GENERAL COMMENTS:
Friday's trade was lackadaisical as traders were leery of jumping into the livestock complex and simply let contracts scale lower into the weekend. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.89 with a weighted average of $63.52 on 4,370 head. December corn is down 3 cents per bushel and December soybean meal is up $4.00. The Dow Jones Industrial Average is down 105.19 points and NASDAQ is down 242.50 points.
From Friday to Friday, livestock futures scored the following changes: October live cattle up $0.60, December live cattle down $0.30; October feeder cattle down $0.42, November feeder cattle down $0.28; October lean hogs up $2.75, December lean hogs down $1.93.
LIVE CATTLE:
Live cattle contracts fell into the same position as the rest of the livestock complex -- left scaling lower into the week's close without any support to move the market higher. Friday's cash cattle trade was as expected, as feedlots simply cleaned up some lots here and there, but didn't offering much of a substantial trade for the day. However, it has been impressive to see the due diligence from feeders as they have successfully worked the cash cattle market higher for the last three weeks. This week, Southern live cattle sold for mostly $107 ($2.00 higher than last week) and Northern cattle sold for $167 to $168 ($2.00 to $3.00 higher). Friday's slaughter is estimated at 117,000 head, 5,000 head more than a week ago and 7,000 head more than a year ago. Saturday's kill is projected to be around 70,000 head.
Boxed beef prices performed exceptionally well this week given that seasonally pries are still weakening and that, historically, demand is soft. Over the past week, on average, choice cuts averaged $2.18 (up $1.23 from last week) and select cuts averaged $2.07 (up $0.35 from last week) and total load counts of cuts, grinds and trimmings totaled a substantial 705 loads. As pork cutouts have seen such a spike in prices over the last four weeks, retailers are seeing more interest pushed back to the beef sector as pork becomes an expensive option.
Boxed beef prices closed slightly lower: choice down $0.10 ($218.88) and select down $0.01 ($207.61) with a movement of 121 loads (62.82 loads of choice, 16.37 loads of select, 9.27 loads of trim and 32.64 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Monday will likely pose again as a typical start to the week, not offering much for excitement in the cash cattle arena but allowing feeders to work up their showlists and price their cattle. Seeing stronger boxed beef prices will motivate feeders to price cattle higher again, but with packers sitting on even more inventory next week could be a challenge for feeders.
FEEDER CATTLE:
Feeder cattle contracts closed lower with nearby contracts taking the brunt of Friday's pressure. October feeder cattle closed $1.02 lower at $139.90, November feeders closed $1.37 lower at $139.87 and January feeders closed $1.55 lower at $138.00. Wyoming's Weekly Cattle Auction Summary shared that, compared to last week, steer calves and most feeder cattle sold unevenly steady, except 900-pound steers, which sold $5.00 higher. Heifer calves sold unevenly steady with yearling feeders trading steady to $2.00 higher. Slaughter cows sold steady, but slaughter bulls sold $4.00 lower. As the drought continues to spread across the U.S., some cattlemen have lost ample feed resources, which is pressing them to market calves earlier than normal. The CME feeder cattle index for Oct. 1: up $0.58, $142.96.
LEAN HOGS:
As the week absorbed another moderate export report, questions about how sustainable these prices levels are remain. October lean hogs closed $0.35 higher at $74.50, December lean hogs closed $0.35 lower at $62.50 and February lean hogs closed $0.20 lower at $67.67. Pork cutouts total 295.38 loads with 269.24 loads of pork cuts and 26.13 loads of trim. Pork cutout values: down $3.50, $92.15. Friday's slaughter is estimated at 464,000 head, 2,000 head more than a week ago and 18,000 head less than a year ago. Saturday's kill is projected to be around 213,000 head. The CME lean hog index for Sept. 30: up $0.20, $76.74.
MONDAY'S CASH HOG CALL: Steady to somewhat lower. Packers should be motivated to keep kill schedules booked back to back with pork prices as high as they are, but as they sit on ample supply, packers may step away from the cash market.
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