It's been a painful week for the livestock contracts as the market dips lower from a lack of technical support. The lean hog market has been supported by stellar domestic port demand, but support for the cattle market is thin. Hog prices closed lower on the National Direct Afternoon Hog Report, down $2.76 with a weighted average of $60.57 on 6,801 head. December corn is up 2 1/2 cents per bushel and December soybean meal is up $3.60. The Dow Jones Industrial Average is up 152.84 points and NASDAQ is up 21.31 points.
LIVE CATTLE:
Sadly, the live cattle complex keeps etching lower as the market remains unsupported technically, fundamentally boxed beef prices have been uncertain and the cash cattle market is panicking. December live cattle closed $1.10 lower at $103.47, February live cattle closed $1.30 lower at $106.77 and April live cattle closed $1.00 lower at $109.87. Thursday's cash cattle market wasn't anything too special as the market appears to have the bulk of its business already done. There was some scattered trade that developed in the North for $164, and some light business in the South for $105. Thursday's slaughter is estimated at 120,000 head, steady with a week ago and 3,000 head more than a year ago.
Thursday's actual slaughter data yielded bothersome news. For the week ending Oct. 10, steer carcass weights jumped 4 pounds from the previous week to match the industry's highest 2015 weights; steers averaged a substantial 928 pounds and heifers surpassed 2015 levels to chime new highs at a whopping 846 pounds (2 pounds heavier than in 2015 and up 3 pounds from the previous week). For the week ending Oct. 10, actual slaughter totaled 637,073 head.
Beef net sales of 21,700 mt reported for 2020 were up 62% from the previous week and 13% from the prior four-week average. The three biggest buyers were South Korea (5,400 mt, including decreases of 400 mt), China (3,700 mt) and Japan (3,600 mt, including decreases of 600 mt).
Boxed beef prices closed higher: choice up $0.39 ($208.86) and select up $0.17 ($191.08) with a movement of 160 loads (90.97 loads of choice, 35.58 loads of select, 19.13 loads of trim and 14.61 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. It appears that the week's business could essentially be done for the week. If any more trade develops it will most likely be just some scattered trade and steady with the week's already established prices.
FEEDER CATTLE:
Feeder cattle contracts closed lower again Thursday afternoon, but deferred contracts saw more of a regression than nearby contracts did. As Monday established a new short-term low, the market has traded mostly sideways since as, fundamentally, the complex lags and, technically, the marketplace is desperate for support. At Winter Livestock Auction in Dodge City, Kansas, compared to a week ago, feeder steers weighing 650 to 1,000 pounds sold $4.00 to $7.00 lower. Feeder steers weighing 600 to 650 pounds sold $4.00 higher. Feeder steers weighing 400 to 650 pounds sold $3.00 lower with instances of $5.00 to $8.00 lower. Feeder heifers weighing 600 pounds to 950 pounds sold $2.00 to $5.00 lower with instances of $8.00 lower. Feeder heifers weighing 300 to 600 pounds sold unevenly steady. The CME feeder cattle index for Oct. 21: down $2.83, $135.53.
LEAN HOGS:
The lean hog complex closed sharply lower in nearby contracts as the market's lack of trader interest left the contracts to fall desperately. December lean hogs closed $3.00 lower at $66.20, February lean hogs closed $1.60 lower at $66.85 and April lean hogs closed $1.10 lower at $69.70.
Pork cutouts total 328.60 loads with 276.16 loads of pork cuts and 52.44 loads of trim. Pork cutout values: up $0.68, $98.44. Thursday's slaughter is estimated at 492,000 head, 10,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index for Oct. 20: up $0.07, $78.69.
Pork net sales of 26,800 mt reported for 2020 were unchanged from the previous week, but down 35% from the prior four-week average. The three biggest buyers were Mexico (13,800 mt, including decreases of 800 mt), Japan (4,900 mt, including decreases of 200 mt) and China (1,800 mt, including decreases of 1,500 mt).
Thursday's actual slaughter data shared mixed news for the hog industry. Slaughter is running more aggressively but hog weights are on the rise. For the week ending Oct. 20, slaughter totaled 2,728,076 head, up 4.43% from the previous week. Live weights averaged 290 pounds (up 2 pounds) and dressed weights were unchanged at 215 pounds.
FRIDAY'S CASH HOG CALL: Lower. Following a weak futures market and lighter export demand, the interest from packers most likely won't be that aggressive heading into the weekend.
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