Thursday Closing Livestock Market Update - Cattle Markets Closes September With Weaker Tone

GENERAL COMMENTS:

Livestock futures traded Thursday in the same general direction they have for most of the week. Cattle contracts were under pressure, while hog futures are gaining additional momentum. Triple-digit losses developed in most cattle futures, while nearby hog futures were able to score additional triple-digit gains. Although there may be some end-of-month and end-of-quarter positioning taking place Thursday, the overall concerns are that hog supplies will be tighter in the next year and cattle numbers will continue to be larger than expected through the fall and winter. This is leading to some major adjustments to longer-term market expectations. Hog prices moved lower on the National Direct Afternoon Hog Report, falling $0.73 with a weighted average of $73.78 on 5,214 head. December corn is up 6 1/2 cents per bushel and December soybean meal is up $1.70 per ton. The Dow Jones Industrial Average is up 250 points and NASDAQ is up 47 points.

LIVE CATTLE:

Sharp, triple-digit losses developed in live cattle trade Thursday. Posting light to moderate losses most of the week, the live cattle market finally succumbed to the pressure in feeder cattle trade and concerns that additional fundamental weakness may have longer-term implications. October futures broke through support levels seen during the summer and closed at their lowest levels since early March. For the moment, long-term support at $120.42 is holding, but the market remains extremely fragile at this point and any sense of additional weakness could lead to further liquidation. Slightly stronger support appears to be holding in December contracts at $125 per cwt, but unless a major shift is seen in trade direction over the next couple of days, it may be hard to keep more noncommercial traders from exiting the market and moving into other markets. The fact that the most aggressive losses Thursday in live cattle futures were in late-month contracts (April through October 2022) gives even more indication that this latest move lower is not a short-term problem. October live cattle closed $1.20 lower at $120.57, December live cattle closed $1.32 lower at $125.72, and February live cattle closed $1.17 lower at $130.65. Cash cattle trade remains generally subdued Thursday afternoon following light to moderate trade which started Wednesday. A few additional deals have been done in the South at $124 per cwt. This is fully steady with midweek trade and generally steady with last week's weighted average price. Bids are seen in the North at $122 to $124 per cwt live basis, which is generally steady to firm with deals done Wednesday. A few dressed sales developed in Iowa at $196 per cwt, which is steady with both last week and trade earlier in the week. Asking prices on cattle left on showlists are at $124 to $125 live and $199 and higher dressed. The bearish moves in futures trade have had limited immediate impact on cash prices, but it does appear the tone for the week has been set, even though, given the number of reported sales, some additional trade will likely need to develop before the end of the week.

Thursday's slaughter is estimated at 121,000 head, 7,000 more than a week ago and 1,000 more than year ago totals.

Boxed beef prices closed lower: choice down $2.35 ($294.98) and select down $2.46 ($269.32) with a movement of 129 loads (76.38 loads of choice, 25.27 loads of select, 12.23 loads of trim and 14.80 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Given the light to moderate trade seen over the last two days, price levels are expected to have already been set, leaving the cash market generally steady with last week. Although additional clean-up trade may develop Friday, either side is not expected to deviate from current price levels at this point.

FEEDER CATTLE:

Sharp technical pressure flooded into feeder cattle futures Thursday as October through August contracts posted losses of $2 to $2.50 per cwt despite a midday pullback in corn prices. At midday, when grain prices reversed earlier gains, an attempt to bring additional buying into feeder cattle contracts developed, but this attempt was soon thwarted and allowed for even deeper losses by the end of the day. Nearby contracts have now broken through support levels seen in June, which could bring about increased follow-through pressure over the next couple of days. The full effect of larger-than-expected cattle numbers in last week's report has had lingering effects, which is unusual for the cattle market to be impacted this long by an inventory surprise. The challenge seen this time around is that not only cattle numbers are being adjusted, but the overall attitude and long-term expectations of beef supplies for most of 2022 are having to be rethought; that may lead to even more fundamental and technical volatility during the upcoming weeks. September feeders closed $0.35 lower at $153.92, October feeders closed $2.07 lower at $152.55 and November feeders closed $2.37 lower at $2.37. The CME Feeder Cattle Index for Sept. 29: $153.78, down $0.88.

LEAN HOGS:

Lean hog futures resumed the early week buying frenzy with December and February contracts posting triple-digit gains. Any effort Wednesday to back away from the bullish trend was dashed at the opening bell Thursday when buyers once again flooded the lean hog complex. There remains a combination of technical and fundamental buyer support moving into nearby and deferred contract months. However, for now, most of the support is centered around the December through April contracts. This time period is the most impacted by last week's change in inventory expectations, but overall pork demand during the first quarter of 2022 remains generally unknown. For now, traders are less concerned about being able to increase demand for pork, than the ability to find pork to meet this demand. Pork sales last week in the weekly export sales report increased sharply with 42,500 metric tons (mt) reported sold. Mexico once again led the leader board with 20,400 mt of pork, but the biggest shift in the report comes as China once again became a significant buyer after showing only limited support over the last few weeks. China posted purchases of 14,000 mt. Shipments were again moderate at best, with China taking 4,400 mt in previously purchased pork last week. Further focus will be placed on overall exports and especially China's involvement heading into the fourth quarter. October lean hogs closed $0.80 higher at $91.60, December lean hogs closed $1.80 higher at $85.40, and February lean hog futures closed $1.45 higher at $87.22. Pork prices were higher in all the primal cuts except butts and hams. The carcass value rose $1.18 on 280.59 loads of cuts and 31.99 loads of trim. Pork cutout values: up $1.18, $116.29. Thursday's slaughter is estimated at 473,000 head, 2,000 less than a week ago and down 12,000 from a year ago. The CME Lean Hog Index for Sept. 29: down $0.02, $92.90.

FRIDAY'S CASH HOG CALL: Steady to $1 higher. Underlying support in futures trade and pork values is expected to start having a positive impact on cash values in the near future. It is still uncertain if that support will be seen yet this week as packers struggle to maintain optimal processing levels, which could limit the need for aggressive late week buying efforts.

Thursday Midday Livestock Market Update - Cattle Futures Tumble on Fundamental Pressure

GENERAL COMMENTS:

Growing weakness is seen in cattle futures Thursday morning. Although the last day of the month and third quarter is bringing about some additional position-taking, the focus on growing market weakness heading into the last three months of the year is evident from a fundamental and technical perspective. The move lower Thursday morning has broken through support levels in nearby contracts with October futures falling below $121 per cwt and moving to six-month lows. The overall lack of cash market support -- which typically starts to develop during September -- is creating concern that longer-term gains may not follow traditional seasonal patterns through the rest of the year. Hog futures continue to remain energized from expectations that hog supplies will be tight over the next year, creating triple-digit gains early Thursday morning. December corn is down 5 1/2 cents per bushel following the crop report and December soybean meal is down $6.90 per ton following aggressive pressure in soybean futures. The Dow Jones Industrial Average is down 433 points with Nasdaq down 43 points.

LIVE CATTLE:

Active pressure moved into live cattle futures Thursday. The previous pressure in feeder cattle markets and continued softness in beef values earlier in the week have taken a toll on live cattle futures with nearby contracts testing and breaking through short-term support levels. Early Thursday, trade broke through $121 per cwt in spot October contracts and $126 per cwt in December contracts. Although an attempt to move off session lows at midday is helping regain limited buyer interest, these lows represent a six-month low in spot month price levels. Concerns about sluggish export sales heading into the fourth quarter of the year and uncertainty as to inventory levels seen in last week's Cattle on Feed report are keeping traders generally bearish the entire cattle complex at this point. Beef sales and shipments in the latest weekly export sales report remained lackluster once again with a total of 16,100 metric tons (mt) of beef sold, while 18,500 mt of beef was shipped. Although weekly sales are still well above August lows, the lack of late-year growth continues to add further concern to the entire beef market. Cash cattle activity Thursday morning remains generally quiet, but the cash market tone for the week may have already been set due to light to moderate trade in most areas Wednesday. Live cash cattle trade in the South developed at $124 per cwt, which is mostly steady with last week's weighted average. Dressed trade in the North was also reported steady with last week at $196 per cwt. The hope is feeders can hold out for higher prices to establish steady to firm cash markets for the week. But given the bearishness of futures trade, and steady decline in beef values for the week, it is not looking promising that anything better than steady will be seen once all needed cash cattle trade is in the books. Asking prices are around $124 to $125 in the South and $199 and higher in the North. 

Thursday morning's boxed beef prices are lower in light trade, with choice cuts $1.22 lower at $296.11 and selects down $0.47 at $271.31 on a total count of 51 loads. Dow Jones estimated Thursday's cattle slaughter at 121,000 -- 3,000 more than a week ago and 1,000 more than year ago levels.

FEEDER CATTLE:

Sharp early losses in nearby feeder cattle futures set a significantly weaker tone for the entire cattle complex Thursday. Limited volume during the first couple hours of trade added to the market uncertainty. Although buyers are attempting to slowly move back into the market at midday, the concern that additional liquidation will develop before the end of the session is keeping most buyers well away from the complex. September futures are very lightly traded with most of the market activity moving to the October and November contract months. October contracts have broken through June lows during morning trade, which has been a significant support level the market has been closely watching over the last few weeks. October feeder cattle futures have now fallen over $17 per cwt from contract highs set during the third week of August. Technically speaking, the next major support level is May lows at $147 per cwt, creating growing uncertainty of buyer support over the near future. The CME Feeder Index was priced at $154.66 for Sept. 28.

LEAN HOGS:

Renewed buyer support quickly and aggressively moved back into all lean hog futures trade with nearby contracts posting additional triple-digit gains Thursday morning. With prices shifting lower Wednesday, buyers seem to once again be comfortable with the current market balance as tighter supplies may continue to be a major issue for the lean hog complex through the first half of 2022. Even though daily slaughter rates are starting to shift lower from year ago levels on a regular basis, the tighter supplies of hogs in the country make lower procurement levels less of a price issue and could help tighten overall pork supplies over the upcoming weeks and months. The strong export sales numbers posted in the morning report are adding to the overall futures gains. Pork sales last week in the weekly export sales report increased sharply with 42,500 mt reported sold. Mexico once again led the leader board with 20,400 mt of pork, but the biggest shift in the report comes as China once again became a significant buyer after showing only limited support over the last few weeks. China posted purchases of 14,000 mt. Shipments were again moderate at best, with China taking 4,400 mt in previously purchased pork last week. Further focus will be placed on overall exports and especially China's involvement heading into the fourth quarter. Firm gains once again developed as belly cuts surged higher by $14.49 per cwt. Cutouts are up $3.25 at $118.36 Thursday morning on 162.07 loads. Negotiated hog prices are $0.34 lower at $73.61 per cwt on 3,445 head. The swine/pork market formula price is listed at $93.68 per cwt. Dow Jones estimated Thursday's hog slaughter at 476,000, steady with a week ago, while 8,000 less than year ago levels. The CME Lean Hog Index is estimated at $92.92 for Sept. 28.

Thursday Morning Livestock Market Update - Cattle, Hogs Steady

GENERAL COMMENTS:

Cattle made a valiant attempt to hold Wednesday, but there just was not enough fundamental reason to generate strong buying interest. Continued weakness in boxed beef is keeping pressure on the market. After mixed prices earlier in the day, choice cuts fell $4.23 with select cuts down $2.57 by the end of the day. Cash cattle traded Wednesday at steady prices in both the North and South compared to last week. This sets the stage for business the rest of the week. Packers are likely not to bid higher due to market weakness, but the fact that they are paying steady with last week seems to be somewhat of a victory. Slower demand and lighter cash activity may result in cattle weights increasing over time. Feeder cattle futures closed at the lowest level since June 10 and are positioned for further losses as futures closed below support. September feeder cattle futures cease trading Thursday. Weekly export sales will be released Thursday morning.

Spread trading was evident in October and December hog futures. It is unlikely the price discount December holds to October will be maintained, which triggered the selling of October and buying in December. The report last week indicated lower hog supplies than anticipated, which would support this action. Cash on the National Direct Afternoon report was still lower, but the losses were limited to $0.13. Cutouts were strong Wednesday, gaining $6.99 lead by a huge increase in hams of $30.69. Weekly export sales will be released Thursday morning with the focus not only on overall sales, but who the main buyers were. Saturday slaughter is estimated at 155,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures are oversold and could find some short-covering at some point if future hold support.	1)	December live cattle futures closed at the lowest level since May 4 adding to the fundamental bearishness of the market.
2)	Steady cash cattle trade this week is better than had been anticipated due to demand concerns and higher cattle numbers.	2)	The inability of cattle to find support even after the large decline in late August and early September along with the negative Cattle of Feed report, does not bode well for the near term.
3)	Hog futures have had a strong price rally and have been able to hold the gains for the most part. Traders have confidence holding and increasing long positions.	3)	All hog contracts have a large price gap below the market that may be filled at some point.
4)	Strong exports sales Thursday would provide further support to the market as it could further tighten future supply of hogs.	4)	Cash continues to decline as packers continue to find the hogs they need to meet demand without having to bid up for them. Cash is not supporting the current strong futures position.

Wednesday Closing Livestock Market Update - Late-Day Feeder Cattle Losses Brings Concerns

GENERAL COMMENTS:

Firm pressure across livestock trade developed early in the session with feeder cattle futures taking the brunt of market weakness by the end of the day. Lean hog futures seemed to focus more on position adjustments following aggressive market shifts higher over the last two days. It is uncertain just how much additional volume will develop over the next couple of weeks with month and quarter end likely to create light to moderate position adjustments, while other traders are comfortable with current positions and will likely remain on the sidelines until the dust settles. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.13 with a weighted average of $74.51 on 5,595 head. December corn is up 6 1/2 cents per bushel and December soybean meal is up $1.70 per ton. The Dow Jones Industrial Average is up 250 points and NASDAQ is up 47 points.

LIVE CATTLE:

Live cattle futures continue to trickle lower in light but generally weaker trade Wednesday afternoon. Light buying support attempted to step into several contracts late morning, but this support was offset by renewed market pressure and concerns of further pressure in nearby and deferred trade. All nearby live cattle contracts continue to trade well below both 40-day and 100-day moving averages, creating further underlying weakness in technical factors. The potential that this may bring about further late month losses could continue to test short-term support levels already set in September. December contracts continue to hold a $5.28 per cwt premium over the October contract, but the lack of recent support and questions about tighter cattle supplies through next spring is keeping most commercial and noncommercial traders out of the market at this point. October live cattle closed $0.22 lower at $121.77, December live cattle closed $0.45 lower at $127.05, and February live cattle closed $0.50 lower at $131.82. Cash cattle trade started to develop mid to late morning Wednesday. Overall trade volume was termed as "light to moderate," but it appears there is enough volume in all areas to establish a steady trend and likely set the tone for the rest of the week. Live cattle sold in the

South at $124 per cwt, which is generally steady with last week's weighted average. Live cattle in the North are reported at $122 to $124 per, while dressed deals in the North are posted at $196 per cwt. Dressed trade is fully steady with last week. Asking prices on cattle are holding at $125 live and $198 dressed, as feeders are unlikely to q back away from these price levels. The Fed Cattle Exchange Auction Wednesday listed a total of 3,350 head, of which 611 actually sold, 1,459 were scratched from the auction and 1,281 head were listed as unsold, as they did not meet the reserve prices that ranged from $122 to $124. Opening prices ranged from $121 to $123; high bids ranged from $121 to $124. The state-by-state breakdown looks like this: TX 961 total head, with 494 head sold at $124, 467 head went unsold, none were scratched from the auction; Nebraska had 1,190 total head, none of which sold during the auction, 182 head went unsold and 1,009 were scratched from the auction as they were sold just before the auction started at $125; Oklahoma had 694 total head, none of which sold during the auction, 244 head went unsold and 450 were scratched from the auction as they were sold just before the auction started at $123 to $124; Kansas had 505 total head, with 117 head sold at $122.25, 388 head went unsold, and none were scratched from the auction.

Wednesday's slaughter is estimated at 116,000 head, 6,000 less than a week ago and year ago totals.

Boxed beef prices closed lower: choice down $4.23 ($297.33) and select down $2.57 ($271.78) with a movement of 158 loads (98.08 loads of choice, 28.94 loads of select, 14.23 loads of trim and 16.73 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady. Initial light to moderate trade seen in most areas Wednesday is steady with last week's average price in both the North and South. Even though additional trade is expected in all areas over the next couple of days, it is very possible that the tone of the market has been set for the week.

FEEDER CATTLE:

Triple-digit losses redeveloped in feeder cattle as traders reverted to pressure seen Monday and offset most, if not all of the gains that developed Tuesday. This renewed pressure in nearby contracts has broken through early week support levels in October contracts, moving to three-month lows. The potential for additional softness on the last trading day of September and end of the third quarter could lead to further late week pressure in nearby feeder cattle trade. September feeders closed $0.12 lower at $154.27, October feeders closed $1.50 lower at $154.62 and November feeders closed $1.77 lower at $155.27. The CME Feeder Cattle Index for Sept. 28: $154.66, down $0.15.

LEAN HOGS:

Following two days of active gains in nearby lean hog futures, traders focused on position taking with most contracts holding narrow losses at the closing bell. Spot October futures were the hardest hit, as continued variability in pork values and wide shifting cash hog values is limiting the optimism for short-term market moves. Other nearby contracts closed 22 cents lower to 2 cents higher as traders try to establish support at the new but higher trading range. Moves over the last week have offset the steady downward pressure seen during the first half of September. Even though hog supplies well continue to be tighter than most expected over the next year, there remains the looming question of being able to move the available pork supplies at the higher price levels. With China production continuing to ramp up and wide volatility in global economic markets, there are significant questions if pork can continue to be priced at current or higher levels and still maintain a similar share of the meat market. October lean hogs closed $0.87 lower at $90.80, December lean hogs closed $0.02 higher at $83.60, and February lean hog futures closed $0.22 lower at $85.77. Pork prices surged higher following the support seen in morning reports based on an aggressive gain in ham cuts. Ham prices moved $30.69 higher, creating volatile trade in wholesale pork markets. Other primal cuts have traded in a more typical, narrow price pattern. Pork cutouts totaled 329.09 loads with 269.67 loads of pork cutouts and 59.42 loads of trim. Pork cutout values: up $6.99, $115.11. Wednesday's slaughter is estimated at 475,000 head, 4,000 more than a week ago and up 8,000 from a year ago. The CME Lean Hog Index for Sept. 28: up $0.77, $92.92.

THURSDAY'S CASH HOG CALL: Steady. Despite early week support in futures trade, the fundamental side of the hog industry remains much less bullish. Wide market swings in pork values and variable procurement rates at plants are keeping packers cautious with cash purchasing. Early cash hog bids are expected to remain generally steady Thursday morning.

Wednesday Midday Livestock Market Summary - Futures Shift Lower

GENERAL COMMENTS:

Following wide, triple-digit, market moves over the past two trading sessions, traders seem to have a much calmer attitude Wednesday morning. Light to moderate losses are seen in most livestock futures during the first few hours of trade. The lack of follow-through support Wednesday is no indication of a change in market direction, but more confirmation that traders are willing to take a much-needed breath at current price levels, before stepping back into the complex. With end of month and quarter quickly approaching, it is expected some moderate position adjustments will develop in all markets. This could add to short-term market variability over the next couple of days. December corn is up 4 1/2 cents per bushel and December soybean meal is up $0.80 per ton. The Dow Jones Industrial Average is up 189 points with Nasdaq up 54 points.

LIVE CATTLE:

Follow-through weakness trickled back into live cattle trade with futures holding 30- to 50-cent losses most of Wednesday morning. Limited sell orders have slowly exhausted the downward market moves at midday, with price mixed in a very narrow trading range. The potential to keep prices stable at midweek is likely helping rekindle light but noticeable buyer support across nearby and deferred contracts. December futures remain near $127.30 per cwt, just above intermediate support levels of $127 per cwt set earlier this month. The concern that additional light but noticeable softness will continue to be seen in wholesale beef values, and lack of upward moves in cash trade, could keep traders out of the market for the near future. Cash cattle trade has started to slowly be reported Wednesday morning with light trade in the South reported at $124 per cwt. This is mostly steady with last week's weighted average price in the area. Packer interest is expected to improve through the rest of the day in all areas with more Southern trade likely to develop over the next couple of days. Bids are seen at $122 live and $196 dressed in the North, but as of yet feeders have not been willing to lower asking prices to these levels. Asking prices are around $125 in the South and not fully established in the North. It is likely asking prices will develop around $200 per cwt dressed in the North, which would mean a moderate gap remains between initial offers and bids. It is still too early to tell if the early Southern trade in Kansas and Texas will be enough to set the tone of the market through the rest of the week, or if price levels will continue to adjust in the next couple of days. The Fed Cattle Exchange Auction on Wednesday listed a total of 3,350 head; 611 actually sold; 1,459 were scratched from the auction; and 1,281 head were listed as unsold, as they did not meet the reserve prices, that ranged from $122 to $124. Opening prices ranged from $121 to $123, high bids ranged from $121 to $124. The state-by-state breakdown looks like this: Texas 961 total head, with 494 head sold at $124, 467 head went unsold, none were scratched from the auction; Nebraska 1,190 total head, none of which sold during the auction, 182 head went unsold and 1,009 were scratched from the auction as they were sold just before the auction started at $125; Oklahoma 694 total head, none of which sold during the auction, 244 head went unsold and 450 were scratched from the auction as they were sold just before the auction started at $123 to $124; Kansas 505 total head, with 117 head sold at $122.25, 388 head went unsold, and none were scratched from the auction. 

Wednesday morning's boxed beef prices are mixed in moderate trade, with choice cuts $2.54 lower at $299.02 and selects up $0.06 at $274.41 on a total count of 84 loads. Dow Jones estimated Wednesday's cattle slaughter at 121,000, 1,000 more than a week ago, and steady with year ago levels.

FEEDER CATTLE:

Light to moderate losses have developed in feeder cattle futures as traders seem to be slowly backing away from the wide price swings seen over the last two trading sessions. Nearby futures are holding consistent losses of 30- to 40-cents per cwt, although very limited trade volume is seen Wednesday morning. Renewed firmness in corn and grain prices is also adding to the fundamental softness in feeder cattle trade as buyers are focusing on the higher cost of production through the end of the year. It is likely most futures trade has fully worked through the inventory level adjustments from last week's reports, which could help traders to build on current price levels in the coming days and weeks. With increased cash feeder cattle sales over the coming weeks, and more cattle moving from pasture to feedlots, the potential for seasonal market pressure remains. But this will not overshadow the expectation that long-term supply tightness is still expected in both feeder cattle and live cattle numbers as the beef herd continues to contract. The CME Feeder Index was priced at $154.81 for Sept. 27.

LEAN HOGS:

The aggressive buyer support seen the last two trading sessions has cooled for the moment with light to moderate losses across the complex. Following a $5 to $7 rally over the last couple of trading sessions, traders are now focusing on where the longer-term price direction may lead. Most contracts are holding 50- to 70-cent losses during morning trade, as traders are slowly adjusting positions and taking profits. This could allow for additional follow-through buyer support in all nearby and deferred lean hog trade in the next couple of weeks, but further gains are expected to be much more defined and focused on fundamental market direction. The lack of stability in both wholesale pork prices and cash hog values over the last couple of weeks is adding to concerns that more volatility will remain in the hog complex well into the fourth quarter. There will also be increased attention on Thursday's export sales report, helping to get a better indication of China's activity in the pork market through the end of September. Sharp adjustments were made to pork cutout values following a $35 per cwt rally in ham prices. Daily price variability in ham prices has continued to create wide market swings in the entire wholesale pork cutout market. Cutouts are up $9.02 at $117.14 Wednesday morning on 190.98 loads. Negotiated hog prices are $1.19 lower at $73.95 per cwt on 3,443 head. The swine/pork market formula price is listed at $92.39 per cwt. Dow Jones estimated Wednesday's hog slaughter at 476,000 -- 1,000 less than a week ago and 10,000 less than year ago levels. The CME Lean Hog Index is estimated at $92.92 for Sept. 28.

Wednesday Morning Livestock Market Update - Hogs Expected to Settle Down

GENERAL COMMENTS:

Live cattle futures may have found a level at which they may be comfortable for the time being. Futures are carving out a sideways trading range with the market factoring in current fundamental news. The pressure on the financial markets will have an influence on the cattle complex as it generally does. There was no activity in the cash cattle market Tuesday with none expected. Even though there had been no cash activity and limited bids and offers, cash is not expected to move the needle very much. Packers continue to watch the weakness of boxed beef and the inability of futures to rebound after large recent decline. Boxed beef was lower with choice cuts down $1.14 and select cuts down $0.03. Feeder cattle rebounded somewhat Tuesday, but likely due to the market being overdone to the downside on Monday.

Hog futures slowly gained strength throughout the day as traders continue to react to the bullish report. The report renewed the idea that hog supplies will continue to tighten as time moves forward. Price strength Tuesday was not supported by stronger cash as the National Direct Afternoon report declined $1.10. Support also did not stem from stronger cutouts as values declined $3.83. That does not bode well for continued support after the current market correction. Support will need to come from packers having to bid higher in order to find the necessary hogs for slaughter, but the market will need to wait for that. Packers are able to obtain the numbers they need to meet current demand.

	BULL SIDE		BEAR SIDE
1)	Cattle seem to be building a base of support with futures sideways over the course of this month.	1)	The inability of live cattle futures to trade higher after the report even though bearish numbers had already been factored in, indicates the market was not overdone to the downside and is where it should be relative to fundamentals.
2)	The Cattle on Feed report is already factored in, leaving the market positioned for a price retracement to the upside.	2)	Boxed beef prices continue to decline, leaving packers less aggressive.
3)	The strength of hogs despite weaker cash so far this week is positive to the market as traders focus on positioning for tighter supply over time.	3)	Hog futures have a huge price gap below the market that may be filled once the short-covering and buying exuberance runs its course.
4)	Hog futures have regained the losses of the past month and closed above chart resistance Tuesday, opening the way for further gains.	4)	Cash and cutouts have not been supportive to the futures price rally this week. This may leave further upside price potential limited.

Tuesday Closing Livestock Market Update - Hog Prices Continue Surge Higher

GENERAL COMMENTS:

Traders entered the livestock complex Tuesday focused on taking additional actions following Monday's wide market swings. Although triple-digit gains developed in feeder cattle and lean hog futures, a portion of expected market activity shifted to the aggressive pressure in stock markets and several other commodities. This could keep livestock market participation sluggish over the next couple of days. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $1.10 with a weighted average of $74.64 on 7,097 head. December corn is down 7 cents per bushel and December soybean meal is down $0.50 per ton. The Dow Jones Industrial Average is down 569 points and NASDAQ is down 423 points.

LIVE CATTLE:

Mixed trade in live cattle futures was seen at the closing bell, despite follow-through pressure in all contracts. Even though nearby live cattle futures traded lower, the lack of aggressive pressure seemed to create both a sense of longer-term uncertainty and short-term stability, at least in nearby futures trade. The most uncertainty in beef supply levels continues to be seen in spring and summer 2022 markets, impacting the February through June futures most. With October and December hovering near $122 and $127 per cwt respectively, traders appear to have hit price support levels following the nearly $10 per cwt market slide over the last couple of weeks. It is likely that even though additional bearish market news may develop, the potential to further damage price levels is starting to become very limited. This market stability at or near support levels typically precedes renewed noncommercial buyer interest, resulting in a strong positive price bounce. However, given the seasonal factors of the beef market, it is uncertain just how quickly such a price bounce may develop. October live cattle closed $0.40 lower at $122.00, December live cattle closed $0.30 lower at $127.50, and February live cattle closed $0.07 lower at $132.32. Cash cattle markets remain extremely quiet Tuesday afternoon with packer showing very little interest and only limited asking prices seen across cattle markets. Southern cattle have listed some cattle prices at $125 per cwt, which is similar to initial asking prices the last couple of weeks. Cattle are not priced on a dressed basis in the North, but both sides expect trade to develop Wednesday afternoon at the earliest and likely move into Thursday or Friday. With Friday starting a new month and quarter, there may be some incentive to hold out until then.

Tuesday's slaughter is estimated at 121,000 head, 1,000 less than a week ago and 3,000 more than year ago totals.

Boxed beef prices closed lower: choice down $1.14 ($301.56) and select down $0.03 ($274.35) with a movement of 155 loads (99.31 loads of choice, 21.20 loads of select, 26.19 loads of trim and 8.78 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Limited interest is still seen in the market late Tuesday and likely to keep both sides hesitant to step into the market early Wednesday morning. Packer interest may start to slowly develop as the day continues, but initial bids are likely to be softer than previously seen in the last couple weeks, but feeders seem to be reluctant to back away from asking prices at this point.

FEEDER CATTLE:

Firm buyer support actively moved back into feeder cattle trade as traders try to separate emotional market swings with true fundamental pressure seen in Monday's post-report price tumble. The fact that feeder cattle placements are higher than expected and likely to lead to additional gains in the next couple of months has helped to prepare traders for the reality that overall beef supplies through 2022 may not be as tight as earlier expected. However, this still doesn't totally offset the expectation that beef supplies will still tighten over the next year. Price premiums have also q been eroded in the upcoming months with a $1.80 per cwt trading range separating October through January futures contracts. With September futures nearing expiration, most trade has moved to October and November futures which gives a better indication of true market support in the coming days and weeks. September feeders closed $0.15 higher at $154.40, October feeders closed $1.35 higher at $156.12 and November feeders closed $1.47 higher at $157.05. The CME Feeder Cattle Index for Sept. 27: $154.81, down $0.06.

LEAN HOGS:

Strong additional gains developed in lean hog futures Tuesday, although expanded trade limits were not utilized. This will allow daily price limits to reset to $4.75 per cwt. December contracts led the complex higher with a $2.02 gain. This market shift higher represents a $11 per cwt market rally off the lows set two weeks ago. Even though hog supply levels are now seen as much tighter than before, the unchecked market support in late September is likely to be leaving the market vulnerable for a light to moderate correction in the near future. There remains uncertainty about continued support in cash and wholesale pork prices, given the volatility in these markets over the last couple of weeks. Until additional strong support can steadily develop into pork prices, it is likely that the upward market surges in lean hog prices could be limited. There remains increased volatility in the market, not only from industry production levels, but the recent wide swings in outside markets could add additional noncommercial trade interest to the entire lean hog complex in the coming days. October lean hogs closed $1.42 higher at $91.67, December lean hogs closed $2.02 higher at $83.57, and February lean hog futures closed $1.57 higher at $86.00. Pork prices tumbled aggressively lower once again Tuesday afternoon based on a $20 per cwt reduction in ham cuts. Other primal cuts have shown moderate price stability through the week. Pork cutouts totaled 351.84 loads with 308.49 loads of pork cutouts and 43.35 loads of trim. Pork cutout values: down $3.83, $108.12. Tuesday's slaughter is estimated at 476,000 head, 16,000 more than a week ago and down 14,000 from a year ago. The CME Lean Hog Index for Sept. 27: up $0.64, $92.15.

WEDNESDAY'S CASH HOG CALL: Steady. Even though strong support is seen in other areas of the hog market, it appears that cash markets may continue to lag futures trade support. Given consistent procurement goals, packers appear to be well covered for immediate needs, limiting aggressive bidding through the next couple of days.

Tuesday Midday Livestock Market Summary - Traders Try to Find Stability Following Monday's Wild Ride

GENERAL COMMENTS:

Feeder cattle futures are the only livestock market moving in the opposite price direction from Monday's trade. Feeder cattle traders are focusing on the fact that emotional trade Monday may have overstated downward market pressure, while also adjusting price levels to lower corn markets Tuesday. Hog futures remain generally bullish; gains are firm, but nowhere as aggressive as seen Monday. The potential to build underlying stability across the entire livestock market in the next couple of days could help bring additional -- but needed -- buyer support back to the table heading into the month of October. December corn is down 4 1/2 cents per bushel and December soybean meal is down $0.80 per ton. The Dow Jones Industrial Average is down 438 points with Nasdaq down 390 points.

LIVE CATTLE:

Narrow losses have developed Tuesday as the live cattle complex has seemingly been immune to the post-report market volatility seen in all other livestock trade. Nearby contracts are posting uniform losses of 5 to 22 cents per cwt with December contracts showing the most activity -- and also the most price pressure of the complex. The lack of market movement Monday and Tuesday seems to indicate traders have already adjusted to increased cattle inventory levels in the last six weeks. The aggressive market pressure in nearby contracts based on uncertainty of long-term demand and exiting of noncommercial traders, points to market prices at or near support levels. Cash cattle markets are quiet Tuesday morning, which is not unusual at all. Bids are still undeveloped in all areas, but it would not be surprising if a few starter bids appear before the end of the day. Asking prices on live Southern cattle are around $125 per cwt but asking prices in the North are still unavailable. It is likely most trade will be pushed off until Wednesday or later, the price volatility in most markets will likely add some uncertainty to cash markets over the next couple of weeks. But packers are still expected to be in the market for moderate amounts of cattle moving into early October. 

Tuesday morning's boxed beef prices are mixed in light trade, with choice cuts $0.33 lower at $302.37 and selects up $1.63 at $276.01 on a total count of 81 loads. Dow Jones estimated Tuesday's cattle slaughter at 121,000 -- 1,000 more than a week ago and 3,000 more than year ago levels.

FEEDER CATTLE:

Buyers have slowly but steadily stepped back into the feeder cattle complex Tuesday as bearish report news seems to have slightly overstated market pressure early in the week. October and November contracts are holding $1 per cwt gains, but price pressure may still hold given recent increases in feeder cattle placements. It is important to remember the reports deal with historical data. In this situation, placement levels are as of Sept. 1, nearly a month ago. It is important to keep things in perspective and understand that placements in August were higher than nearly anyone thought, but current market situations also point to steady demand for feeder cattle as more cattle are sold into feedyards due to the seasonal cycle. It will be interesting to compare Sept. 1 data with Oct. 1 data and determine if this trend of increased placements continues through the entire season. A firm pullback in corn prices Tuesday is also helping add to firm but limited buyer support in nearby feeder cattle trade, as traders try to lock in margins before they place cattle in feedyards. The CME Feeder Index was priced at $153.98 for Sept. 24.

LEAN HOGS:

Light to moderate buyer support is trickling back into the lean hog complex Tuesday morning following limit gains Monday. Traders are still trying to sort out exactly what the short- and long-term implications are to the much tighter inventory situation revealed in the Hogs and Pigs report. The report is quarterly, compared to most other ag and livestock reports which are monthly, so it gives a much less clear picture of how the hog industry is adjusting to market conditions. But given the uncertainty surrounding demand from China for U.S. pork in the coming year, significant further upside market potential could be temporarily limited. Wide market swings in wholesale pork prices on a daily basis are also adding to the confusion, creating less clarity between market volatility and the demand-driven direction of the market. Spot October contracts are holding narrow gains, while other nearby contracts are trading 50 to 90 cents higher at midday. Cutouts are up $1.63 at $113.58 Tuesday morning on 190.97 loads. Negotiated hog prices are $0.99 lower at $75.14 per cwt on 3,757 head. The swine/pork market formula price is listed at $92.53 per cwt. Dow Jones estimated Monday's hog slaughter at 475,000 -- steady with a week ago and 15,000 less than year ago levels. The CME Lean Hog Index is estimated at $91.51 for Sept. 24.

Tuesday Morning Livestock Market Update - Follow-through Buying in Hogs Expected

GENERAL COMMENTS:

The bearish reaction to the Cattle on Feed report was evident in the feeder cattle market as traders traded the bearish implications of higher placements. But the overall cattle complex has to deal with higher supplies and placements than expected. Live cattle may have this mostly factored in and may hold recent support if cash cattle will be able to hold. However, the report may keep packers from being aggressive this week likely because they were able to purchase cattle last week at steady to lower cash. Boxed beef prices were lower with choice cuts down $0.62 and select cuts down $0.15. The Commitment of Traders report showed funds were net sellers of 11,339 reducing their net-long positions to 34,704. This is much lower than it had been just a few weeks ago.

Hogs reacted violently to the bullish Hogs & Pigs report with futures gapping open and posting triple-digit gains across the board. December and February contracts closed limit up allowing for expanded limits Tuesday of $7.00. That will not likely be used, but it will be enforce for the day. Tighter inventories and tightening supply should provide the support many in the industry had been anticipating earlier this year. However, that will need to translate into higher cash, which was lacking Monday. The National Direct Afternoon report showed cash down $1.19. Cutouts showed strength with prices up $1.18. The Commitment of Traders report showed funds as net sellers of 8,063 contracts reducing their net-long positions to 55,850. This will likely change now that the market has turned bullish.

	BULL SIDE		BEAR SIDE
1)	Live cattle were able to show only minor losses with technical support levels still holding.	1)	The pressure on feeder cattle may keep pressure on live cattle leaving the market floundering for a period of time.
2)	The decline of boxed beef prices may be slowing, which could provide some price support to cash.	2)	Packers will be less aggressive in bidding for cattle supplies as they know there are plenty that will need to come to the market.
3)	Hog futures should show follow-through buying Tuesday as traders continue to react to the bullish report.	3)	Hog futures opened higher Monday leaving large gaps under the market that may be closed at some point.
4)	Tighter hog numbers may be a reality through the end of this year and into next year. Futures are adjusting to that possibility.	4)	Pork supply might be tighter, but that may not necessarily mean prices will move substantially higher if demand slows.

Monday Closing Livestock Market Update - Lean Hog Futures Surge Higher

GENERAL COMMENTS:

Post-report fireworks in livestock trade did not disappoint Monday with lean hog futures hitting limit gains in two nearby contracts, while triple-digit losses flooded through most feeder cattle trade. Not only were traders trying to adjust for inventory changes in the industry, but production costs significantly changed given double-digit gains in corn prices Monday. Live cattle markets posted limited losses, but it is likely that more volatility will move through the livestock market and the live cattle complex, specifically, in the coming days. This could keep most traders on edge and price levels volatile during the week. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, falling $1.19 with a weighted average of $75.74 on 5,865 head. December corn is up 12 3/4 cents per bushel and December soybean meal is up $1.00 per ton. The Dow Jones Industrial Average is up 71 points and NASDAQ is down 77 points.

LIVE CATTLE:

Live cattle futures seemed to be the calmest of all livestock trade Monday. Even though cattle on feed numbers in Friday's report still left traders surprised, the focus in the market Monday continued to be primarily in the feeder cattle and lean hog complex. Although most of the price moves and market activity were outside the live cattle complex Monday, this doesn't mean that the live cattle contracts are totally off the hook in the coming days. There is a strong possibility that once market activity slows in both the feeder cattle and lean hog trade over the next couple of days, traders may take a much more intense look at live cattle contracts. This is likely to show up most in spring and summer 2022 contracts, which also took the brunt of any downward pressure Monday. Traders are also closely focusing on beef demand expectations in the coming weeks, as wholesale and retail beef values remain rather volatile heading into the fall demand season. October live cattle closed $0.52 lower at $122.40, December live cattle closed $0.35 lower at $127.80, and February live cattle closed $0.22 lower at $132.40. Cash cattle markets are extremely quiet, which is expected for a Monday. The underlying softness in futures trade is likely to keep both sides cautious on the sidelines until midweek or later. Showlists for the week appear to be mixed with gains in Texas, while Kansas, Nebraska and Colorado all are showing lower offered cattle on lists. The five-area weekly average price last week is $123.64 per cwt. This is $0.24 per cwt lower than the previous week and is the fourth consecutive weekly loss. Traditionally, cash cattle prices bottom out the week following Labor Day and steadily move higher through early October. The hope it that without this early fall market bounce, prices will not see the normal late October/November price pressure.

Monday's slaughter is estimated at 119,000 head, steady with a week ago and 3,000 more than year ago totals.

Boxed beef prices closed lower: choice down $0.62 ($302.70) and select down $0.15 ($274.38) with a movement of 109 loads (64.49 loads of choice, 22.58 loads of select, 10.21 loads of trim and 12.02 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady. Limited activity is likely early Tuesday with packers expected to be slow to develop bids through the week. Stability in boxed beef values and nearby futures prices will go a long way in helping to instill cash market confidence.

FEEDER CATTLE:

Triple-digit pressure developed in most feeder cattle contracts as traders tried to adjust positions and price levels following Friday's cattle on feed report. Given the fact that feeder cattle placements in August increased 2% above last year's levels and well above most analysts' expectations, traders are trying to adjust to the larger-than-expected supply levels that will likely hit the fat cattle market in the second and third quarter of 2022. October through January contracts posted the most aggressive losses of $2.50 to $3 per cwt as traders expect even more cattle to move through show rings in the next couple of months as seasonal feeder cattle sales will hit their stride. It is still expected that when the dust clears and all cattle are sold, overall cattle numbers will be lighter than in years past, but this is little consolation to the short-term market, which is facing the largest August placement on record. September feeders closed $0.37 lower at $154.25, October feeders closed $2.57 lower at $154.77 and November feeders closed $3.00 lower at $155.57. The CME Feeder Cattle Index for Sept. 24: $154.87, up $0.89.

LEAN HOGS:

Lean hog futures responded to the news of tighter-than-expected hog inventory levels in Friday's hogs and pigs report. Given that the report posted such a significant difference than market estimates, traders tried to readjust positions Monday. Typically, the hogs and pigs report is a "non-event," as production and intention data seems to be very well indicated by the industry before the report. With the integrated level of the industry, it is still a little confusing as to how so many analysts could be so far off on not only current inventory levels, but farrowing intentions for the upcoming year. This moved futures trade to an aggressive daily trade limit of $4.75 per cwt, allowing for expanded trade limits of $7 per cwt to be available Tuesday. Just because trade limits are expanded doesn't mean prices will move this far, but the risk is that any contract month has the potential to move $7 per cwt in either direction. Just the wider limits alone adds a sense of volatility not usually seen in the lean hog market. October lean hogs closed $2.97 higher at $90.25, December lean hogs closed $4.75 higher at $81.55, and February lean hog futures closed $4.75 higher at $84.42. Pork prices shifted moderately higher Monday as primal cuts firmed in most markets. It appears that prices are slightly more stable than recent wild price swings. Pork cutouts totaled 301.09 loads with 266.82 loads of pork cutouts and 34.27 loads of trim. Pork cutout values: up $1.18, $111.95. Monday's slaughter is estimated at 478,000 head, 15,000 more than a week ago and down 12,000 from a year ago. The CME Lean Hog Index for Sept. 24: up $0.04, $91.51.

TUESDAY'S CASH HOG CALL: Steady. Strong underlying support in futures trade and the expectation that hog inventory levels will continue to tighten should help to solidify cash hog values in the next several weeks. Although given packer concerns of keeping procurement levels active, short-term cash price moves may be more limited than many would like.

Monday Midday Livestock Market Summary - Limit Gains in Hog Futures Follow Friday's Report

GENERAL COMMENTS:

Trade Monday morning has been full of post-report market adjustments. The Cattle on Feed report posted bearish news with larger-than-expected cattle on feed numbers and feeder cattle placed in feedlots during the month of August. Lean hog futures are showing significant support as tighter-than-expected inventory levels are driving buyers back into all nearby and deferred contract months. December and February futures are trading $4.75 per cwt higher at midday, which is the daily trading limit. December corn is up 10 3/4 cents per bushel and December soybean meal is up $3.00 per ton. The Dow Jones Industrial Average is up 141 points with Nasdaq down 109 points.

LIVE CATTLE:

Trade is limited in nearby live cattle futures Monday morning. Although the underlying tone of the market remains weak following Friday's Cattle on Feed report, most of the activity has been centered in deferred live cattle markets and feeder cattle trade, leaving nearby futures with just light to moderate losses at midday. Larger-than-expected on feed numbers are negative for the entire industry, but traders are more focused on increased placement levels, which will most impact market-ready cattle numbers in the second and third quarters of 2022. This has April through August 2022 contracts posting the most aggressive losses of 55 to 75 cents per cwt. It is uncertain just how much additional weakness will be pushed through the live cattle complex as a portion of the pressure is expected to have already been factored into price levels over the last six weeks. Cash cattle markets remain very quiet Monday morning. This lack of activity is not surprising as feeders and packers are assessing the current market situation and likely will not show much interest until midweek or later. There will be increased focus on the weighted average prices released later Monday morning for last week's trade volume and price direction. Given the softness in futures trade and lack of support from last week's Cattle on Feed report, cash cattle markets could remain lackluster at best, with potential further price erosion by the end of the week. 

Monday morning's boxed beef prices are mixed in light trade, with choice cuts $0.76 lower at $302.56 and selects up $0.52 at $275.05 on a total count of 44 loads. Dow Jones estimated Friday's cattle slaughter at 120,000, steady with a week ago -- 5,000 more than year ago levels.

FEEDER CATTLE:

Feeder cattle futures have not taken kindly to the larger-than-expected increase in feeder cattle placements during August seen in Friday's Cattle on Feed report. Not only did feeder cattle placements come in well above analyst estimates, but placements were 2% ahead of the already large placement last year. Feeder cattle placements during August were the largest August placement since the series began and the largest monthly placement since last November. Placements are expected to follow seasonal patterns with increased movement to feed yards through the next few months. But the larger amount in feed yards will likely keep prices under pressure over the next few weeks. This will also lead to more market-ready cattle during early spring, which could limit overall widespread support in futures and cash markets late winter. September futures are essentially dead in the water Monday morning as traders are just waiting for these contracts to expire. But October through January futures are trading $2 to $2.50 per cwt lower at midday with no indication that any buyer support will develop in the near future. Double-digit gains in corn trade are also adding to the market pressure, quickly increasing overall production costs to any feeder cattle purchased. The CME Feeder Index was priced at $154.04 for Sept. 23.

LEAN HOGS:

Lean hog futures have moved sharply higher Monday morning with December and February contracts locked in limit gains of $4.75 per cwt following much-tighter-than-expected inventory levels in Friday's Hogs and Pigs report. With total hog inventory levels at 75.3 million head, total hog numbers have fallen 3.1 million head from year ago levels. This pullback in production levels is much more aggressive than the market was expecting, creating price rallies Monday morning. Although a portion of the bullishness has already been factored into the market over the last week, the report still took nearly everyone off guard, and resulted in aggressive triple-digit gains in all contract months. December and February futures are the contracts where the tight supplies will be most evident, leading traders to push prices to daily limits within the first two hours of trade. If either one of these contracts closes locked in limit gains Monday, this will allow for the entire complex to trade with expanded trade limits of $7 per cwt Tuesday. This could create further volatility in the market, which is currently being driven by emotion. Cutouts are up $5.59 at $116.36 Monday morning on 154.95 loads. Negotiated hog prices are $0.80 lower at $76.13 per cwt on 4,145 head. The swine/pork market formula price is listed at $92.23 per cwt. Dow Jones estimated Monday's hog slaughter at 475,000 -- steady with a week ago and 15,000 less than year ago levels. The CME Lean Hog Index is estimated at $91.47 for Sept. 23.

Monday Morning Livestock Market Update - Futures Will React to Report Numbers

GENERAL COMMENTS:

It will be an interesting day for the cattle markets due to the Cattle on Feed report showing on-feed numbers higher than estimated and at the second highest numbers recorded for the month of September. Feeder cattle placement were also bearish and above trade estimates, adding to the bearishness. Some support might be seen from slightly better marketings, but that may not carry much weight. How much of this has already been factored in with the large decline since the August report, remains to be seen. Traders may feel that futures are already in line with the market. Boxed beef prices continued lower on Friday with choice down $2.28 and select down $0.46. Cash trade will be quiet Monday, but with lower boxed beef and the bearishness of the report, it is unlikely packers will be aggressive buyers this week.

It will be an interesting day for hogs due to Hogs & Pigs report being considered as bullish with both total hog numbers and those kept for marketing below year-ago levels and trade estimates. This is somewhat bullish for the market. However, some of this may have already been factored in with the recent price increase of futures. There was a huge separation of October futures from the rest of the complex on Friday as futures moved closer to cash. Later contracts may move higher based the report showing tighter hog numbers continuing through the end of the year. Cash was finally higher on the National Direct Afternoon hog report posting a gain of $0.40. Cutouts made a huge jump of $6.48 on Friday.

	BULL SIDE		BEAR SIDE
1)	Cattle futures could find support due to the already low prices over the past month. Now that traders know the numbers, a retracement could take place.	1)	The Cattle of Feed report was considered bearish and could push futures down to retest the recent lows.
2)	Marketings were on par with last year, indicating strong demand continues. Lower beef prices should improve product movement.	2)	Steady to lower cash cattle trade last week and declining boxed beef does not provide much hope for a better week.
3)	October hogs made a huge jump to narrow the gap between it and cash. This should continue as it needs to converge over the next two weeks.	3)	Hog futures may have already factored in the friendly Hogs & Pigs report leaving little upside potential left for the time being.
4)	The bullish Hogs & Pigs report should generate buying interest and short-covering Monday pushing futures higher.	4)

Friday Closing Livestock Market Update - Larger Than Expected Cattle on Feed Numbers

GENERAL COMMENTS:

From Friday to Friday, livestock futures scored the following changes: October live cattle up $0.13; December live cattle up $0.63; September feeder cattle off $0.25; October feeder cattle up $0.97; October lean hogs up $1.55; December lean hogs up $1.75

Livestock trade remained generally sluggish through most of the Friday session with traders more focused on outside market moves and the afternoon reports. Both monthly cattle on feed and quarterly hogs and pigs reports were released Friday afternoon, making it a huge report day for the livestock complex. Cattle numbers came in higher than expected, while hog inventory levels were well short of pre-report expectations. This is likely to create moderate market shifts Monday morning with price separation between the hog and cattle markets likely also playing into the overall market volatility possible next week. Hog prices moved higher on the National Direct Afternoon Hog Report in light trade, adding $0.40 with a weighted average of $76.93 on 2,780 head. December corn is down 2 1/2 cents per bushel and December soybean meal is down $1.10 per ton. The Dow Jones Industrial Average is down 10 points and NASDAQ is down 39 points.

LIVE CATTLE:

Cattle on feed numbers in Friday afternoon's report posted higher than expected cattle in the nation's feedlots, creating the potential for further market pressure early next week. Total cattle on feed is listed at 11.23 million head. This is 1% below year -go levels, but still well above pre-report estimates. This total puts this year's Sept. 1 inventory level at the second highest September total on record, only following 2020's pandemic impacted inventory levels. All trade was done and markets closed before the report was released, but traders posted light to moderate pressure in all contract months as traders tried to adjust positions ahead of the report. October live cattle closed $0.30 lower at $122.92, December live cattle closed $0.47 lower at $128.15 and February live cattle closed $0.32 lower at $132.62. Cash cattle trade is expected to be essentially done for the week with very little if any activity seen Friday afternoon. There is still a chance that a few cattle may be sold late afternoon following the cattle on feed report. But for now, it appears that both packers and feeders are comfortable with the amount of cattle sold and willing to hold out until next week before doing any additional significant trade. Cattle traded earlier in the week at $123 to $124 per cwt live basis in the South, and mostly $198 dressed in the North. This is generally steady with last week in the South and $1 per cwt lower in the North. Asking prices on cattle still left on showlists Friday afternoon remain at $124 live and $198 dressed.

Friday's slaughter is estimated at 110,000 head, 8,000 less than a week ago and 3,000 less than year ago totals. Weekly totals are listed at 641,000 head including Saturday's expected kill of 54,000 head, 16,000 less than a week ago and 14,000 head less than year-ago levels.

Boxed beef prices closed lower: choice down $2.28 ($303.32) and select down $0.48 ($274.53) with a movement of 104 loads (49.15 loads of choice, 12.06 loads of select, 17.95 loads of trim and 25.02 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. Midweek trade set the tone for steady to lower cash cattle prices. Monday activity should remain typically sluggish with bids and asking prices likely not being seen until late Tuesday or Wednesday next week. With packers still buying most negotiated cattle for delivery in two to three weeks, the need for immediate cattle is sustaining a market for buyers through late September.

FEEDER CATTLE:

Feeder cattle futures remained mixed at the end of the session with most contracts posting moderate gains. The focus in the cattle complex has moved to the anticipation of the afternoon cattle on feed report, which kept prices moving within a mixed trading range through the session. Consistent late day buyer interest moved into October through April futures with prices 40 to 55 cents per cwt higher. Although spot September contracts posted the only loss, this move is likely due more to limited trade volume than a fundamental change in market direction. Next week traders will not only be focused on cattle placements in the report, but also CFTC data concerning noncommercial trade involvement through the last week. Feeder cattle placements during the month of August posted 2.1 million head of cattle moving into feed yards. This is 2% above year-ago levels, and well above analyst estimates for placements for the month. Not only is this significantly above year-ago levels, but it represents the largest monthly placement level since last November and largest August placement since the series began. The expectation is that placements over the next two months will continue to increase along historical patterns, potentially adding long term pressure to the market. September feeders closed $0.27 lower at $154.62, October feeders closed $0.5 higher at $157.35 and November feeders closed $0.47 higher at $158.57. The CME Feeder Cattle Index for Sept. 23: $154.04, down $0.45.

LEAN HOGS:

Lean hog futures regained moderate to strong market support at the end of the week. October contracts, which failed to follow the rest of the complex aggressively higher Thursday, made up ground, posting a $2.52 per cwt rally. This spot month contract was the only lean hog contract to post triple-digit gains, with the rest of the market holding light to moderate spillover support. Traders were slightly hesitant to post aggressive market support as many were waiting to determine the results from the afternoon hogs and pigs report. Hog and pig inventory levels on Sept. 1 are 4% lower than year-ago levels. Although inventories have grown 900,000 head since June 1, the overall number of hogs is well below estimated levels and likely to spark further market support early next week. Farrowing intentions appear to be slowly growing, but not enough to make significant impact in the short term. October lean hogs closed $2.52 higher at $87.27, December lean hogs closed $0.30 higher at $76.80, and February lean hog futures closed $0.20 higher at $79.67. Pork prices surged higher Friday afternoon following aggressive double-digit gains in ham and loin cuts. Pork cutouts totaled 360.59 loads with 327.89 loads of pork cutouts and 32.70 loads of trim. Pork cutout values: up $6.48, $110.77. Friday's slaughter is estimated at 472,000 head, 2,000 more than a week ago and up 10,000 from a year ago. Week to date totals of 2.578 million head including Saturday's estimated runs of 237,000, up 41,000 head from week ago levels. The CME Lean Hog Index for Sept. 23: down $0.42, $91.47.

MONDAY'S CASH HOG CALL: Steady. The strong late week support in lean hog futures and support in pork cuts over the last couple of days is likely to help bring some much-needed stability to cash hog prices through the last week of September.

Friday Midday Livestock Market Summary - Trade Mixed, Quiet

GENERAL COMMENTS:

Morning activity has been generally quiet in livestock futures Friday, as traders focus on balancing previous market shifts with afternoon report expectations. This is the last chance for traders in cattle and hog markets to adjust to expectations ahead of the Cattle on Feed and Hogs and Pigs reports, both released after closing bell Friday afternoon. Early expectations are not pointing to any major changes from year ago levels, which has allowed markets to remain generally quiet Friday morning. December corn is down 3 3/4 cents per bushel and December soybean meal is down $2.00 per ton. The Dow Jones Industrial Average is up 3 points with Nasdaq down 32 points.

LIVE CATTLE:

Moderate pressure in live cattle futures is seen Friday morning as traders adjust positions ahead of the weekend and upcoming Cattle on Feed report. Pre-report estimates point to a 1.9% drop in on-feed numbers from year ago levels. This estimate would account for 11.17 million head of cattle in feed yards (1,000 head or greater size) at the first of September. A total in this area would mean increased on-feed numbers from Aug. 1 and indicate the seasonal low has already been set. This could help focus market attention on breaking away from counter-seasonal market shifts seen during 2020 due to the COVID pandemic. The outlook for long-term supply tightness continues, but without a significantly lower on-feed number Friday afternoon, price levels are not likely to remain extremely bullish following the report. Cash cattle activity remains extremely quiet Friday morning with the bulk of business done Wednesday. There still may be some late-week clean-up trade, especially in the North during the day Friday. But unless significant changes are seen in the market in the next couple hours, the tone of the market appears to have already been set. Trade in the North on a dressed basis developed from $193 to $198 per cwt with most trade seen at $198 per cwt. This is generally $1 per cwt lower than last week's weighted average. Live trade in the South developed at $123 to $124 per cwt, which is steady with last week. Asking prices on cattle still left on showlists remain at $198 in the North and $124 live basis in the South. 

Friday morning's boxed beef prices are mixed in light trade, with choice cuts $1.31 lower at $304.29 and selects up $1.36 at $276.35 on a total count of 63 loads. Dow Jones estimated Friday's cattle slaughter at 116,000 -- 3,000 less than a week ago and 4,000 more than year ago levels.

FEEDER CATTLE:

Narrow losses have trickled into feeder cattle trade with the general tone extremely subdued in front of the Cattle on Feed report. Light to moderate pressure in corn and grain markets is limiting downside market shifts in feeder cattle compared to live cattle, although the move in outside markets is not enough to stimulate widespread buying at this point. Trade is likely to hover within a narrow range through the rest of the session, although the limited volume could still bring an outside chance of last-minute market swings just before closing bell. The focus on this afternoon's Cattle on Feed report continues to keep traders interested, although at this point most traders have already adjusted positions according to where they feel the report will lead the market in the near future. Trader estimates point to a 1% drop in placements during August compared to 2020. This estimate has the widest range of all Cattle on Feed categories, which could bring additional volatility to the market and less confidence in where report numbers will land. The CME Feeder Index was priced at $154.49 for Sept. 22.

LEAN HOGS:

Lean hog futures have quickly settled down following Thursday's aggressive triple-digit rally. Morning trade has held a sideways pattern with prices mixed in a narrow range from 20 cents lower to 25 cents higher at midday. The lack of significant shifts in the market is due to focus on limited trade direction in most commodities at the end of the week following what has been a very volatile week, driven by turbulent moves in the stock market. Traders continue to focus on the upcoming Hogs and Pigs report, which will be released at 2 p.m. CDT. The expectation overall hog numbers will see a 2% reduction from year-ago levels. A move in this range should not be a significant market mover as traders continue to focus on slightly lower hog herd sizes until the middle of 2022. Significant shifts in farrowing intentions through the end of the year will likely be an indicator of any sizable market adjustments in the near future. Cutouts are up $9.57 at $113.86 Friday morning on 258.15 loads. Negotiated hog prices are $0.21 higher at $76.93 per cwt on 2,780 head. The swine/pork market formula price is listed at $89.58 per cwt. Dow Jones estimated Friday's hog slaughter at 472,000 -- 1,000 less than a week ago, while 10,000 more than year ago levels. The CME Lean Hog Index is estimated at $91.47 for Sept. 23.

Friday Morning Livestock Market Update - Mixed Trade Ahead of the Reports

GENERAL COMMENTS:

Cattle futures closed mixed, but higher in most contracts. Price strength during the day gave way as traders decided to even up positions before the final trading day ahead of the Cattle on Feed report. Cash cattle trading in line with Wednesday provided little to get excited about as cattle in the South traded steady with last week while the average trade in the North was $1.00 lower. There may be some cash traded Friday, but both packers and feedlots may wait for the results on the Cattle of Feed report to be released after the close of trading. The average trade estimate for on-feed numbers is 97.9% or 11.155 million head. In order for cattle to move higher and regain some of the losses since the previous report, on-feed numbers may need to be lower than anticipated on this report. Slowing demand and lower beef prices may offset some bullishness that could be seen from the numbers that will be released. Boxed beef continues to fall with choice cuts down $2.23 and select cuts down $0.51 Thursday.

Hogs moved substantially higher with December showing the greatest gain. October's gain was more subdued as it moves nearer expiration and will need to move more in line with cash. Neither cash nor cutouts were supportive to the move Thursday with most strength stemming from strong financial markets as well as positioning ahead of the Hogs & Pigs report Friday. Price on the National Direct Afternoon report was down $0.63 while cutouts fell $2.63. This was not a good combination to provide support. The average trade estimate for all-hogs is 98.3% of last year. Kept for breeding at 98.8% and kept for marketing at 98.3%. Saturday slaughter is estimated at 235,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle are trying to build an uptrend, but whether it will continue will be based on the how trades view the numbers on the Cattle of Feed report.	1)	Cattle may see limited price movement Friday as traders seem to be positioned ahead of the report.
2)	Futures held the lows of two weeks ago and may be building solid support under the market. Tighter cattle supplies are expected through the end of the year and into next year.	2)	It may take lower on-feed or placement numbers for cattle in order to move futures above the recent sideways trading range.
3)	The solid move higher in hog futures confirmed a solid base has been established with short-covering in anticipation of a friendly report Friday.	3)	Hog futures may have a difficult time moving much higher ahead of the report as short-covering may have run its course.
4)	Stocks of pork bellies were down 37% from July and down 44% from last year, according to the August Cold Storage report.	4)	Cash weakness and lower cutouts indicates slower demand. The bounce of futures Thursday may be short-lived.

Thursday Closing Livestock Market Update - Lean Hog Futures Surge to Two-Week Highs

GENERAL COMMENTS:

Active gains redeveloped in lean hog futures following widespread outside market support Thursday. December lean hog futures led the entire livestock complex higher, closing $3.12 per cwt higher, moving to the highest price in two weeks. The ability to hold these gains through the end of the week is likely to create additional underlying support and spark renewed interest in commercial and noncommercial buying through the end of September. Cattle futures held moderate gains most of the session, but a late day pullback in feeder cattle seemed to slowly limit optimism in all cattle futures. Traders are eagerly waiting for both the cattle on feed report and hogs and pigs report, which will be released Friday afternoon. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, falling $0.63 with a weighted average of $76.53 on 4,855 head. December corn is up 3 3/4 cents per bushel and December soybean meal is down $1.70 per ton. The Dow Jones Industrial Average is up 506 points and NASDAQ is up 156 points.

LIVE CATTLE:

Live cattle futures trickled higher in most contracts Thursday as early buyer support slowly trickled out of the market as buy orders seemed to dry up as the day continued. Spot October live cattle contracts closed lower, although the rest of the market held light to moderate gains. Traders remain focused on the ability to hold prices above last week's support levels, but limited interest is seen through the complex ahead of the cattle on feed report. Traders may continue to adjust positions Friday morning in front of the afternoon report, but unless report totals come well off estimated levels, market moves may be limited. October live cattle closed $0.05 lower at $123.22, December live cattle closed $0.07 higher at $128.62 and February live cattle closed $0.35 higher at $132.95. Cash cattle trade was quiet Thursday following light to moderate activity which took place through the day Wednesday. It is likely that most needed trade is already in the books, but it would not be surprising if a few additional clean-up deals took place during the day Friday. Cattle traded at $123 to $124 per cwt live basis in the South, and mostly $198 dressed in the North. This is generally steady with last week in the South and $1 per cwt lower in the North. Asking prices on cattle still left on showlists remain at $125 live and $200 dressed.

Thursday's slaughter is estimated at 114,000 head, 6,000 less than a week ago and 8,000 less than year ago totals. Weekly totals are listed at 477,000 head, 2,000 more than a week ago and 6,000 head less than year ago levels.

Boxed beef prices closed lower: choice down $3.54 ($307.83) and select down $2.51 ($275.50) with a movement of 186 loads (102.40 loads of choice, 52.13 loads of select, 3.14 loads of trim and 28.22 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Trade is expected to be essentially finished for the week, but any trade that may trickle into the market Friday will likely be in line with previous price levels. Both sides seem very willing to hold out until next week and after the cattle on feed report before stepping back into the market.

FEEDER CATTLE:

Despite early market support, buyer interest faded in the last couple hours of trade Thursday. This allowed for mixed price levels across the complex, adding concern that gains over the last couple of days may be under pressure. Traders will likely be adjusting positions Friday morning in front of the upcoming cattle on feed report. Although slight reductions are expected, traders are less certain of overall placement totals and how this will be viewed by the market. Cattle placements during the month of August are estimated at 99.5% year ago levels. Analysts ranges for placements remain wide, from 95% to 102.8% of last year, creating less agreement of just where final numbers may land. This could create a major shift in price levels early next week. Feeder cattle sales at the Torrington, Wyoming, sale Thursday posted trade generally $3 to $6 per cwt lower than last week. While sales in Farmington, Missouri, were mixed from $6 lower to $2 higher. September feeders closed $0.10 higher at $154.90, October feeders closed $0.82 lower at $156.85 and November feeders closed $0.12 lower at $158.10. The CME Feeder Cattle Index for Sept. 22: $154.49, up $0.92.

LEAN HOGS:

Lean hog futures rallied higher following additional outside gains in other commodity markets and stock markets. Following active liquidation over the last two weeks, a combination of commercial and noncommercial buyer support flooded the market. December futures led the shift higher, moving to two-week high, and creating the potential for additional longer-term support at the end of the week. Traders are not only focusing on short-term market shifts, but Friday's hogs and pigs report is expected to show a 2% decline in hog numbers as of Sept. 1. This could help regain underlying buyer interest as traders continue to limit hog herd size through the end of the year and early 2022. October lean hogs closed $0.90 higher at $84.75, December lean hogs closed $3.12 higher at $76.50, and February lean hog futures closed $2.95 higher at $79.47. Pork prices shifted lower once again Thursday afternoon following a pullback in ham cuts. Pork cutouts totaled 280.20 loads with 240.47 loads of pork cutouts and 39.73 loads of trim. Pork cutout values: down $2.63, $104.29. Thursday's slaughter is estimated at 475,000 head, 13,000 more than a week ago and up 5,000 from a year ago. Week to date totals at 1.87 million head, down 13,000 head from week ago levels. The CME Lean Hog Index for Sept. 22: down $0.76, $91.89.

FRIDAY'S CASH HOG CALL: Steady to $1 lower. Despite aggressive gains in futures trade, lack of uniformity in cash markets is likely to keep prices steady to weak through the end of the week.