Thursday's trade was centered around the follow-through support found in the morning's export report. Hog prices jumped higher as the report shared a marketing year high. Meanwhile the vigor in the live cattle complex died out and feeder cattle contracts kept scaling lower even though the corn market closed lower as well. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.48 with a weighted average of $65.11 on 6,050 head. December corn is down 1 3/4 cents per bushel and December soybean meal is down $2.20. The Dow Jones Industrial Average is up 122.05 points and NASDAQ is up 56.38 points.
LIVE CATTLE:
The live cattle complex wasn't given much of an option as traders abandoned the week's rally and saw more support aligning for the lean hog market. October live cattle closed $0.47 lower at $109.70, December live cattle closed $0.47 lower at $112.62 and February live cattle closed $0.92 lower at $115.00. Thursday's cash cattle market was spotty as Kansas and Nebraska were the only two states to trade cattle, and both regions successfully secured prices $1.00 higher than last week. Kansas sold cattle for mostly $108 and dressed cattle in Nebraska sold for mostly $169. Friday will be important for the cash cattle market as more cattle need to trade before the week's end. Thursday's slaughter is estimated at 117,000 head, 3,000 head less than a week ago and steady with year ago levels.
Thursday's actual slaughter data shared mixed news for the cattle industry. For the week ending Sept. 26, slaughter totaled 654,502 head (up 0.94% from the previous week) but carcass weights were also higher. Steer carcass weights averaged 924 pounds (up 4 pounds) and heifer carcass weights averaged 838 pounds (up 2 pounds). After seeing last week's lighter steer weight debuting, Thursday's report is extremely disappointing as the market was expecting lighter weights. If there's any bright side to the industry's heavier carcass weights, it's that processing has been aggressive. As packers see demand for end products, their chain speeds have been ample and show no sign of weakening in the near future.
Beef net sales of 20,700 mt reported for 2020 were down 16% from the previous week, but up 14% from the prior four-week average. The three primary increases were for South Korea (5,800 mt, including decreases of 500 mt), China (4,100 mt), Japan (3,700 mt, including decreases of 1,400).
Boxed beef prices closed lower: choice down $0.88 ($216.00) and select down $2.48 ($203.10) with a movement of 162 loads (82.46 loads of choice, 43.58 loads of select, 7.86 loads of trim and 28.34 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Thursday's cash cattle trade moved the market $1.00 higher than last week, but seeing the domestic demand for beef, it wouldn't be surprising if packers were willing to pay as much as $2.00 higher to secure the inventory they need.
FEEDER CATTLE:
Traders stepped to the sidelines and let Thursday's trade pass by, not overly interested in pushing the feeder cattle market higher amid questionable corn prices. October feeders closed $0.45 lower at $138.05, November feeders closed $1.42 lower at $136.45 and January feeders closed $1.35 lower at $134.97. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to a week ago, steers up to 700 pounds sold with a lower tone but steers weighing 700 to 900 pounds tested a slightly higher market. Steers weighing 900 to 1,000 pounds sold $4.00 to $5.00 higher. Heifers weighing 800 to 900 pounds sold steady to $3.00 higher. Thursday's market offered many load lots and next week's sale is when the first run of spring born calves are scheduled to test the market. The CME feeder cattle index for Oct. 7: down $0.11, $142.60.
LEAN HOGS:
Thursday's positive export report boosted the lean hog complex and sent the December lean hog complex to a new eight month high. October lean hogs closed $0.47 higher at $77.30, December lean hogs closed $2.27 higher at $66.85 and February lean hogs closed $1.27 higher at $70.40. Pork cutouts totaled 289.86 loads with 250.51 loads of pork cuts and 39.36 loads of trim. Pork cutout values: up $0.18, $95.36. Thursday's slaughter is estimated at 489,000 head, 4,000 head more than a week ago and steady with year ago levels. The CME lean hog index for Oct. 6: up $0.09, $77.50.
Thursday's actual slaughter data shared mixed news for the hog market. For the week ending Sept. 26, slaughter was higher at 2,605,783 head (up 0.87% from the previous week) but weights were also higher. Live weights averaged 287 pounds (up 2 pounds) and dressed weights averaged 213 pounds (up 1 pound).
Pork net sales of 60,200 mt reported for 2020 -- a marketing-year high -- were up 52% from the previous week and from the prior four-week average. The three primary increases were for China (29,000 mt, including decreases of 1,200 mt), Mexico (16,400 mt, including decreases of 500 mt), Canada (4,500 mt, including decreases of 400 mt).
FRIDAY'S CASH HOG CALL: Steady to slightly higher. Thursday was a positive day for cash hog market, but the fact doesn't change that packers have been extremely aggressive over the last month securing their hog supplies. Seeing that they sit comfortably and can easily export the needed product, packers may not have to jump wildly into the cash market.
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