GENERAL COMMENTS:
Early Tuesday morning it wasn't clear if the cattle contracts were going to be able to hold the market higher, as both live cattle and feeder cattle danced around both sides of steady. But as the day progressed, the market's support held true and allowed for a higher close again. Hog prices are unchanged on the National Direct Afternoon Hog Report, showing a weighted average of $43.03 on 5,546 head. December corn is up 1/4 cent per bushel and December soybean meal is down $1.70. The Dow Jones Industrial Average is up 215.61 points and NASDAQ is up 164.21 points.
LIVE CATTLE:
Live cattle contracts were able to secure a higher close for the day. October live cattle closed $0.17 higher at $105.47, December live cattle closed $0.17 higher at $109.15 and February live cattle closed $0.42 higher at $112.75. The bulk of the market's uncertainty remains in the two 2020 live cattle contracts left to trade. Once the market turns to the 2021 calendar year, there's more assurance in the market. Tuesday's slaughter is estimated at 120,000 head, 2,000 head more than a week ago and 6,000 head more than a year ago. Tuesday's cash cattle trade was mostly idle, but a light trade did develop in parts of the South for mostly $104, $1.00 lower than last week's average. The North had a modest trade of $163 to $164, which is $3.00 to $4.00 lower than last week's average.
Boxed beef prices closed mixed: choice up $0.39 ($228.34) and select down $0.57 ($214.75) with a movement of 124 loads (60.54 loads of choice, 19.58 loads of select, 26.39 loads of trim and 17.22 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Lower. As the market sits on rocky ground with the futures market and boxed beef prices are showing some weakness, packers are going to be less apt to pay higher prices this week than they are to move the week's trade lower.
FEEDER CATTLE:
Except for the spot September contract, the feeder cattle complex was able to carry the market's support into closing. September feeder cattle closed $0.17 lower at $140.12, October feeder cattle closed $0.02 higher at $140.65 and November feeder cattle closed $0.15 higher at $141.52. The market is seeming to trade comfortably around the $140 threshold, hanging just below the 40-day moving average of $141.72. At OKC West Livestock Auction in El Reno, Oklahoma, compared to a week ago, both steer and heifer calves traded lower as demand for unweaned calves continues to become less and less. With much of the area getting heavy rainfall and cooler temperatures, buying unweaned calves was a risk as sickness can easily set in. The CME feeder cattle index 8/31/2020: down $0.43, $140.52
LEAN HOGS:
The lean hog complex close fully higher with most of the market's support favoring the nearby contracts that continue to sell discounted to the 2021 contracts. October lean hogs closed $1.42 higher at $55.02, December lean hogs closed $0.65 higher at $55.77 and February lean hogs closed $0.50 higher at $62.07. The spot market's ability to close just $0.02 higher than the resistance at $55.00 isn't a full commitment to trade higher but does show some optimism. The October contract will be heavily pressured Wednesday to decide to trade back below resistance or to capitalize on the support and shoot higher. Pork cutouts total 413.21 loads with 386.55 loads of pork cuts and 26.66 loads of trim. Pork cutout values: up $1.92, $74.54. Tuesday's slaughter is estimated at 480,000 head, 4,000 head less than a week ago and 5,000 head more than a year ago. The CME lean hog index 8/28/2020: down $0.45, $56.60.
WEDNESDAY'S CASH HOG CALL: Steady. The market is seeming to need hogs and packers are willing to pay slightly higher prices for them. As the cutout continues to add value, packers could continue to pay more in the cash market.
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