and 1,000 head more than a year ago. The CME lean hog index 8/14/2020: up $0.63, $54.47.
WEDNESDAY'S CASH HOG CALL: Lower. The cash market was been weaker this week, and with packers able to find the hogs they need and with cutout values being elevated, the market is most likely going to keep with its downward trend.
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