GENERAL COMMENTS:
Wednesday's Fed Cattle Exchange ignited a strong cash cattle market that eventually carried into the major feeding states. Cash cattle trade was anticipated to be stronger again this week, but $4.00 higher came as a bit of a surprise. Thankfully the cattle contracts have been able to move the board with the cash market's rally. The lean hog complex close mixed with some contracts in the first quarter of 2021 pushing higher. Hog prices were higher on the National Direct Afternoon Hog Report, up $0.26 with a weighted average of $37.69 on 4,736 head. December corn is up 3 3/4 cents per bushel and December soybean meal is up $0.30. The Dow Jones Industrial Average is up 289.93 points and NASDAQ is up 229.42 points.
LIVE CATTLE:
Live cattle contracts saw no point in cautioning their movement as cash prices jumped $4.00 higher. August live cattle closed $1.70 higher at $106.35, October live cattle closed $1.27 higher at $109.57 and December live cattle closed $0.87 higher at $112.55. The market's recent upward trend has been vast and couldn't have been accomplished without the gradual uptick in cash cattle prices. For going on six weeks in a row, cash cattle prices have crept higher and on a healthy volume of cattle sold each and every week. Wednesday's cash cattle trade was sparked by the Fed Cattle Exchange, which ultimately led to the strong sales throughout the countryside. Southern cattle sold mostly for $104 ($4.00 higher) and only a limited sampling of northern cattle have traded for $104 to $107 -- but mostly at $105. Wednesday's boxed beef movement was extremely encouraging as a movement of 182 loads is steep for this time of year. The market could really use a strong run of boxed beef demand, which would help move product, encourage packers' slaughter pace and continue to chip away the heavy fats. Wednesday's slaughter is estimated at 117,000 head -- steady with a week ago and 2,000 head more than a year ago.
Boxed beef prices closed higher: choice up $1.01 ($209.09) and select up $0.97 ($195.99) with a movement of 182 loads (115.67 loads of choice, 33.56 loads of select, 15.26 loads of trim and 17.44 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady in the South, slightly stronger in the North. The South has moved enough cattle to have fully set their range for the week, but the same can't be said for the North.
FEEDER CATTLE:
Feeder cattle contracts shot higher as the cattle complex grew in strength from a rallying futures market and surprising cash cattle trade. August feeder cattle closed $0.75 higher at $145.25, September feeder cattle closed $1.32 higher at $147.95 and October feeder cattle closed $1.47 higher at $149.10. As time continues to tick and the market nears the second half of the week, there's still two days left in the week that could try to shake the recent feeder cattle rally. Bulls look at the week and see support from every angle: cheap corn, strong cash cattle trade and a willing set of traders that seem apt to take the market higher. Bears, on the other hand, see a market that has moved significantly higher over the last six weeks; fear that lack of boxed beef demand will persuade packers into scaling back their bids in the near future and worry that with packers having bought near 100,000 head week in and week out for more than a month on end will pull them out of the cash market sooner rather than later. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers sold unevenly steady, while feeder heifers traded $2.00 to $4.00 higher. Demand was moderate to good but fat cattle bids of $105 had buyers optimistic and fueled some of the day's stronger feeder cattle prices. There were several large drafts of cattle coming off grass, and the load lots sold extremely well. All classes of steer and heifer calves sold $2.00 to $4.00 higher. The CME feeder cattle index 8/11/2020: up $0.20, $142.62.
LEAN HOGS:
Lean hog contracts closed mixed as contracts through the first quarter of 2021 were able to muster some mild support and, thankfully, allow the hog complex to close mixed versus fully lower. October lean hogs closed $0.22 lower at $51.60, December lean hogs closed $0.10 higher at $53.40 and February lean hogs closed $0.30 stronger at $60.90. The market's biggest afternoon accomplishments were a stronger close for cash prices and a stronger cutout value. A jump in the pork cutout values is especially critical from now until Labor Day as these next few weeks wrap up what is historically the last leg of grilling season. Pork cutouts totaled 348.98 loads with 308.23 loads of pork cuts and 40.75 loads of trim. Pork cutout values: up $2.05, $72.44. Wednesday's slaughter is estimated at 481,000 head, 6,000 head more than a week ago and 3,000 head less than a year ago. The CME lean hog index 8/10/2020: up $0.77, $53.79.
THURSDAY'S CASH HOG CALL: Steady. With packers buying a large volume of hogs Tuesday afternoon and being willing to move the cash market higher Wednesday afternoon leaves the cash market feeling slightly optimistic for the later part of the week.
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