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.
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