GENERAL COMMENTS:
The cattle complex looks to the week's end and prays that Friday's damage is minimal, while the lean hog market has had a bumper week seeing cash prices, pork demand and the board all close higher. Hog prices are unavailable on the National Direct Afternoon Hog Report due to packer submission problems. October lean hogs are up $2.85 at $59.25, December corn is down 5 cents per bushel and December soybean meal is up $2.60. The Dow Jones Industrial Average is down 807.77 points and NASDAQ is down 598.34 points.
LIVE CATTLE:
Thursday's trade was unfortunately another day of lower prices for the live cattle complex with little good to mention as cash prices keep walking lower and both choice and select cuts closed lower again too. October live cattle closed $0.55 lower at $103.92, December live cattle closed $0.62 lower at $107.82 and February live cattle closed $0.37 lower at $111.67. The Southern Plains sold a light run of cattle for $102 to $103, moving this week's trade $2.00 to $3.00 lower than last week. And in the Northern Plains, dressed cattle sold for $162 to $163, marking prices $4.00 lower than last week's average. Live cattle prices are still lingering above the 40-day moving average ($103.43) and the 100-day moving average ($98.11), but as downward pressure only seems to keep building, Friday's trade could sink below the 40-day moving average. Thursday's slaughter is estimated at 118,000 head, down 1,000 head from a week ago and 1,000 head more than a week ago.
Thursday's actual slaughter report shared bullish news for the beef sector for the week ending 8/22/2020. The week's slaughter totaled 650,618 head, which was up 1.08% from the previous week, and carcass weights remained mostly unchanged. Live weights were up 1 pound to average 1,368 pounds, and the average dressed weight remained unchanged at 836 pounds.
Boxed beef prices closed lower: choice down $0.34 ($227.24) and select down $1.32 ($212.50) with a movement of 148 loads (89.98 loads of choice, 25.36 loads of select, 9.42 loads of trim and 23.08 loads ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Friday's trade will be critical to watch as there are two ways the chips could fall: One, this week's volume remains rather light as feedlot managers hate seeing cattle for these prices, but with boxed beef prices scaling lower they could decide by Friday that it's best to take what's offered now and follow the cardinal rule of, "your first loss is usually cheapest loss." Or, option two: feedlots could dig their heels in the ground and roll the cattle over to next week's trade, simply leaving this week's volume slim.
FEEDER CATTLE:
Feeder cattle contracts scaled lower throughout Thursday's trade, leaving the complex at prices not touched since the middle of July. With support seeming to run from live cattle, feeder cattle have become even more desperate as the market's fall run will start to see spring born calves hitting the market in about a month. Thursday's close leaves the feeder cattle market trading lower than the 40-day moving average ($141.91) but still above the 100-day moving average ($133.76). September feeder cattle closed $1.10 lower at $137.60, October feeder cattle closed $1.12 lower at $138.32 and November feeders closed $0.97 lower at $139.37. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to a week ago, steers weighing 800 to 850 pounds sold mostly $3.00 higher while lower undertones were noted for the rest of the sale, but feeder heifer prices saw the biggest losses. The CME feeder cattle index 9/2/2020: unavailable at this time.
LEAN HOGS:
Pork producers are more than thrilled to see Thursday's trade close as strong as it did, but as the market dances with volatility given the upcoming shortened holiday week, many are wondering how sustainable these levels are. But with pork cutouts closing a vast $6.68 higher there's no sense in losing sleep over what's to come -- the market might as well celebrate the day's phenomenal demand in pork protein. Pork cutouts totaled 323.49 loads with 299.23 loads of pork cuts and 24.46 loads of trim. Pork cutout values: up $6.68, $80.19. Thursday's slaughter is estimated at 480,000 head, 8,000 head more than week ago and 14,000 head more than a year ago. Wednesday's hog slaughter was revised to 474,000 head. The CME lean hog index 9/1/2020: up $0.71, $57.71.
Thursday's actual slaughter data shared bullish news for the hog market as well. For the week ending 8/22/2020, hog slaughter totaled 2,624,663 head which was up 2.47% from the previous week. Actual live weights were unchanged at 283 pounds and dressed weights were also unchanged from the previous week at 211 pounds.
FRIDAY'S CASH HOG CALL: Steady. It's a tough call to make heading into Friday's trade as pork producers are current and are liking these higher prices, but packers could look at the upcoming kill schedules and see no need to overbuy for a shortened holiday week.
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