GENERAL COMMENTS:
Wednesday took out any question as to whether or not the cattle market had found a short-term low earlier in the week. Starting from the day's initial moments, the live cattle and feeder cattle contracts dipped $1.00 to $2.00 lower and closed the day with substantial losses. But despite the weakness in the cattle sector, the lean hog market once again closed higher with the cash market jumping higher as well. Hog prices were sharply higher on the National Direct Afternoon Hog Report, up $1.22 with a weighted average of $44.25 on 6,737 head. December corn is up 3/4 cent per bushel and December soybean meal is down $0.60. The Dow Jones Industrial Average is up 454.84 points and NASDAQ is up 116.77 points.
LIVE CATTLE:
The live cattle complex didn't endure losses as steep as the feeder cattle market, but cash cattle prices were lower again, which will surely pressure Thursday's market. October live cattle closed $1.00 lower at $104.47, December live cattle closed $0.70 lower at $108.45 and February live cattle closed $0.70 lower at $112.05. Overall, the day's losses weren't astronomical in any sector, but added up all together, the live cattle market had a brutal day with the board closing lower; both choice and select cuts rounding out the day lower and cash cattle prices being weaker as well. There was a light trade of cash cattle reported in the North for $163, $4.00 lower than last week's weighted average. And there was another round of trade in the South for mostly $103, $2.00 lower than last week's weighted average. Wednesday's slaughter is estimated at 117,000 head, 1,000 head less than a week ago and steady with a year ago.
Boxed beef prices closed lower: choice down $0.76 ($227.58) and select down $0.93 ($213.82) with a movement of 114 loads (53.10 loads of choice, 18.64 loads of select, 26.42 loads of trim and 15.71 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week. It's been a rough week for feedlots as packers have whittled the market $2.00 to $4.00 lower depending on the region. With there being a good test on the market, the week's trade will most likely stay at these levels but could soft even more.
FEEDER CATTLE:
The feeder cattle complex struggled throughout the day. September feeder cattle closed $1.42 lower at $138.70, October feeder cattle closed $1.20 lower at $139.45 and November feeder cattle closed $1.17 lower at $140.35. The market's pressure largely stemmed from traders allowing the market to fall lower as they fear this downward cycle could be strung out for the next three to four weeks. And adding to the pressure, the live cattle market's lower cash cattle trade and fully lower boxed beef close didn't offer any positive encouragement whatsoever. The final report at OKC West in El Reno, Oklahoma, shared that compared to last week, feeder steers under 800 pounds sold $3.00 to $6.00 lower, and steers 800 pounds sold steady to $1.00 higher. Feeder heifers traded $3.00 to $6.00 lower with the exception of heifers weighing 800 to 900 pounds. which sold mostly $1.00 to $2.00 lower. Demand was moderate throughout the sale, but feeder steers sold better as demand was stronger. Both steer and heifer calves traded with a lower undertone as the demand for unweaned calves is weaker. The CME feeder cattle index 9/1/2020: down $0.17, $140.35.
LEAN HOGS:
Through Wednesday's morning hours, it wasn't unclear whether the lean hog complex was going to commit to trading about the $55.00 resistance level or if the complex was going to submissively drop to trading lower, once again. But as the day developed and trader support grew, the market closed substantially higher and blew the spot October contract well above the $55.00 threshold. October lean hog contracts closed $1.37 higher at $56.40, December lean hogs closed $0.72 higher at $56.50 and February lean hogs closed $0.30 higher at $62.37. With the market's robust close and hefty support through the cash hog market, Thursday may be able to make another run at higher trade. Pork cutouts totaled 357.21 loads with 313.21 loads of pork cuts and 44.00 loads of trim. Pork cutout values: down $1.03, $73.51. Wednesday's slaughter is estimated at 480,000 head, 2,000 head less than a week ago and 8,000 head less than a year ago. Tuesday's hog slaughter was revised to 475,000 head. The CME lean hog index 8/31/2020: up $0.20, $56.80.
THURSDAY'S CASH HOG CALL: Steady. Packers are obviously interested in the hog market as their aggressive buying this week has been vastly welcomed from producers. If the week can close with even steady prices, producers will be happy.
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