GENERAL COMMENTS:
From Friday to Friday, livestock futures scored the following changes: Aug live cattle off $0.25, Oct live cattle up $0.25, Aug feeder cattle off $1.80, Sep feeder cattle off $0.25, Aug lean hogs up $1.05 and Oct lean hogs off $1.07.
Sharp gains quickly redeveloped in boxed beef and pork cutout values Friday afternoon with choice boxed beef moving to $324 per cwt, while pork cutouts rallied $6.31 per cwt to $125.68. Choice boxed beef prices have rallied $58 per cwt since the middle of July and seem to show no sign of slowing at this point. But futures traders seem to be discounting these price shifts, as limited contracts adjusted in narrow-to-moderate ranges with very little sense of market direction. This could further add to market uncertainty next week in both cattle and hog futures. Hog prices closed lower on the National Direct Afternoon Hog Report in light trade, down $2.15 with a weighted average of 97.97 on 3,343 head. December corn is down 1/4 cent per bushel, and December soybean meal is up $1.90 per ton. The Dow Jones Industrial Average is up 16 points, and the NASDAQ is up 6 points.
LIVE CATTLE:
Light-to-moderate losses slowly trickled into nearby live cattle futures Friday afternoon with August and October contracts shouldering the brunt of any market pressure. The continued support in beef values seemed to have limited support to deferred contracts, although lackluster cash interest and futures prices remaining entrenched in a sideways trend kept most traders from becoming overly aggressive at the end of the week. August live cattle closed $0.40 lower at $122.75, October live cattle closed $0.37 lower at $128.12, and December live cattle closed $0.12 lower at $133.82. Cash cattle markets remain dead silent through the afternoon Friday with bids undeveloped and may not be seen until next week. Asking prices on cattle still left on showlists remain at $123 and higher in the South and $200 and higher in the North. It was expected that more trade would be needed in the negotiated arena for packers to remain comfortable going into next week. But feeders are unwilling to budge on asking prices through the end of the week and remain comfortable carrying cattle into the next couple of weeks. Cooler weather is expected in the coming days in several areas, allowing feeders to be more confident to carry heavier cattle from week to week. Cash cattle trade for the week is seen at mostly $121 in the South and $198 in the North, fully steady with last week.
Friday's slaughter is estimated at 119,000 head -- 6,000 more than a week ago and 6,000 head more than a year ago. Saturday estimated slaughter is expected at 58,000 head, 10,000 head above last week's levels. Weekly total cattle slaughter including Saturday's schedule is listed at 639,000 head, 2,000 under week ago levels.
Boxed beef prices closed sharply higher: choice up $6.90 ($324.83) and select up $7.71 ($298.02) with a movement of 91 loads (47.95 loads of choice, 18.42 loads of select, 12.16 loads of trim and 12.16 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Cash market interest Monday is expected to remain muted following the light-to-moderate trade at generally steady prices through this last week. Although feeders are looking for higher prices as August progresses, the current availability of cattle and lackluster interest by packers could make this hard to accomplish.
FEEDER CATTLE:
Feeder cattle futures remained mixed in limited trade volume although, by the end of the day, it became obvious that trade interest settled in a nearby- versus deferred-contract battle. Moderate-to-firm losses developed in the August and September contracts, while buyers slowly stepped into early 2022 contracts as the session continued. The focus on building even more premium into winter and spring placements appeared to gain traction as traders continue to focus on tightening supplies of feeder cattle through next year. The inability for corn markets to either add to or retract Thursday's aggressive gains caused some uncertainty in feeder cattle trade at the end of the week. August feeders closed $0.65 lower at $158.05, September feeders closed $0.47 lower at $163.07 and October feeders closed $0.15 lower at $165.77. The CME feeder cattle index 8/12/2021: down $0.42, $155.83.
LEAN HOGS:
August lean hog futures go off the board at the end of the day with essentially most of the Friday trade focused on adjusting prices to settlement levels. Lean hog contracts cash settle to the CME index price, leaving the spot-month market lightly traded and having very little relevance to the longer-term market trend. October futures will take over as the lead-month contract Monday, but the October futures contract is currently discounted to the August to the tune of $23 per cwt. These contracts are already the focus of cash values, but the shift could have a significant impact on cash values over the next couple of weeks. Limited movement in the October and December contracts at the end of the week left most traders willing to wait to see how pork values adjust next week, as many remain comfortable with current positions. August lean hogs closed $0.32 lower at $109.80, October lean hogs closed $0.05 higher at $86.52, and December lean hogs closed $0.27 higher at $80.17. Pork prices surged higher following wide swings in the ham market once again. Ham cuts rallied $22.70 per cwt Friday, adding aggressive support to overall carcass values. Pork cutouts totaled 379.61 loads with 341.89 loads of pork cutouts and 37.72 loads of trim. Pork cutout values: up $6.31, $125.68. Friday's slaughter is estimated at 471,000 head -- 22,000 head above a week ago and 3,000 head above than year ago. Saturday runs are expected at 77,000 head. Week-to-date hog slaughter is reported at 2.33 million head, 72,000 head above last week's levels. The CME lean hog index 8/12/2021: down $0.29, $109.90.
MONDAY'S CASH HOG CALL: Steady. Packers are expected to return to the market Monday as they focus on another normal but active week of procurement. Given the recent shifts in futures and pork prices, cash bids are expected to remain steady to firm through the first part of the week, although it is likely that packers will be able to source needed hogs without significant early week efforts.
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