GENERAL COMMENTS
Thursday's is thus far trading in the same usual manner that the week has set as cattle contracts scale lower while the lean hog complex jumps substantially higher. It's important to remember that with a holiday in the mix of this week's trade and next week's trade that volatility runs higher and that the complex could be subject to vast swings. By the later part of next week traders should be settling into a more normal schedule.
December corn is down 4 cents per bushel and December soybean meal is up $0.80. The Dow Jones Industrial Average is down 596.13 points and NASDAQ is down 527.94 points.
LIVE CATTLE
The live cattle complex keeps trading lower walking hand-in-hand with the feeder cattle market to lower price ranges. This week's cash cattle market has given up far more positioning than what was hoped for but as packers head into a shortened holiday weekend with substantial supplies, feeder's ability to negotiate higher prices is none. October live cattle contracts are down $0.62 at $103.85, December feeder cattle are down $0.67 at $107.80 and February feeder cattle are down $0.37 at $111.67. There's some another round of light trade in Texas at $102, $1.00 lower than Wednesday's trade. And there's been some cattle trade in the Northern plains for $162 to $163 which is easily $4.00 lower than last week's average.
Thursday's export report shared that net sales of 11,400 MT reported for 2020 were down 4% from the previous week and 19% from the prior four-week average. The three primary increases were for Japan (2,600 mt, including decreases of 500 mt), South Korea (2,000 mt, including decreases of 400 mt) and China (1,800 mt, including decreases of 100 mt).
Boxed beef prices are lower: choice down $0.67 ($226.91) and select down $0.79 ($213.03) with a movement of 87 loads (42.85 loads of choice, 17.84 loads of select, 8.39 loads of trim and 17.47 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts continue to take the brunt of this week's downward pressure as the complex falls to prices not seen since early July. September feeder cattle are down $1.35 at $137.35, October feeder cattle are down $1.42 at $138.02 and November feeder cattle are down $1.30 at $139.05. The market's downward swing could wreak havoc on feeder cattle sales later this fall especially if fat cattle prices continue to weaken.
LEAN HOGS
Thankfully the lean hog market is trading higher giving the livestock sector some positivity to speak about. The spot October contract has rallied upwards of $3.00 stronger at times throughout Thursday's morning trade and continues to jump into the afternoon with vigor and support as the cash market and cutout value is higher yet again. October lean hogs are up $2.85 at $59.25, December lean hogs are up $1.72 at $58.22 and February lean hogs are up $0.52 at $62.90.
Pork net sales of 53,600 mt reported for 2020 were up 36% from the previous week and up noticeably from the prior four-week average. The three primary increases were for China (28,700 mt, including decreases of 900 mt), Mexico (14,700 mt, including decreases of 1,500 mt), Japan (2,900 mt, including decreases of 300 mt).
The projected lean hog index for 9/1/2020 is up $0.71 at $57.71, and the actual index for 8/31/2020 is up $0.20 at $56.80. Hog prices are higher on the National Direct Morning Hog Report, up $1.89 with a weighted average of $46.11, ranging from $38.00 to $49.00 on 7,833 head and a five-day rolling average of $44.11. Pork cutouts total 191.09 loads with 169.58 loads of pork cuts and 21.51 loads of trim. Pork cutout values: up $7.44, $80.95.
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