GENERAL COMMENTS:
Cattle on feed numbers are listed at 11.07 million head at the end of July. This is the smallest on feed count since the end of August 2020. Total on feed numbers fell 2% from year ago levels, well within pre-report expectations. Late-day buying quickly developed in all livestock contracts Friday with cattle traders adjusting positions in front of the report. This pushed September contracts $2.60 per cwt higher at the closing bell. Hog prices closed lower on the National Direct Afternoon Hog Report in moderate trade, down $2.40 with a weighted average of $96.40 on 5,402 head. December corn is down 13 3/4 cent per bushel and December soybean meal is up $1.30 per ton. The Dow Jones Industrial Average is up 225 points and NASDAQ is up 172 points.
LIVE CATTLE:
Live cattle futures firmed in late-day trade after spending most of the session mixed. The underlying support in feeder cattle and hog futures helped bring buyers back to the table just before the closing bell. Cattle on feed numbers came in as expected with a total of 11.07 million head on feed at the end of last month. This is not expected to lead to significant market shifts early next week; but it could add to market volatility already seen in the complex. August live cattle closed $0.87 higher at $124.27, October live cattle closed $0.90 higher at $129.05 and December live cattle closed $0.55 higher at $134.52. Cash cattle activity remained sluggish through most of the day, with just a little clean-up trade in the South. Prices are $121 to $122 per cwt, steady to $1 per higher than last week's average. Most Northern deals are listed at $200 per cwt, steady with the rest of the week.
Friday's slaughter is estimated at 116,000 head -- even 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 a week ago and 9,000 more than a year ago totals.
Boxed beef prices closed higher: choice up $3.43 ($345.06) and select up $2.12 ($318.53) with a movement of 85 loads (44.77 loads of choice, 11.08 loads of select, 15.49 loads of trim and 13.7 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Early week cash cattle trade is expected to remain extremely sluggish, with traders focusing on futures market direction as they work through the Cattle on Feed report. Cash market interest may not be seen until midweek or later.
FEEDER CATTLE:
Feeder cattle futures posted the most aggressive support at the end of the day. Although most of the session saw very limited activity, buyer interest flooded the market in the last hour of trade as traders anticipated lower-than-expected placement levels on the Cattle on Feed report. September contracts led the complex higher with gains over $2 per cwt. Total placements of feeder cattle in July were moderately under expected levels, creating moderate bullishness likely to be seen in the market next week. The big question is: Was the late-day rally was enough to account for the smaller placement levels? This will still have to be seen at opening bell Monday morning. August feeders closed $0.75 higher at $159.02 September feeders closed $2.60 higher at $165.50 and October feeders closed $2.15 higher at $167.62. The CME Feeder Cattle Index 8/18/2021: up $0.18, $155.42.
LEAN HOGS:
Sharp gains seen through the entire session Friday led to increased underlying support across all lean hog contracts. Trade remained generally light during most of the session, but traders were able to aggressively push the spot-month contract above $88 per cwt. The underlying support in the complex is likely to bring about renewed interest next week, although it is still uncertain just how much higher prices will go given the lack of support in cash hog values. October lean hogs closed $1.70 higher at $88.62, December lean hogs closed $1.15 higher at $81.70, and February lean hog futures closed $0.87 higher at $84.10. Pork prices shifted lower despite strong gains in the morning report. Pork cutouts totaled 296.96 loads with 268.44 loads of cuts and 28.52 loads of trim. Pork cutout values: down $2.14, $119.26. Friday's slaughter is estimated at 471,000 head -- 13,000 head above a week ago and unchanged from a year ago. Estimated week-to-date slaughter totals are reported at 2.54 million head -- 38,000 above week ago levels, but 16,000 head less than year ago totals. The CME Lean Hog Index 8/18/2021: down $0.99, $108.18.
MONDAY'S CASH HOG CALL: Steady. Steady bids are expected early Monday, although at this point so much can change through the day. Packers continue to focus on active procurement levels but are still not needing to aggressively increase spending to gain access to market ready hogs.
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