GENERAL COMMENTS:
Cattle
contracts were able to catch some of the support filtrating through the
complex as support merely rolled off from the jolt in lean hog prices.
Hog prices closed sharply higher again Thursday afternoon on the
National Direct Afternoon Hog Report, up $2.46 with a weighted average
of $51.33 on 10,452 head. December corn is up 4 3/4 cents per bushel and
December soybean meal is down $0.60. The Dow Jones Industrial Average
is down 405.89 points and NASDAQ is down 221.97 points.
LIVE CATTLE:
Live
cattle contracts weren't as ambitious in their upward progression as
the feeder cattle complex was, but the market still closed Thursday
fully higher. October live cattle closed $0.40 higher at $105.10,
December live cattle closed $0.27 higher at $109.42 and February live
cattle closed $0.62 higher at $114.05. It's been interesting to see
boxed beef movement be as strong as it has been over the last two days,
which could indicate that packers are looking to clear out some space.
As the lean hog market led the cattle contracts higher, feeders opted to
hold out and to see what packers would be interested in come Friday.
Thursday's trade was mostly at a standstill. Thursday's slaughter is
estimated at 119,000 head -- up 1,000 head from a week ago and 4,000
head from a year ago.
Thursday's actual
slaughter data shared bullish slaughter numbers for the cattle market,
but carcass weights are still on the rise. For the week ending
8/29/2020, slaughter totaled 653,740 head, up 0.48% from the previous
week. Live carcass weights averaged 1,374 pounds (up six pounds) and
dressed carcass weights averaged 841 pounds (up five pounds).
Boxed
beef prices are lower: choice down $2.12 ($220.83) and select down
$0.19 ($207.32) with a movement of 198 loads (114.15 loads of choice,
36.38 loads of select, 17.89 loads of trim and 29.14 loads of ground
beef).
FRIDAY'S CASH CATTLE CALL: Steady with
the week's trade. Even with the board's higher trade through Thursday,
it would be a tough push to get cash cattle trade much higher as there's
been cattle trade already this week. But seeing the market trade steady
to $1.00 higher isn't blatantly out of the question.
FEEDER CATTLE:
Seeing
an opportunity to rally the complex higher as traders are anxious about
potentially stronger export demand, most of the feeder cattle market
jumped well above $1.00 stronger. September feeders closed $0.77 higher
at $139.17, October feeders closed $1.35 higher at $139.60 and November
feeders closed $1.45 higher at $140.40. It may seem strange that the
feeder cattle complex rallied while corn prices jumped higher and cash
cattle continue to sell lower, but Thursday's jump was really an excited
flutter from what could be stronger demand for U.S. meats as African
swine fever was detected from Germany. At Mitchell Livestock Auction in
Mitchell, South Dakota, compared to a week ago, lower undertones were
noted on steers weighing 850 pounds and up, but steers weighing 850 to
900 pounds were easily $3.00 higher. Heifers weighing up to 800 pounds
were somewhat lower from last week's market, but more notably heifers
weighing 800 to 950 pounds were a solid $3.00 lower. The CME feeder
cattle index 9/9/2020: up $0.12, $141.10.
LEAN HOGS:
The
lean hog rally was widespread as producers are hopeful that foreign
demand grows after South Korea banned imports from Germany after a
positive case of African swine fever, and the cash market jumped almost
$2.50 higher on over 10,000 head and nearby contracts closed limit
higher! A week ago, it was unclear if the market was going to be able to
keep prices above the $55.00 threshold, but if pork product stumbles
upon stronger demand heading into the last part of 2020, the hog
industry has received its saving grace. Pork cutouts total 373.66 loads
with 316.54 loads of pork cuts and 57.12 loads of trim. Pork cutout
values: up $0.73, $80.86. Thursday's slaughter is estimated at 485,000
head -- up 5,000 head from a week ago and down 2,000 head from a year
ago. The CME lean hog index 9/8/2020: up $1.39, $61.92.
Thursday's
actual slaughter data treated the hog market extremely well as
slaughter is higher and weights are slightly lower. For the week ending
8/29/2020, hog slaughter totaled 2,652,512 head, up 1.06% from the
previous week. Live weights averaged 281 pounds (down two pounds) and
dressed weights averaged 210 pounds (down one pound).
FRIDAY'S
CASH HOG CALL: Steady to higher. Packers have been running an
aggressive slaughter pace, but with there being the potential for demand
to increase, slaughter could get even more vigorous.
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