It was a long week for the livestock complex as the cattle market suffered throughout most of the week's trade, and toward the later part of the week, the lean hog market dipped lower as well. Hog prices closed $1.33 lower on the National Direct Afternoon Hog report with a weighted average of $62.13 on 5,568 head. December corn is down 1 3/4 cents per bushel and December soybean meal is down $4.60. The Dow Jones Industrial Average is up 112.11 points and NASDAQ is down 42.31 points.
From Friday to Friday, livestock futures scored the following changes: October live cattle down $2.72, December live cattle down $3.97; October feeder cattle down $0.15, November feeder cattle down $0.50; December lean hogs up $2.68, February lean hogs up $0.40.
LIVE CATTLE:
Friday's live cattle market dropped lower as the week's disappointing performance was a letdown for most. Upon boxed beef prices printing lower throughout most of the week, a weaker cash cattle market and a futures market left unsupported, the market closed the week fully lower. October live cattle closed $0.62 lower at $107.15, December live cattle closed $0.92 lower at $108.62 and February live cattle closed $0.95 lower at $11.47. Just a small sampling of cash cattle trade transpired as most of the week's business was already done. Live cattle traded in Kansas and Texas for mostly $108 this week, Nebraska and Iowa sold dressed cattle for $167 to $169 and private sources shared that Colorado sold cattle for $108 as well. Friday's slaughter is estimated at 116,000 head, 4,000 head more than a week ago and 8,000 head more than a week ago. Saturday's slaughter is projected to be around 62,000 head.
Beef net sales of 13,400 mt reported for 2020 were down 35% from the previous week and 31% from the prior four-week average. The three primarily increases were for Japan (3,900 mt, including decreases of 200 mt), Mexico (3,100 mt) and South Korea (2,200 mt, including decreases of 300 mt).
Boxed beef prices closed lower: choice down $0.45 ($210.03) and select down $2.89 ($193.52) with a movement of 127 loads (68.17 loads of choice, 38.47 loads of select, 10.85 loads of trim and 9.86 loads of ground beef).
This week's boxed beef summary was interesting to say the least. For the week, choice cuts averaged $211.74, down $4.29 from last week. Select cuts averaged $197.94, down $6.73 from last week. This week's total movement of cuts, grinds and trim totaled 820 loads.
MONDAY'S CASH CATTLE CALL: Lower. With boxed beef prices finding a seasonal low, packers are going to be more reluctant to paying higher prices for cattle.
FEEDER CATTLE:
It was a brutal week for the feeder cattle market as producers had high hopes for a robust and dynamic fall run but were left to see how the market performs under pressure as inputs rise and support for the board seemed nearly impossible to come by. October feeders closed $0.82 lower at $138.10, November feeders closed $1.45 lower at $135.02 and January feeders closed $2.77 lower at $129.32. Nearby contracts managed to get by without seeing as drastic of a drop in prices, but as long-term profitability remains a lingering question for the feeding industry, deferred contracts dived lower.
This week was the first true test to the market's fall run and, as corn prices crept higher and as wheat pastures are hard to come-by, producers saw the market struggle. Nebraska's weekly summary shared that compared to a week ago steers under 450 pounds sold $5.00 to $7.00 lower, steers weighing 450 to 500 pounds sold steady to $1.00 lower, steers weighing 500 to 550 pounds sold $1.00 to $2.00 higher, steers weighing 550 to 900 pounds sold steady to $3.00 lower and steers weighing over 900 pounds sold steady to $2.00 higher. Meanwhile, heifers under 400 pounds sold $10.00 to $13.00 lower, 400- to 500-pound heifers sold $6.00 to $8.00 lower, 500- to 700-pound heifers sold steady to $2.00 lower and heifers weighing 700 to 800 pounds sold $2.00 to $3.00 lower. The CME feeder cattle index for Oct. 15: unavailable at this time.
LEAN HOGS:
The lean hog market had high hopes that the week's strong pork demand would continue to be fueled through Friday and allow for the complex to rally into the weekend. Upon seeing a disappointing export report, the market sank back below the $70.00 resistance plane and ultimately closed lower. December lean hogs closed $0.07 lower at $69.80, February lean hogs closed $0.47 lower at $70.95 and April lean hogs closed $0.80 lower at $73.65. Pork cutouts totaled 288.80 loads with 247.76 loads of pork cuts and 41.04 loads of trim. Pork cutout values: down $2.23, $99.19. Friday's slaughter is estimated at 487,000 head, steady with a week ago and 4,000 head more than a year ago. Saturday's kill is projected to be around 264,000 head. The CME lean hog index for Oct. 14: up $0.25, $78.49.
Pork net sales of 26,800 mt reported for 2020 were down 56% from the previous week and 43% from the prior four-week average. The three primary increases were for Mexico (11,900 mt, including decreases of 800 mt), China (5,200 mt, including decreases of 1,400 mt), Japan (4,700 mt, including decreases of 300 mt).
MONDAY'S CASH HOG CALL: Slightly lower. Without an impressive export report to enthuse packers, they will most likely work through their built-up supply before worrying about supporting the cash market.
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