Tuesday Closing Livestock Market Update - Futures Show Additional Widespread Weakness

GENERAL COMMENTS:

Weakness developed Tuesday as nearly all livestock markets posted moderate to aggressive losses. The overall lack of support in the complex continues to add concern that further weakness will develop in early September as traders head toward the long Labor Day weekend. Following contract highs in live cattle and feeder cattle futures during the month of August, some traders also focused on adjusting positions on the last day of the month. Hog prices moved higher on the National Direct Afternoon Hog Report in moderate trade, added $2.23 with a weighted average of $92.95 on 9,034 head. December corn is down 8 1/2 cents per bushel and December soybean meal is down $1.60 per ton. The Dow Jones Industrial Average is down 42 points and NASDAQ is down 11 points.

LIVE CATTLE:

Active pressure developed across the live cattle complex with August through December futures posting the most aggressive losses, each closing with triple-digit price reductions. The early pressure in grain trade quickly set the tone for a bearish overall commodity market. August live cattle futures posted strong early day gains as the few traders still in the market tried to get out of current commitments. Once this flurry of activity cleared the market, all nearby contracts posted losses of $1 to $1.42 per cwt. After setting new contract highs last week, traders backed away from previous gains, with Tuesday's close enough to establish August lows in the October contracts. Even though long-term technical triggers have not yet been hit, traders are going into the month of September with concerns that market pressure may continue. August live cattle closed $1.30 lower at $118.95, October live cattle closed $1.42 lower at $126.90, and December live cattle closed $1.20 lower at $133.47. Cash cattle trade is very quiet Tuesday afternoon with packer interest still limited. The underlying pressure in futures trade is leaving packers with no sense of urgency to step back into the market. This could keep most trade developing in the last half of the week, although, at this point, it is expected that both sides would rather be done earlier than later due to the holiday weekend. Asking prices are still relatively quiet also with live cattle in the South priced at $125 and higher, although limited interest in the North has been seen from feeders.

Tuesday's slaughter is estimated at 121,000 head, 1,000 more than a week ago and steady with a year ago.

Boxed beef prices closed lower: choice down $0.67 ($342.11) and select down $0.52 ($312.53) with a movement of 89 loads (43.51 loads of choice, 15.67 loads of select, 15.59 loads of trim and 11.08 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. More interest from packers is expected to slowly develop Wednesday morning, although, at this point, it is uncertain just how many cattle packers need to buy for the next two weeks. Given that delayed deliveries have been seen in many negotiated trade deals over the last several weeks, packers may still be focusing on long-term market direction and unwilling to chase prices higher.

FEEDER CATTLE:

Unlike early week trade when feeder cattle were supported by lower grain markets, the universal pressure in most commodity markets and strong downward shift in live cattle trade left nearby and deferred feeder cattle unsupported Tuesday afternoon. This overall weakness in the complex is creating some additional concern that increased pressure may develop during early September, leaving traders focusing on squaring positions on the last day of August. Nearby futures have lost more than $3 per cwt over the last week, although prices are still nowhere near the level where technical or fundamental support levels will be tested. September feeders closed $1.05 lower at $163.00 October feeders closed $1.20 lower at $167.75 and November feeders closed $0.87 lower at $169.65. The CME Feeder Cattle Index for Aug. 30: $159.54, down 0.02.

LEAN HOGS:

Active late month selling pressure developed in lean hog futures, creating uniform pressure across the livestock complex. October futures led the market lower with triple-digit losses seen most of the session as traders are not only adjusting positions ahead of the holiday weekend and month end, but also are concerned about the wide market shifts in pork and cash hog values. This could limit further short-term market support in both nearby and deferred lean hog contracts. October lean hogs closed $1.35 lower at $88.80, December lean hogs closed $0.77 lower at $81.95, and February lean hog futures closed $0.35 lower at $83.40. Pork prices posted narrow losses with moderate weakness seen in several pork cuts. Pork cutouts totaled 357.66 loads with 324.69 loads of pork cutouts and 32.98 loads of trim. Pork cutout values: down $0.71, $109.01. Tuesday's slaughter is estimated at 479,000 head, 5,000 head above a week ago and up 11,000 from a year ago. The CME Lean Hog Index for Aug. 30: up $0.23, $103.72.

WEDNESDAY'S CASH HOG CALL: Steady. Price shifts are likely to remain moderate through the rest of the week with packers focusing on reduced procurement levels surrounding the holiday weekend.

Tuesday Midday Livestock Market Summary - Losses Sweep Through Trade

GENERAL COMMENTS:

Triple-digit losses are seen in cattle and hog futures Tuesday morning as traders are focusing on the pressure in other commodity markets, as well as growing concerns that meat prices may continue to move lower heading into the holiday weekend. Lightly traded August live cattle futures are the only contract holding gains at midday. But, traders are squarely focused on the direction of October futures and backing away from previous support. Sluggish trade is expected through most of the week, which may continue to add to price volatility over the coming days. December corn is down 13 cents per bushel and December soybean meal is down $1.20 per ton. The Dow Jones Industrial Average is up 30 points.

LIVE CATTLE:

Nearby live cattle futures remain extremely weak with triple-digit losses sweeping across the market Tuesday. Wide market swings in August futures are nothing more than an indication of the extremely light trade in the soon-to-expire spot-contract month. October futures remain the contract to watch, but early morning losses allowed prices to trade $1.22 per cwt lower at midday, moving to $127.12 per cwt. The move below $128 per cwt created technical pressure in nearby live cattle trade, creating concerns that additional follow-through pressure may develop during the week, especially if active losses continue in grain trade. The double-digit losses in corn prices are being closely watched as live cattle traders are not willing to aggressively move in the opposite direction as other commodity markets, especially given the developing softness in beef values. Cash cattle activity remains generally quiet with bids still hard to pin down. Asking prices are starting to be seen in the North at $125 and higher per cwt, but most activity is likely to be pushed off until at least Wednesday given the weakness in futures trade. Although both sides would like to finish needed business before Friday, most activity will likely be targeted for some time Wednesday or Thursday. 

Tuesday morning's boxed beef prices are higher in light trade, with choice cuts $0.36 higher at $343.14 and selects up $2.06 at $314.61 on a total count of 59 loads. Dow Jones estimated Tuesday's cattle slaughter at 120,000 -- up 1,000 from a week ago, but steady with year ago levels.

FEEDER CATTLE:

The gains seen early in the week associated with lower feed and corn prices were not enough to create market support Tuesday morning. October and November futures are holding triple-digit losses following active pressure in most commodities, including live cattle and corn futures. October futures still remain in the top third of recent trading ranges, as traders are slowly but steadily backing away from contract highs set last week. End-of-month market pressure may continue to add further weakness to the complex as trade volume remains generally sluggish. The CME Feeder Index was priced at $159.56 for Aug. 27.

LEAN HOGS:

Active pressure in lean hog futures developed Tuesday despite just moderate losses Monday. October futures have continued to lead the complex lower, with futures moving below $89 per cwt and holding a $1.30 per cwt loss at midday. This shift lower is creating limited but noticeable pressure through the entire complex, with other nearby contracts trading 30 to 90 cents lower. Given the choppy market moves over the last month, prices remain well within a wide sideways market trend, but spot month contract have moved over $2 per cwt below recent market highs, creating uncertainty about further buying support in early September. October contacts still hold a $7 per cwt premium over December contracts, creating concern that uncertain pork demand at the end of the year combined with current production levels may keep nearby prices relatively soft. Cutouts are up $2.43 at $112.15 Tuesday morning on 227.14 loads. Negotiated hog prices are 1.21 higher per cwt lower with a weighted average price of $91.48 per cwt on 5,180 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $99.95 per cwt. Dow Jones estimated Tuesday's hog slaughter at 476,000 -- 4,000 lower than a week ago, while 1,000 less than year ago levels. The CME Lean Hog Index is estimated at $103.72 for Aug. 30.

Tuesday Morning Livestock Market Update - Final Trading Day for August Cattle

GENERAL COMMENTS:

Live cattle showed spillover pressure from the weakness of the August contract that will cease trading Tuesday. October will then move to front month and is holding a premium to cash. Unless cattle supplies tighten and demand remains strong, some premium might erode out of the market over time. Although the report a week ago showed a trend of lower cattle supplies, traders seem convinced demand will slow, and beef supply will be sufficient. Packers have not been very anxious to pay more for cattle despite high boxed beef prices. Now that boxed beef is declining, it may be more difficult to see higher cash. Choice cuts fell $2.56 with select cuts down $2.97. The prospect of higher cash may be dimmed due to the upcoming holiday weekend. The Commitment of Traders report showed funds were net buyers of 21,876 futures contracts moving their net-long positions to 92,649 contracts.

It was not surprising to see hogs lower Monday, but that was not before they opened higher on follow through from the strength on Friday. Traders received more of a sense of the market as the morning progressed and it did not look very supportive. The National Direct Afternoon report showed price down $1.82. Along with that, cutouts fell $6.87. That took away both fundamental and technical support. Yet even with that, futures held well. With the upcoming holiday weekend, packers are not likely to be aggressive in the cash market. The Commitment of Traders report showed funds as net buyers of 2,187 futures contract bringing their net-long positions to 79,207.

	BULL SIDE		BEAR SIDE
1)	August live cattle futures cease trading Tuesday, which may relieve some spillover pressure on the rest of the complex.	1)	Cattle have more than eliminated the gains seen from the positive numbers on the Cattle of Feed report. Traders are not convinced tighter numbers may be an issue as demand slows.
2)	Cattle supplies are expected to tighten as the year progresses, leaving packers no choice but to increase bids to obtain the required tonnage to meet demand.	2)	October cattle futures are now back down into the range they have been in since mid-June, indicating traders feel the current premium may be as good as it gets.
3)	Hog futures established higher highs before selling pressure unfolded. The decline Monday might trigger more buying interest from traders as they position themselves for the long haul.	3)	Lower cash and falling cutouts do not bode well for hog futures. Support will need to develop soon, or futures will fall back.
4)	Weaker cash and lower cutouts may be a temporary result of the holiday weekend. Prices may rebound as the market looks ahead to upcoming supply and demand.	4)	The upcoming holiday will leave the market somewhat lethargic and packers less aggressive as plants will be processing less. .

Monday Closing Livestock Market Update - Trade Leads to Early Week Losses

GENERAL COMMENTS:

Feeder cattle futures were the only livestock markets to show any sign of support Monday, as traders saw the strong market pullback in grain trade as a signal of lower feed and production costs. This weakness in grain markets will also have implications in hog and live cattle production costs, but the short-term moves seem to be focused on concern of overall pressure building in commodities in general. It is also likely that trade will remain sluggish through most of the week ahead of the long holiday weekend. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, fell $1.82 with a weighted average of $90.72 on 5,380 head. December corn is down 11 cents per bushel and December soybean meal is down $5.20 per ton. The Dow Jones Industrial Average is down 2 points and NASDAQ is up 154 points.

LIVE CATTLE:

Although August live cattle futures remain very lightly traded and not consistent with long-term market demand, the spot month futures tumbled lower as traders try to adjust positions before the expiration of the contact. October through April futures were more consistent with the overall tone of the market as prices fell 20 to 80 cents per cwt with very limited overall trade and lack of long-term direction Monday. Trade is likely to be sluggish through most of the week, although traders will closely follow the moves in both boxed beef trade and cash cattle markets, along with outside market commodities. The concern with sharply lower commodity markets Monday is that this overshadowing weakness may have a significant impact in nearby and deferred live cattle trade, further limiting fundamental traders from moving back into the complex. August live cattle closed $1.75 lower at $120.25, October live cattle closed $0.80 lower at $128.32, and December live cattle closed $0.65 at 134.67. Cash cattle activity remains undeveloped with asking prices and bids still hard to pin down. It is likely that trade will be seen before Friday as both sides are likely to want to wrap things up in front of the weekend. Showlists are generally mixed for the week, steady in Texas, higher in Kansas, and lower in Nebraska and Colorado.

Monday's slaughter is estimated at 117,000 head, 1,000 than a week ago and 2,000 head less than a year ago.

Boxed beef prices closed lower: choice down $2.56 ($342.78) and select down $2.97 ($312.55) with a movement of 86 loads (43.51 loads of choice, 15.67 loads of select, 15.59 loads of trim and 11.08 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady. Limited early interest is expected once again Tuesday morning. Although overall activity is likely to be accelerated from a normal week, most business is still likely to be seen Wednesday or Thursday.

FEEDER CATTLE:

Follow-through buyer support after Friday's shift higher has created spillover support through most nearby feeder cattle trade Monday. Traders focused on the sharp pullback in grain trade, which posted an 11-cent loss in December corn contracts and aggressive losses in soybean markets as signals of lower production costs. Although the overall softness in live cattle trade left most traders unwilling to aggressively step back into the market, "testing the waters" for higher gains early in the session allowed October through March contract to sustain further late day support. September feeders closed $0.60 lower at $164.05 October feeders closed $0.52 higher at $168.95 and November feeders closed $0.57 higher at $170.52. The CME Feeder Cattle Index for Aug. 27: $159.56, up 0.23.

LEAN HOGS:

Limited activity was seen through the lean hog complex Monday as traders slowly but steadily backed away from Friday's triple-digit gains. The overall focus on Monday's livestock trade was derailed by double-digit losses in corn markets and concern that overall weakness may continue to trickle into most commodity markets. Traders seemed to get very little encouragement from aggressive gains in the morning pork report, as futures traders have heavily discounted daily moves in both pork and cash hog price moves. Limited overall trade is likely to be seen through most of the week, although the light volume could leave prices to move in a wider shift without significant fundamental or technical justification. October lean hogs closed $0.57 lower at $90.15, December lean hogs closed $0.32 lower at $82.72, and February lean hog futures closed $0.57 lower at $83.75. Pork prices tumbled lower as strong pressure in ham and belly cuts developed. Pork cutouts totaled 271.26 loads with 232.74 loads of pork cutouts and 38.52 loads of trim. Pork cutout values: down $6.87, $109.72. Monday's slaughter is estimated at 477,000 head, 40,000 head above a week ago and up 2,000 from a year ago. The CME Lean Hog Index for Aug. 27: down $0.13, $103.49.

TUESDAY'S CASH HOG CALL: Steady. Limited overall cash market changes are expected to be seen Tuesday morning, although the back and forth shifts in average negotiated lean hog trade will likely keep markets fluid and packers and producers trying to hit a quickly moving, volatile target.

Monday Midday Livestock Market Summary - Quiet Trade Brings Questions of Weekly Activity

GENERAL COMMENTS:

Interest was slow to develop in livestock futures early Monday morning. The bearish moves in grain markets created some shifts in overall production costs, which has helped create underlying support in feeder cattle and lean hog futures. But, overall, the tone of the market remains generally unchanged as traders adjust price levels. The combination of last week's market shifts and traders preparing for the upcoming holiday weekend is likely to keep markets mixed through the entire session. December corn is down 10 cents per bushel and December soybean meal is down $2.00 per ton. The Dow Jones Industrial Average is up 18 points.

LIVE CATTLE:

Live cattle futures are mixed in a moderate to wide range at midday with lightly traded August futures holding at $122.72 per cwt following a 72-cent gain. Other nearby contracts are trading 27 to 70 cents lower with limited underlying support after the grain markets tumbled during Monday trade. This could add some additional softness in the complex, although prices are not likely to show aggressive sharp losses given the fundamental support in the market. Cash cattle markets remain quiet with bids and asking prices undeveloped at this point. It is likely trade may trickle in through the week as both sides would rather finish any needed business before Friday and the long holiday weekend. It is uncertain just how active packers will be for short-term needs. Packers have been slowly acquiring cattle for delayed delivery over the past month, which is also creating some concern that there may not be too many open slots for next week deliveries. This will likely also shift the emphasis back and forth between negotiated and formula trade activity in the coming weeks, possibly limiting further upside market movement surrounding the Labor Day holiday.

Monday morning's boxed beef prices are lower in light trade, with choice cuts $2.63 lower at $342.71 and selects down $2.39 at $313.13 on a total count of 51 loads. Dow Jones estimated Monday's cattle slaughter is 119,000 -- up 1,000 from a week ago, but steady with year ago levels.

FEEDER CATTLE:

The moderate price shifts in live cattle futures Monday morning was not enough to create any significant interest in feeder cattle futures. September contracts remain generally steady with limited volume; narrow to moderate (22 to 40 cent) gains in other nearby contracts are focused more on the aggressive pullback in early week corn trade and how this could further impact overall production costs. With December corn futures trading a dime lower at midday, the lack of active support in the feeder cattle futures may indicate buyer support may be even more limited than previously thought. Overall, trade is likely to remain subdued through the week with the holiday weekend likely to keep some traders out of the market until well into September. Early reports of Joplin Regional Stockyards' feeder cattle prices are steady to $3 per cwt higher. This could add some underlying support in other sales through the week. The CME Feeder Index was priced at $159.39 for Aug. 26.

LEAN HOGS:

Following the aggressive market rally at the end of last week, lean hog futures seem to have little incentive to move significantly in either direction. Although October futures are starting to give back a piece of the hard-fought gains of last week, with prices $0.65 per cwt lower, the rest of the complex is stuck within a very narrow range from 20 cents lower to 25 cents higher. If prices remain within the current level, traders will likely remain mostly out of the market with the focus on upcoming moves in cash hog and pork cuts. With the end of August quickly approaching, it is possible that trade will remain quiet until early September. Some traders may even be exiting the market ahead of the holiday weekend, further limiting market direction. Active support in pork cutout levels developed Monday morning. The limited trade volume may create additional price shifts on the afternoon report, but belly cuts are reported $54 per cwt higher, which is skewing price levels across the entire complex. Cutouts are up $6.86 at $123.45 Monday morning on 143.74 loads. Negotiated hog prices are 1.82 lower per cwt lower with a weighted average price of $90.27 per cwt on 4,605 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $102.36 per cwt. Dow Jones estimated Monday's hog slaughter at 473,000 -- 4,000 lower than a week ago, while 1,000 less than year ago levels. The CME Lean Hog Index is estimated at $103.49 for Aug. 27.

Monday Morning Livestock Market Update - Hogs May Set Back

GENERAL COMMENTS:

Another week had been put behind us and although cash cattle traded higher, the $1 gain was far from what was hoped the price would be. August live cattle were under significant pressure as futures had to hold close to cash as Tuesday is the last trading day for the contract. The inability of cash to trade more than $1 higher eliminated the premium that had been in the market. Futures have basically eliminated all of the gains realized after the Cattle on Feed report. This weakness left packers unwilling to pay more than $1 higher. It may be tough for feedlots to squeeze more out of packers this week as it is the week before Labor Day when beef demand may peak. Actually, it may have peaked already as boxed beef prices have been slipping last week. On Friday, choice cuts were down $1.93 and select cuts fell $4.07. Slaughter schedules will be disrupted this weekend, which may leave packers unwilling to be very aggressive with purchases.

Hog futures were on fire again Friday as it was the day for moving higher. The strength was greater than usual, which pushed futures through the upside of the sideways price trend triggering stops and increasing buying interest. October handily closed the chart gap and then some, closing at the highest level since Aug. 3. The surge of futures did not find support from stronger cash as price on the National Direct Afternoon report was down $1.32. Cutouts really did not provide much support as they were only up $0.19. The strength was only technical in nature with trader's perceptions of tighter supply also playing a part. Monday may be a down day again.

	BULL SIDE		BEAR SIDE
1)	Live cattle futures are down at the level of support that had been holding for weeks. This should remain as support as packers will be negotiating deals in a tighter market.	1)	Cattle futures have basically lost all of the gains of last week as traders digested the Cattle of Feed report and took it in stride. Cattle supplies will need to tighten further before a solid upward trend may develop.
2)	Packers will need to look beyond Labor Day and met continued strong demand. Cattle will need to be purchased in order to keep supply readily available for demand.	2)	Packers are not expected to be aggressive during the week before Labor Day. Higher bids may be difficult to find.
3)	Hog future broke through chart resistance potentially establishing a trend higher. Traders may renew aggressive technical buying.	3)	Friday was an up day for futures and if the recent pattern holds, futures might be down again Monday.
4)	October is at a large discount to cash and may continue to narrow the gap.	4)	Packers certainly are not aggressive in the cash market as they have been able to obtain the necessary hogs to satisfy demand.

Friday Closing Livestock Market Update - Lean Hog Futures Rally

GENERAL COMMENTS:

From Friday to Friday, livestock futures scored the following changes: Aug live cattle off $2.28, Oct live cattle up $0.07, Sep feeder cattle off $0.85, Oct feeder cattle up $0.80, October lean hogs up $2.10, December lean hogs up $1.35. Lean hog futures quickly became the bright spot of the day and week Friday afternoon with all nearby contracts posting triple-digit gains during Friday's session. The back-and-forth shifts in cash hog and pork values over the last few days have kept lean hog trade on an ever-changing roller coaster. But October futures led the entire livestock market higher, helping to secure not only a positive daily move, but strong weekly price shift. Cattle futures remained mixed in limited late-week trade. The tendency to back away from early week gains continues to spark uncertainty through the complex, but late-week positioning helped to minimize further losses. Boxed beef prices appear to have peaked, creating concern of further losses in beef prices heading into the Labor Day weekend. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, fell $1.32 with a weighted average of $92.54 on 5,115 head. December corn is up 3 cents per bushel, and December soybean meal is down $3.20 per ton. The Dow Jones Industrial Average is up 241 points, and the NASDAQ is up 183 points.

LIVE CATTLE:

Firm pressure in nearby live cattle futures developed throughout Friday, although early morning activity seemed to focus more on price stability within the first couple hours of trade. The softness in live cattle trade through the last four days has totally erased support seen Monday and is creating additional concern that further losses may develop if beef prices start to actively slide lower after the Labor Day holiday. August live cattle closed $1.27 lower at $122, October live cattle closed $0.47 lower at $129.12 and December live cattle closed $0.30 lower at $135.32. Cash cattle markets were sluggish Friday, although late trade Thursday seems to be the focus of most volume. Overall trade remains generally light, but going into the holiday week, it may not be overly surprising that overall negotiated trade will remain quiet. Trade in the North has been reported for the week at $202 dressed basis and $125 per cwt live basis. Prices are generally $1 per cwt higher than last week, which is creating some underlying support through the market.

Friday's slaughter is estimated at 116,000 head -- steady with a week ago and 1,000 head more than a year ago. Week to date totals are listed at 579,000 head, 16,000 less than a week ago and 11,000 below year-ago totals.

Boxed beef prices closed lower: choice down $1.93 ($345.52) and select down $4.07 ($315.52) with a movement of 69 loads (36.02 loads of choice, 10.21 loads of select, 9.46 loads of trim and 12.82 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. Following cash cattle trade at the end of the week, generally $1 per cwt higher. The expectation is that feeders will look for higher prices heading into the long holiday weekend. Packers may limit spending based on reduced packer throughput and holiday schedules.

FEEDER CATTLE:

Narrow gains slowly developed in all feeder cattle futures Friday, but this was not enough to offset the pressure seen in the complex over the last three sessions. The early week support and optimism following last week's USDA Cattle on Feed report seems like a distant memory as nearby contracts have given back all of the gains and even more over the last few days. Friday's trade had little to do with price shifts and trend changes, but traders focused more on position-taking at the end of the week. This will create even more uncertainty next week as to longer-term market support. September feeders closed $0.20 higher at $164.65, October feeders closed $0.15 higher at $168.42, and November feeders closed $0.30 higher at $169.95. The CME feeder cattle index 8/26/2021: $159.39, up 0.60.

LEAN HOGS:

Sharp gains quickly flooded the lean hog futures trade as traders seem to be focusing on the potential of adding longer-term support to pork values, which have eroded over the past week. The surge above $90 per cwt in October futures is viewed as bullish for the short-term trend, even though these prices have not set contract, or summer highs. October lean hogs closed $2.85 higher at $90.72, December lean hogs closed $1.65 higher at $83.05, and February lean hog futures closed $1.10 at $84.32. Pork prices trickled higher at the end of the week. Pork cutouts totaled 306.86 loads with 275.17 loads of pork cutouts and 31.69 loads of trim. Pork cutout values: up $0.19, $116.59. Friday's slaughter is estimated at 468,000 head -- 8,000 head above a week ago and down 10,000 from a year ago. Week to date, slaughter is estimated at 2.33 million. The CME lean hog index 8/26/2021: down $0.84, $103.62.

MONDAY'S CASH HOG CALL: Steady. Packers are expected to focus on active procurement levels early in the week with the long holiday weekend likely to disrupt plant activity in the coming days.

Friday Midday Livestock Market Update - Hog Markets Create Optimism

GENERAL COMMENTS:

Active buyer support is seen through all nearby lean hog futures contracts with October breaking through the $90 per hundredweight (cwt) threshold once again after posting a $2.57 per cwt rally. The underlying support in all contracts has pushed most hog futures to triple-digit gains. Cattle markets are moving mostly higher as traders back away from previous days' losses, but it appears prices may not be able to move significantly higher through the end of the week. December through June live cattle futures are holding 10- to 25-cent gains, while feeder cattle futures have etched out 40-- to 7 cent gains. Trade is expected to remain sluggish through the remainder of the session. December corn is down 1/4 cent per bushel and December soybean meal is down $2.80 per ton. The Dow Jones Industrial Average is up 217 points.

LIVE CATTLE:

Live cattle futures are mixed in narrow to moderate trading ranges. Lightly traded August futures are seeing the most aggressive pressure, but traders are more focused on the adjustment to cash markets. The rest of the complex is holding narrowly mixed price moves with October and December futures slipping slightly lower, while 2022 contracts have regained limited buyer support. Traders appear to be focused more on position adjustments at the end of the week, rather than any significant market trend shift. This will likely keep prices hovering within the current trading range through the rest of the session. Cash cattle trade remains quiet Friday morning following light to moderate trade Thursday. It is still likely some additional trade will need to be done before the end of the week, which should create some late Friday packer interest. Trade developed Thursday in the South at $123 live basis and $202 dressed basis in Nebraska. These prices are generally $1 per cwt higher than last week's average. Asking prices remain at $124 and higher live and $205 and higher dressed on cattle remaining on showlists. It is uncertain just how much further cash prices will move through the end of the week even if additional trade is seen. 

Friday morning's boxed beef prices are lower in light trade, with choice cuts $1.58 lower at $345.69 and selects down $4.13 at $315.46 on a total count of 41 loads. Dow Jones estimated Friday's cattle slaughter at 113,000 -- down 4,000 from a week ago.

FEEDER CATTLE:

Narrow to moderate gains are holding in feeder cattle futures Friday morning. The overall tone of the complex remains extremely sluggish at the end of the week with traders seemingly trying to adjust positions following the active price pressure earlier in the week. With nearby contracts moving to contract highs early in the week, the recent pullback seems to have brought about the correction that some had expected. This could spark additional buyer support over the near future; but so far, it appears most traders are comfortable holding prices generally steady and may look for further price support early next week. The CME Feeder Index was priced at $158.79 for Aug. 25.

LEAN HOGS:

Lean hog futures have remained the bright spot of the livestock market with October contracts leading the complex higher and posting aggressive $2.50 per cwt gains at midday. This has moved spot-month contracts above $90 per cwt, with the potential to hold these gains into the weekend. Although futures are still below early August highs, current gains have pushed price levels to the highest level in over three weeks, which may initiate additional buyer momentum early next week. All nearby contracts are holding triple-digit gains as traders focus on the potential for additional fundamental support heading into the Labor Day holiday. Cutouts are up $3.19 at $119.59 Friday morning on 214.29 loads. Negotiated hog prices are 0.89 lower with a weighted average price of $92.09 on 4,405 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $102.13 per cwt. Dow Jones estimated Friday's hog slaughter at 467,000 -- 4,000 lower than a week ago, while 10,000 less than year ago levels. The CME Lean Hog Index is estimated at $104.79 for Aug. 25.

Friday Morning Livestock Market Update - Futures May Recover Before Weekend

GENERAL COMMENTS:

Live cattle never really saw the light of day Thursday as futures opened about steady and then spent much of the day in negative territory. The bullishness of the report last Friday has waned with traders seeing declining boxed beef prices as well as limited gains in cash. Cash trade began developing Thursday, but activity was not aggressive. Most cash was about $1 higher, which carries with it some disappointment that higher prices have not been realized. Maybe packers will need to be more aggressive Friday. But, but again, the stage may have been set for the rest of the week, especially with declining futures. Slaughter numbers so far this week are running significantly behind last week and last year. The issue seems not to be tighter cattle supply, but rather ongoing labor shortages as well as mechanical breakdowns. With large margins, packers would want to meet demand with larger numbers, but these issues are ongoing.

Hog futures continue to move in a sideways pattern as prices remain choppy. Traders are uncertain of market direction and continue to trade the sideways pattern. Packers were not aggressive in the cash market Thursday with the National Direct Afternoon report showing price down $1.21. However, cutouts surged $6.16 led by hams increasing $20.19. The nearby October contract is in no hurry to reduce the large price gap between it and the index. Saturday slaughter is estimated at 118,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash cattle have traded $1 higher so far this week with the potential for yet higher trade as feedlots hope to capture some of the packers' margins.	1)	Cattle futures have not been able to hold the large gains after the Cattle on Feed report last Friday. Nearly all the gains have been eliminated in August and October with October nearly closing the chart gap left on Monday's jump.
2)	Cattle futures have fallen the past three days, which should end the liquidation and uncover some support	2)	Cash at $1 higher might be all packers are willing to pay as they see weakening boxed beef and the fallback of futures.
3)	Hogs futures may be building technical support and they continue to trade in a sideways pattern.	3)	Hog futures have been unable to break out of the sideways trading range, building resistance and leaving the market vulnerable for liquidation.
4)	The surge of cutouts Thursday may indicate strengthening demand and pork may possibly gain some market share from beef.	4)	There is no shortage of hogs with packers able to obtain sufficient numbers without being very aggressive.

Thursday Closing Livestock Market Update - Widespread Pressure Seen Across Markets

GENERAL COMMENTS:

Market weakness developed in all livestock futures in late day trade Thursday. A combination of active pressure in financial markets and lack of follow-through buyer support in nearby cattle and hog trade left markets generally unsupported Thursday afternoon. Hog futures were the lower Thursday as firm pressure developed through the complex. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, fell $1.21 with a weighted average of $92.98 on 4,770 head. December corn is down 1 cent per bushel and December soybean meal is up $3.10 per ton. The Dow Jones Industrial Average is down 191 points and NASDAQ is down 96 points.

LIVE CATTLE:

August live cattle futures led the cattle market lower in late day pressure Thursday. This created some additional uncertainty as markets have started to slide lower over the past three days. After setting contract highs in most contracts early in the week, the pullback in prices is somewhat expected but still discouraging. October through February futures posted firm losses, but the potential to keep prices in the top end of the trading range is likely to minimize active further pressure. Cash cattle trade has started to develop in all areas Thursday afternoon. Trade in the South is seen mostly $123 per cwt, which is generally $1 per cwt higher than last week. Trade in the North has been reported at $202 dressed basis and $125 per cwt live basis. This is also generally $1 per cwt higher than last week. Cattle still on showlists are being priced at $125 live and $205 and higher dressed. It is likely that some additional trade will develop before the end of the week, but the biggest question is if prices are essentially set or if late holdouts by feeders will be able to convince packers to dig deeper into their pockets before the weekend break. The special Fed Cattle Exchange Auction Thursday listed a total of 3,731 head, of which 1,387 actually sold and 2,344 head were listed as unsold, as they did not meet the reserve prices that ranged from $122 to $127. Opening prices ranged from $119 to $122, high bids ranged from $122 to $123. The state-by-state breakdown looks like this: Texas 3,470 total head, with 1,387 head sold at $122 to $123 and 2,083 went head unsold; Kansas 72 total head, all of which went unsold; Oklahoma 189 total head, all of which went unsold.

Thursday's slaughter is estimated at 114,000 head, 5,000 less than a week ago and 6,000 head less than a year ago. Week to date totals are listed at 463,000 head, 16,000 less than week ago levels and 9,000 below year ago totals.

Boxed beef prices closed lower: choice down $0.69 ($346.89) and select down $1.21 ($315.69) with a movement of 106 loads (48.58 loads of choice, 27.06 loads of select, 20.77 loads of trim and 9.98 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady to $2 higher. The moderate bounce higher in cash cattle trade from last week Thursday afternoon is starting to spark expectations if further gains can develop Friday.

FEEDER CATTLE:

Despite being able to hold prices generally steady through most of the morning, further pressure developed across the feeder cattle complex. October contacts posted the most aggressive losses of nearby contracts, pulling further away from recent highs as traders steadily back away from the optimism seen after last week's cattle on feed report. Although tight supplies are still expected to be seen through much of the next year, the concern of overall feed prices and beef demand is curbing earlier gains. This could allow for prices to see additional pressure through the end of the month, but a steady to firming market trend is likely to still hold in most contacts. August feeders closed $0.15 higher at $159.45 September feeders closed $0.70 lower at $164.45 and October feeders closed $1.00 lower at $168.27. The CME Feeder Cattle Index for Aug. 25: $158.79, up 0.72.

LEAN HOGS:

Sharp losses developed in lean hog futures Thursday morning as early mixed trade left some feeling that follow-through gains would develop. Most of the pressure developed in afternoon trade as traders seem to be focused on the wide market swings in pork cutout trade after the morning report. The softness in all nearby contracts continues to focus on keeping prices within the confines of a sideways trend, with recent market swings likely to develop across the complex. October lean hogs closed $0.85 lower at $87.90, December lean hogs closed $10.55 lower at $81.40, and February lean hog futures closed $0.47 lower at $83.22. Pork prices surged higher Thursday. Pork cutouts totaled 251.20 loads with 219.19 loads of pork cutouts and 31.01 loads of trim. Pork cutout values: up $6.16, $116.40. Thursday's slaughter is estimated at 474,000 head, 2,000 head above a week ago and down 9,000 from a year ago. Week to date slaughter is estimated at 1.64 million. The CME Lean Hog Index for Aug. 25: down $1.56, $106.34.

FRIDAY'S CASH HOG CALL: Steady. The wild swings back and forth in cash hog prices during the week has created some uncertainty as to further direction in hog prices. Packers continue to focus on active procurement levels, while sellers try to take advantage of the higher future trade.

Thursday Midday Livestock Market Update - Cattle Losses Continue

GENERAL COMMENTS:

Cattle futures continue to shift lower for the third straight trading session. Live cattle contracts are leading the market lower but have bounced off morning lows. August live cattle futures are 72 cents lower, although the underlying weakness in deferred feeder cattle futures is creating some concern that additional softness may develop later in the day and could extend through the end of the month. Hog futures have been able to find market stability during morning trade with all nearby contracts holding 20- to 30-cent gains. This could help spark further buyer interest, but still may not significantly change any fundamental or technical market direction over the near future. December corn is down 1 cent per bushel and December soybean meal is down $2.40 per ton. The Dow Jones Industrial Average is down 36 points.

LIVE CATTLE:

Early pressure in live cattle futures Thursday morning has created uncertainty despite early week gains. August live cattle futures are leading the market lower with 77-cent losses. This has pushed spot prices below $124 per cwt once again. October futures have given back previous gains, now trading under $130 per cwt. It is likely early losses will continue to hold through the rest of the session, although at this point, no significant market shift is likely to develop. Cash cattle markets are still generally quiet, although bids are expected to improve by the end of the day. A few asking prices are seen at $125 and higher live basis in the South and $205 and higher dressed in the North. The special Fed Cattle Exchange Auction on Thursday listed a total of 3,731 head, of which 1,387 actually sold, and 2,344 head were listed as unsold, as they did not meet the reserve prices, that ranged from $122 to $127. Opening prices ranged from $119 to $122, high bids ranged from $122 to $123. The state-by-state breakdown looks like this: Texas 3,470 total head, with 1,387 head sold at $122 to $123, and 2,083 went head unsold; Kansas 72 total head, all of which went unsold; Oklahoma 189 total head, all of which went unsold. 

Thursday morning's boxed beef prices are higher in light trade, with choice cuts $1.23 higher at $347.51 and selects up $3.78 at $315.42 on a total count of 68 loads. Dow Jones estimated Thursday's cattle slaughter at 121,000, steady with a week ago.

FEEDER CATTLE:

Feeder cattle futures are sliding lower with moderate to firm pressure in nearby contacts. The overall softness in live cattle trade is creating some additional concerns. Although corn prices have eased slightly through morning trade, the inability to hang onto recent lower feed prices is adding some concern that additional pressure may develop in the feeder cattle trade, especially early 2022 contract months. The CME Feeder Index was priced at $158.07 for Aug. 24.

LEAN HOGS:

Lean hog futures continue to show very little long-term support Thursday morning, but the potential to hold onto midweek gains is impressive given the overall weakness in most commodity markets during morning trade. October through February futures are all holding 25-cent gains, as limited interest has held following early buyer activity. Weekly export sales are reported at 24,100 metric tons (mt) with shipments at 29,900 mt. China posted limited sales and shipments during the last week, which is somewhat disappointing to the market in general. Cutouts are up $0.9.05 at $119.29 Thursday morning on 125.37 loads. Negotiated hog prices are 0.77 lower per cwt lower with a weighted average price of $93.42 per cwt on 4,999 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $102.07 per cwt. Dow Jones estimated Thursday's hog slaughter at 476,000, steady with a week ago, while 6,000 less than year ago levels. The CME Lean Hog Index is estimated at $104.79 for Aug. 25.

Thursday Morning Livestock Market Update - Futures Remain Choppy

GENERAL COMMENTS:

Boxed beef prices seem to have run out of upward momentum as much of the demand for Labor Day has been filled and some demand may have been destroyed due to the rapid rise. Choice cuts declined $0.69 with select cuts down $1.21. This put pressure on cattle futures Wednesday even though the cash market was not thoroughly tested. The anticipation is for cash to move $2 higher this week as cash trade is being pushed to the latter half of the week. Smaller showlists in Texas and Kansas may provide feedlots more leverage. Feeder cattle were under pressure as a result of the pressure on live cattle as well as higher grain prices. Thursday is the last trading day for August feeder cattle.

Hog futures have been riding a roller coaster over the past two weeks. This leaves the market searching for direction, keeping it sideways. Cash has been similar in its movement with price on the National Direct Afternoon report down $0.71. The October contract seems to not want to stray very far from the chart gap remaining above, but still has not been able to garner sufficient buying interest to close the gap. Cutout prices continue to suffer, keeping a leash on upside futures potential. Saturday hog slaughter is estimated at 118,000 head. Higher Saturday slaughter seems to be the result of lower slaughter numbers Monday. What was not able to be accomplished during the week due to mechanical breakdowns and labor issues is planned to be compensated for. Weekly export sales will need to be good to provide support.

	BULL SIDE		BEAR SIDE
1)	Smaller showlists may indicate fewer market-ready cattle. Packers may need to increase bids to obtain the desired supply.	1)	Declining boxed beef prices are putting some pressure on futures as that may cause packers to limit what they will pay for cattle.
2)	Tighter cattle supply in the future is being reflected by the premiums being maintained in futures with April futures $18.00 above nearby August.	2)	The huge breakout on Monday as a reaction to the Cattle on Feed report may have been a false breakout. A significant amount of the gain has been eliminated.
3)	Lighter hog weights mean more need to be processed to obtain the required tonnage to meet demand. Hog marketings seem to be current.	3)	Pork cutouts just cannot seem to find solid support, leaving limited potential for cash and futures.
4)	October futures have a chart gap over a dollar higher that will be filled at some point.	4)	Hog supplies continue to be sufficient for demand with packers able to obtain what they need with limited difficulty.

Wednesday Closing Livestock Market Update - Support in Hog Futures Adds Support to Trade

GENERAL COMMENTS:

Strong pressure in cattle trade midweek created uncertainty as prices backed away from contract highs set early in the week. Live cattle futures led the market lower with triple-digit losses seen in all remaining 2021 contract months. Feeder cattle futures seemed to follow the market lower, but higher corn prices also had a significant part in the pullback of feeder cattle trade. Hog futures were the bright spot of the session, with strong gains returning to nearby contracts. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, fell $0.71 with a weighted average of $96.10 on 6,677 head. December corn is up 6 3/4 cents per bushel and December soybean meal is down $2.90 per ton. The Dow Jones Industrial Average is up 30 points and NASDAQ is up 22 points.

LIVE CATTLE:

Triple-digit losses in nearby contracts left the live cattle market generally unsupported in late day trade. At points during the session it appeared that buyers may start to slowly move into the market to help recover from early losses, but in the end, sharp losses were seen in all 2021 contract months. The focus on tighter supplies in early 2022 helped bring stability to deferred futures, but this was not enough to keep the general trend positive midweek. August live cattle closed $1.35 lower at $124.42, October live cattle closed $1.40 lower at $130.30 and December live cattle closed $1.12 lower at $136.27. Cash cattle markets were generally quiet Wednesday afternoon with only a handful of trade seen in several areas. At this point, there doesn't seem to be enough trade to establish a good market trend. This will put the emphasis on Thursday trade activity with the expectation that feeders will still look for higher prices by the end of the week. The Fed Cattle Exchange Auction today listed a total of 4,676 head, of which 578 actually sold, 445 were scratched from the auction and 3,653 head were listed as unsold, as they did not meet the reserve prices that ranged from $118 to $127. Opening prices ranged from $118 to $121.75, high bids ranged from $118.00 $122.25. The state-by-state breakdown looks like this: Texas 4,415 total head, with 578 head sold at $118 to $122, 3,392 head went unsold and 445 were scratched from the auction; Kansas 72 total head, all of which went unsold; Oklahoma 189 total head, all of which went unsold.

Wednesday's slaughter is estimated at 11,000 head, 3,000 less than a week ago and 1,000 head more than a year ago. Week to date totals are listed at 353,000 head, 14,000 less than week ago levels and 1,000 ahead year ago totals.

Boxed beef prices closed lower: choice down $0.69 ($346.89) and select down $1.21 ($315.69) with a movement of 106 loads (48.58 loads of choice, 27.06 loads of select, 20.77 loads of trim and 9.98 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady to $2 higher. Cash cattle interest remains generally quiet with only a handful of sales reported. Given the recent support in futures trade and beef values feeders aggressively pricing cattle through the entire week. Most trade is likely to develop either late Thursday or early Friday.

FEEDER CATTLE:

Firm pressure developed in feeder cattle trade as traders quickly focused on the building pressure in live cattle and gains in corn prices. This is not enough to change the overall trend of the market, but the pullback from early week gains is still disappointing and could lead to additional volatility through the upcoming days. August feeders closed $0.72 higher at $159.30 September feeders closed $0.62 lower at $165.15 and October feeders closed $0.95 lower at $169.27. The CME Feeder Cattle Index for Aug. 24: $158.07, up 1.37.

LEAN HOGS:

Active gains have stepped back into the lean hog complex with traders looking for the potential of further support late in the week. This could add further fundamental support, although technical buying will still be limited as nearby contracts are range bound by the current sideways market trend. October lean hogs closed $1.77 higher at $88.75, December lean hogs closed $1.17 higher at $81.95, and February lean hog futures closed $0.77 higher at $83.70. Pork prices stabilized midweek. Pork cutouts totaled 397.20 loads with 358.19 loads of pork cutouts and 39.01 loads of trim. Pork cutout values: down $0.77, $110.24. Wednesday's slaughter is estimated at 474,000 head, 2,000 head above a week ago and down 9,000 from a year ago. Week to date slaughter is estimated at 1.24 million. The CME Lean Hog Index for Aug. 24: down $1.56, $106.34.

THURSDAY'S CASH HOG CALL: Steady. The wild swings back and forth in cash hog prices has created some uncertainty as to further direction in hog prices. Packers continue to focus on active procurement levels, while sellers try to take advantage of the higher future trade.

Wednesday Midday Livestock Market Summary - Limited Direction at Midweek Across Trade

GENERAL COMMENTS:

Mixed trade is scattered through livestock futures Wednesday morning with traders focusing on adjusting market prices following the wide market swings of the last week. Nearby live cattle trade and most feeder cattle futures are showing softness, although limited volume is likely to add to further morning pressure in most contracts. October lean hog futures are posting firm gains of $1 per cwt, driven by buyers slowly but steadily moving back into nearby contracts. Although concern remains that volatility in meat values could limit additional buying during the last half of the week. December corn is up 8 cents per bushel and December soybean meal is down $1.40 per ton. The Dow Jones Industrial Average is up 132 points.

LIVE CATTLE:

Live cattle futures have been generally weak Wednesday morning. August through December contracts posted losses with October futures pulling back from recent highs with a $1 per hundredweight (cwt) loss. The downward pressure in the futures is still not concerning, given the fact that prices have been at or near contract highs through the first half of the week. Moderate positioning is likely to still develop over the next couple of days as traders continue to focus on tighter long-term support for the beef market. Cash cattle activity remains generally quiet at midweek with bids still unavailable. The focus will likely be on additional activity later in the week, but a few deals could start to trickle into the market at the end of the day. A few asking prices are seen at $125 and higher live basis in the South and $205 and higher dressed in the North. The Fed Cattle Exchange Auction on Wednesday listed a total of 4,676 head and 578 head sold; 445 were scratched from the auction; and 3,653 head were listed as unsold, as they did not meet the reserve prices, that ranged from $118 to $127. Opening prices ranged from $118 to $121.75, high bids ranged from $118.00 $122.25. The state-by-state breakdown looks like this: Texas 4,415 total head, with 578 head sold at $118 to $122, 3,392 head went unsold and 445 were scratched from the auction; Kansas 72 total head, all of which went unsold; Oklahoma 189 total head, all of which went unsold. 

Wednesday morning's boxed beef prices are lower in light trade, with choice cuts $0.07 lower at $347.51 and selects down $1.48 at $315.42 on a total count of 68 loads. Dow Jones estimated Wednesday's cattle slaughter at 121,000, steady with a week ago.

FEEDER CATTLE:

Back and forth price shifts have been seen all Wednesday morning. The stronger corn market price added early softness to feeder cattle futures, although buyers quickly stepped back into the complex as traders are still trying to fine tune market shifts following last week's Cattle on Feed report. Most contracts are holding light to moderate gains at midday with traders focusing on growing longer-term demand in the feeder cattle complex. The CME Feeder Index was priced at $156.60 for Aug. 23.

LEAN HOGS:

Active gains have rebounded in lean hog futures Wednesday morning with October and December futures holding triple-digit gains at midday. October futures are $1.40 per cwt higher, but the underlying support in the complex could help to draw limited but supportive price moves through the rest of the day. Prices still remain well restricted within the sideways market range, which may lead to additional price moves without a significant change in market direction through the rest of the month. Pork primals are much more stable at midweek but could see more movement in Wednesday afternoon's report. Cutouts are down $0.39 at $113.23 Wednesday morning on 236.37 loads. Negotiated hog prices are 2.53 higher per cwt lower with a weighted average price of $94.19 per cwt on 4,999 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $102.07 per cwt. Dow Jones estimated Wednesday's hog slaughter at 474,000 -- 1,000 below a week ago, while 6,000 less than year ago levels. The CME Lean Hog Index is estimated at $106.34 for Aug. 24.

Wednesday Morning Livestock Market Update - Uncertain Demand Impacts Futures

GENERAL COMMENTS:

After live cattle futures made new highs Tuesday selling pressure got the upper hand, moving prices back down and both August and October ended with losses. It seemed to be a matter of the market overreacting to the Cattle of Feed report with buying interest running its course. Later contracts closed higher with the anticipation of tighter cattle supplies down the road and the desire to add premium to deferred contracts. Boxed beef prices declined after a multiple week surge of prices. Choice cuts were down $0.45 with select cuts down $2.50. This could be the turn in trend that had been anticipated as Labor Day draws closer. Some asking prices surfaced Tuesday higher than last week's trade, but no bids from packers. Even though boxed beef prices had been surging and cattle supplies may tighten, weakness of boxed beef may limit packer willingness to pay higher. Feeder cattle came under pressure as a reaction to stronger grain prices.

Hog futures could not find its legs Tuesday. Prices tried to hold but saw steady pressure as the day progressed. Traders seemed more focused on further weakness of cutouts rather than on the rise of cash. The National Direct Afternoon report showed price jumping $4.14. Cutouts declined $2.25, turning traders more negative as the bottom in cutouts still remains elusive. Cash prices can fluctuate on a daily basis depending on whether packers need to purchase more aggressively one day versus another day. But cutouts are where the rubber meets the road as an indication of consumer demand.

	BULL SIDE		BEAR SIDE
1)	New contract highs were made in live cattle futures Tuesday, indicating the higher trend may continue.	1)	Cattle may have factored in a tighter market down the road with little room for further upside due to the significant premiums already contained in later contracts.
2)	Higher futures this week will give feedlots the confidence to hold for higher cash even though boxed beef may begin to show weakness. Packers can easily pay more for cattle.	2)	Potentially higher grain prices could increase pressure on the market as feedlots do not want to hold cattle longer than they need to.
3)	Packers were more aggressive purchasing hogs in the country Tuesday. They may see stronger consumer demand returning after Labor Day.	3)	The short-term trend seems to have turned down again as cutouts continue to struggle.
4)	October maintains a historically large discount to the index. The current spread is twice as wide as the five-year average for this time of year. There is plenty of time for prices to converge.	4)	Hog supplies are sufficient in the country, leaving packers less aggressive overall.

Tuesday Closing Livestock Market Update - Late Day Weakness Evident in Cattle Futures

GENERAL COMMENTS:

Early buyer support q ran out of gas in the last hour of trade Tuesday with nearby live cattle futures holding light to moderate losses, while most feeder cattle futures retracted a significant portion of Monday's gains. Higher grain prices were increasingly obvious, but traders also took a deeper look at price shifts, as the emotion from Friday's cattle on feed report has finally caused traders to remain more objective. Hog futures led the complex lower with triple-digit price reductions seen in February through October 2022 contract months. The concern of further pressure in pork values led to the weaker market shift. Hog prices surged higher on the National Direct Afternoon Hog Report in moderate trade, up $4.14 with a weighted average of $96.82 on 6,677 head. December corn is up 9 3/4 cents per bushel and December soybean meal is up $8 per ton. The Dow Jones Industrial Average is up 30 points and NASDAQ is up 77 points.

LIVE CATTLE:

Live cattle futures closed mixed in light to moderate late day trade Tuesday. The concern that higher feed prices are starting to redevelop, combined with nearby traders questioning the previous aggressive market rally led to August and October futures slipping lower in the last hour of trade. December through August 2022 contracts still held moderate gains with traders focusing on the tightening beef supply situation, which is likely to be seen over the next year or longer. December contracts continued to post new contract highs, as traders have added over $4 per cwt to the contract price over the last three trading sessions. August live cattle closed $0.65 lower at $125.80, October live cattle closed $0.25 lower at $131.70 and December live cattle closed $0.57 higher at $137.40. Cash cattle trade remains quiet with bids undeveloped through Tuesday afternoon. This is not unusual, but some packer inquiry should start to be seen sometime Wednesday. Feeders have floated asking prices of $125 and higher live basis in the South and $202 and higher in the North on a dressed basis. The recent support in futures trade is giving the expectation that feeders will be very disappointed with anything less than moderate weekly cash market gains. The bulk of business may still be pushed off until Thursday or Friday.

Tuesday's slaughter is estimated at 120,000 head, 1,000 more than a week ago and 1,000 head more than a year ago. Week to date totals are listed at 236,000 head, 14,000 less than week ago levels and 1,000 ahead year ago totals.

Boxed beef prices closed lower: choice down $0.45 ($347.58) and select down $2.50 ($316.90) with a movement of 106 loads (48.58 loads of choice, 27.06 loads of select, 20.77 loads of trim and 9.98 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady to $2 higher. Cash cattle interest remains quiet heading into midweek, but the combination of still strong beef values and the surge in futures prices will likely keep feeders aggressively pricing cattle through the entire week. Most trade is likely to develop either late Thursday or early Friday.

FEEDER CATTLE:

Late day price weakness trickled into cattle trade, led by a strong push in September feeder cattle futures. Although October contracts, which led the market higher Monday, are still able to hold most of the previous gains. September contracts gave back nearly all of Monday's triple-digit rally. The surge in grain prices is one of the reasons for increased underlying support through the entire complex as all but August futures closed lower despite holding moderate support early in the session. August feeders closed $0.37 higher at $158.57 September feeders closed $1.52 lower at $165.77 and October feeders closed $0.45 lower at $170.22. Cash feeder cattle prices remain mixed when compared to week ago price levels. The weekly national feeder cattle summary posted prices in a choppy pattern, generally $1 lower to $2 per cwt lower. Overall demand for cattle, especially lighter weight cattle, remains strong. But drought conditions in many areas have seen cattle forced off grass a good two to three months earlier than in other years. This increase in overall supply is one of the main reasons pressuring price levels. The CME Feeder Cattle Index for Aug. 20: unavailable due to submission delays.

LEAN HOGS:

Firm follow-through pressure quickly developed in lean hog futures trade Tuesday morning. The early week softness in pork and cash hog values, combined with reduced early week packer activity, has created concerns that the market may remain hard pressed to keep current in the near term. This has pushed December contracts below $81 per cwt once again, although this is still nearly $3 per cwt above August lows. The potential for lean hog futures to bounce around within a moderate trading range, but still unable to break out of recent price patterns, could leave mixed signals over the coming weeks. The most aggressive pressure developed in 2022 contracts, causing some underlying concern about the ability to maintain and strengthen overall pork demand through the upcoming year. October lean hogs closed $0.50 lower at $86.97, December lean hogs closed $0.62 lower at $80.77, and February lean hog futures closed $1.15 lower at $82.92. Pork prices slid lower led by belly cuts, which fell $14.88 per cwt Tuesday. Pork cutouts totaled 397.20 loads with 358.19 loads of pork cutouts and 39.01 loads of trim. Pork cutout values: down $2.25, $111.01. Tuesday's slaughter is estimated at 474,000 head, 2,000 head above a week ago and down 9,000 from a year ago. Week to date slaughter is estimated at 911,000 which is 38,000 below week ago levels, while 42,000 less than year ago totals. The CME Lean Hog Index for Aug. 23: unavailable due to packer submission issues.

WEDNESDAY'S CASH HOG CALL: Steady to $1 lower. Early week weakness in Monday mornings cash hog and pork cutout report could add further softness to packer bids Tuesday. Although there is not expected to be aggressive market shifts in either procurement levels or changes in short-term supplies, packers may be able to minimize spending during the first half of the week.

Tuesday Midday Livestock Market Update - Cattle Market Gains Continue

GENERAL COMMENTS:

Livestock trade has broken away from the wild (triple-digit) price swings seen over the past couple of days, posting limited market shifts Tuesday morning. Narrow to moderate gains are still developing in nearby live cattle and feeder cattle futures; these gains are still able to notch new contract highs in most nearby months. Hog futures have posted uniform losses as traders remain concerned following Monday's aggressive pressure in pork values and cash hog prices. The underlying softness in the market is likely to limit short-term support but is still expected to hold the sideways pattern seen over the last couple of weeks. December corn is up 7 3/4 cents per bushel and December soybean meal is up $7 per ton. The Dow Jones Industrial Average is up 45 points.

LIVE CATTLE

Firm follow-through support is seen in all live cattle futures with the bulk in December and February contracts. Underlying support continues through the entire market following aggressive triple-digit gains Monday. The focus on live cattle futures continues to be based on lower-than-expected cattle on feed numbers, but the drop in placement levels in July is finally sparking some interest in 1st and 2nd quarter 2022 contracts with February and April futures trading above $140 per hundredweight (cwt). The firmness in boxed beef values continues to keep traders interested, although many still fear an aggressive beef market pullback once Labor Day buying has finished. Cash cattle activity remains generally quiet with bids yet to be well established in all areas of cattle country. A few asking prices are starting to surface with cattle priced at $125 and higher live basis in the South and $202 and higher dressed in the North. Although there may be some limited trades trickling into the market over the next two days, it is expected most trade will be pushed into Thursday with feeders likely to hold out for higher money given the underlying support in beef values and futures trade. 

Tuesday morning's boxed beef prices are steady to lower in light trade, with choice cuts steady at $348.03 and selects down $1.57 at $317.83 on a total count of 69 loads. Following consistently sharp gains over the last two weeks, this shift lower is creating some uncertainty in the market. But with current price levels, moderate corrections are expected. Dow Jones estimated Tuesday's cattle slaughter at 121,000, steady with a week ago.

FEEDER CATTLE:

Early gains in feeder cattle futures brought follow-through buyer support after Monday's aggressive triple-digit gains. Although the underlying tone in the market remains firm, midday buyer support has slowed, allowing traders to adjust positions. This has pulled back from early gains with prices mixed to moderately lower. The strong rally in grain trade is starting to have an impact on feeder cattle futures buying, especially in deferred months. Even with the narrow market pullback seen at midday, the feeder cattle futures remain at or near contract highs set Monday, with very little expectations of aggressive losses to develop in the near term. But some traders do feel the aggressive two-day rally surrounding the Cattle on Feed report was overly aggressive and these current moves may be bringing a sense of longer-term reality to the complex. Feeder cattle sold at the Oklahoma City sale were mixed in moderate to good demand. Overall average steers sold for $4 to $7 per cwt lower, while feeder heifers brought $3 to $6 per cwt higher than the previous week. Demand is expected to remain firm, although upcoming cash sales support will likely be heavily impacted by the aggressive support in futures trade, which could fuel higher prices over the upcoming days. The CME Feeder Index was priced at $155.73 for Aug. 20.

LEAN HOGS:

Firm pressure is seen in lean hog futures following early week softness in pork cuts and cash hog values. The majority of market weakness is in February through June contracts, as traders remain focused on the direction of long-term pork demand. A combination of domestic and export market demand for pork will continue to play a significant role in the ability to drive prices higher through early 2022. Lean hog futures remain extremely comfortable within the current market range and could continue to shift higher and lower within this price gap over the upcoming days and weeks. Pork primals are mixed once again, although the wide price shifts could create additional volatility through the week. Cutouts are up $0.32 at $113.58 Tuesday morning on 236.37 loads. Negotiated hog prices are 0.81 lower per cwt lower with a weighted average price of $91.66 per cwt on 2,907 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $103.81 per cwt. Dow Jones estimated Tuesday's hog slaughter at 477,000 -- 1,000 below a week ago, while 6,000 less than year ago levels. The CME Lean Hog Index is estimated at $107.90 for Aug. 20.

Tuesday Morning Livestock Market Update - Cattle Futures May Pause

GENERAL COMMENTS:

Both live and feeder cattle found strong support from the Cattle on Feed report with all contracts making new highs Monday. The exception was August feeder cattle as it will cease trading Thursday and is moving in close relationship with the index. There was no cash news Monday as usual, but when offers are posted by feedlots, they are expected to be higher and firm. The surge of futures and the prospect for tightening supplies will give feedlots the confidence to hold. Packers will be forced to bid higher to obtain needed cattle to keep plants running at desired levels. Boxed beef continued to increase with choice cuts up $2.97 and select cuts up $0.87. The July Cold Storage report showed beef inventory at 401.3 million pounds, slightly lower than June, but 9% below a year ago. The Commitment of Traders report showed funds as net buyers of 1,961 contracts, increasing their net-long positions to 70,773 contracts.

Hog futures were initially higher Monday, from the strong support seen in cattle, but that spillover support waned in a short period of time as traders looked at the fundamentals. The National Direct Afternoon report showed price falling $3.72. Cutouts fell substantially, posting a loss of $6.00. This put most of the pressure on the nearby October contract which fell $1.15. The rest of the complex pondered the prospects for cash in the long-term, finding no real direction. Pork in cold storage totaled 443.1 million pounds. This was slightly higher than June, but 6% lower than a year ago. There was a decline in belly stocks of 24% from June with current supply down 35% from a year ago. The Commitment of Traders report showed funds as net buyers of 166 contracts, bringing their net longs to 77,020 contracts.

	BULL SIDE		BEAR SIDE
1)	Cattle futures broke out to the upside, breaking a streak of sideways trading since early June.	1)	The breakout of cattle Monday may have been fueled by short-covering and a knee-jerk reaction to the Cattle on Feed report. The large increase may not hold.
2)	The prospect is for tightening cattle supply as the year progresses, which should bring packers to the table more aggressively.	2)	Boxed beef prices may be showing signs of slowing as strong demand in preparation for Labor Day may have about run its course.
3)	October hog futures fell back but remained in their recent sideways trading range.	3)	The weakness of pork cutouts will keep packers less aggressive buyers in the country.
4)	The chart gap in October remains above the market and will be a target for technical traders if underlying fundamentals turn more positive.	4)	Hog futures seem to be settling into a sideways trading range at best for the time being.

Monday Closing Livestock Market Update - Cattle Futures Surge Higher Following Cattle on Feed Report

GENERAL COMMENTS:

Cattle traders quickly picked up Monday where they left off Friday afternoon as the Cattle on Feed report confirmed the lower placements and on feed numbers expected before the report. Nearby live cattle and feeder cattle futures set new contract highs Monday; traders continued to focus on potential support based on short- and long-term beef supply levels. Hog futures struggled during the last half of the trading session. Although early support trickled into the hog complex from the cattle market, weaker morning reports dashed any bullish market tone, causing contracts to close mixed in narrow to moderate trading ranges. Hog prices closed lower on the National Direct Afternoon Hog Report in moderate trade, down $3.72 with a weighted average of $92.68 on 6,398 head. December corn is down 1 1/2 cent per bushel and December soybean meal is down $7.20 per ton. The Dow Jones Industrial Average is up 215 points and NASDAQ is up 227 points.

LIVE CATTLE:

Aggressive gains flooded into live cattle futures Monday. Although traders were unable to hold session highs at the close, nearby contracts still posted new contract highs in several months. The above $131 per cwt in October not only helped spark follow-through buyer support, but the ability to string two strong positive closes in consecutive sessions has quickly changed the mentality of the cattle market. It is uncertain if active buyer support will redevelop before traders see the need to take profits; but upward market support is possible given tighter on feed supplies. Beef in cold storage is fractionally changed from month ago levels, listed still at 100% of June's level. This is not likely to spark active support, but it is not discouraging either. August live cattle closed $2.17 higher at $126.45, October live cattle closed $2.90 higher at $131.95 and December live cattle closed $2.30 higher at $136.82. Cash cattle markets are untested and quiet Monday afternoon with bids and asking prices still not widely available. It is expected that when asking prices are seen, they will be significantly firmer given the support in beef and futures prices. But it is uncertain just how active packers will be over the next couple weeks. With Labor Day weekend quickly approaching, the focus on September procurement needs is starting to take shape.

Friday's slaughter is estimated at 116,000 head -- steady with a week ago and 1,000 head less than a year ago. Week-to-date totals are listed at 595,000 head -- 13,000 more than week ago levels and 9,000 ahead year ago totals.

Boxed beef prices closed higher: choice up $2.97 ($348.03) and select up $0.87 ($319.40) with a movement of 83 loads (39.99 loads of choice, 15.54 loads of select, 10.64 loads of trim and 16.59 loads of ground beef).

TUESDAY'S CASH CATTLE CALL:

Steady. Cash market interest remains dead Monday and will likely see very little interest from either side right away Tuesday morning. Asking prices will likely firm significantly through the week.

FEEDER CATTLE:

Active triple-digit gains in feeder cattle futures helped to drive additional support through the complex. Although August contracts were lightly traded and closed lower, this is not unexpected as August feeder prices are starting to adjust to the CME index price. The ability to push September and October contracts to new contract highs, with October futures moving above $170 per cwt, continues to draw buyers back into the complex. Traders look at lower-than-expected placement numbers in July as continued support for tighter supplies not only in nearby but deferred contracts. This will continue to showcase the lighter calf crop well into next year, hopefully sparking even more support over the coming days and weeks. August feeders closed $0.82 lower at $158.20 September feeders closed $1.80 higher at $167.30 and October feeders closed $3.05 higher at $170.67. The CME Feeder Cattle Index 8/20/2021: down $0.06, $155.73.

LEAN HOGS:

October lean hog futures took the brunt of market pressure Monday with triple-digit losses limited to the spot month. The rest of the complex remains much more subdued with prices hovering from 30 cents lower to 35 cents higher. Strong buying in cattle seems to be helping drive additional support to deferred contract months, although the underlying weakness in nearby futures was the main focus of most traders and attributed to the majority of trade volume. July's Cold Storage report released Monday afternoon will likely create even more uncertainty through the hog complex. This may not cause directional changes but could create increased price volatility within the current but sideways trading pattern. Total pork supplies were essentially unchanged, at 100% of last month's levels. Pork in cold storage is 4% below year ago levels, but this is to be expected given the challenges seen in 2020. The biggest challenge will be how traders asses pork cut changes with belly stocks falling 24% from June levels, while bone-in hams increased 23%. This could add further price shift to cuts over the next couple of weeks. October lean hogs closed $1.15 lower at $87.47, December lean hogs closed $0.30 lower at $81.40, and February lean hog futures closed $0.02 lower at $84.07. Pork prices tumbled lower in active pressure in ham and belly cuts. Pork cutouts totaled 365.04 loads with 336.17 loads of pork cutouts and 28.87 loads of trim. Pork cutout values: down $6.00, $113.26. Monday's slaughter is estimated at 456,000 head -- 19,000 head below a week ago and down 14,000 from a year ago. The CME Lean Hog Index 8/20/2021: up $0.34, $107.90.

TUESDAY'S CASH HOG CALL:

Steady to $1 lower. Early weakness in Monday morning's cash hog and pork cutout reports could add further softness to packer bids Tuesday. Although aggressive market shifts are not expected in either procurement levels or changes in short-term supplies, packers may be able to minimize spending during the first half of the week.