GENERAL COMMENTS:
From Friday to Friday: Livestock futures scored the following changes: Oct Live Cattle off $4.33 Dec Live Cattle off $4.40; Sep Feeder Cattle off $6.18 Oct Feeder Cattle off $5.95; Oct Lean Hogs off $1.15 Dec Lean Hogs off $0.95.
Trade early Friday morning in the feeder cattle complex appeared to be a repeat of Thursday's session, with active triple-digit losses flooding into the complex through the morning hours. A combination of uncertainty surrounding beef demand after Labor Day and light pre-holiday trade left markets unsupported in all cattle futures. Although feeder cattle futures led the shift lower, significant technical pressure developed in nearby live cattle futures with spot October live cattle futures closing below $125 per cwt for the first time since mid-July. This weakness going into the long holiday weekend could potentially spark follow-through pressure Tuesday when traders return to the complex. Hog futures once again remained lightly traded with limited direction as prices are mixed within a narrow but sideways trading range. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, fell $0.06 with a weighted average of $88.85 on 4,747 head. December corn is down 1 1/2 cents per bushel and December soybean meal is up $1.00 per ton. The Dow Jones Industrial Average is down 74 points and NASDAQ is up 32 points.
LIVE CATTLE:
Live cattle trade ahead of the long holiday weekend took another bearish turn with triple-digit losses developing in all contract. Spot October futures posted a $1.25 per cwt loss, closing below $125 per cwt for the first time since mid-July. The active pressure over the last week and a half has dispelled any expectations that the recent contract highs may bring additional support back into the market. Boxed beef prices have steadily declined over the last week, adding confirmation by many who wondered if the beef price would be able to hold after holiday buying had finished. Traders will closely monitor overall beef market clearance over the weekend, getting a better idea for how strong buyer support may be early next week in order to replace working stocks heading beyond summer demand. Although long-term supply tightness is still expected, there is still enough product and cattle available through the fall months to limit firm price support in nearby and deferred contract prices. October live cattle closed $1.25 lower at $124.80, December live cattle closed $1.27 lower at $130.92, and February live cattle closed $1.17 lower at $135.15. Cash cattle trade continued to slowly develop through the day Friday with dressed trade in Nebraska reported at $203 per cwt, while live trade in the South at $124 per cwt. Prices are generally unchanged from earlier week activity. Cash markets remain generally mixed from last week's average with southern trade $123 to $124 per cwt, generally steady to $1 per cwt higher than last week. Northern trade posted a wide range during the week of $197 to $205, but mostly $203 to $204 per cwt. These prices are steady to $1 per cwt lower than last week's market average. It will be interesting to see just how the five-state weighted average is adjusted once market totals are reported early next week. The overall softness in beef prices continues to limit packer interest, which could put even more pressure on cash cattle prices over the coming weeks. Asking prices on cattle still left on show lists remain at $124 per cwt in the South and $204 in the North. The bulk of trade is expected to be done, as well as most price discovery, but it would not be surprising if a few more cattle are reported sold as clean-up buying may continue.
Friday's slaughter is estimated at 114,000 head, 2,000 less than a week ago and 3,000 less than a year ago. Week to date slaughter is listed at 590,000 head, 2,000 below year ago levels.
Boxed beef prices closed lower: choice down $1.50 ($336.42) and select down $0.84 ($304.13) with a movement of 74 loads (38.89 loads of choice, 11.06 loads of select, 11.72 loads of trim and 11.93 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Limited interest is expected early next week with bids and asking prices not likely to develop until midweek. Both sides will closely be monitoring reports of beef clearance over the holiday weekend in order to get a good handle on upcoming post-holiday demand.
FEEDER CATTLE:
Feeder cattle futures tumbled aggressively once again Friday morning. This early weakness was too hard to overcome as limited trade volume kept traders on the bearish side of the market the entire session. October feeder cattle futures led the complex lower with a $2.57 per cwt loss, creating concerns that additional market weakness may continue following the weekend break. The extra day off may be good for traders to take more time to process the recent market shift and determine if the recent four-day market slide is enough of a market correction going into the heart of September. With increased feeder cattle sales and placements just around the corner, the combination of the long-term market outlook and feed prices will be a significant factor in the overall direction of feeder cattle prices. September feeders closed $1.82 lower at $158.47 October feeders closed $2.57 lower at $162.47 and November feeders closed $2.45 lower at $165.27. The CME Feeder Cattle Index for Sept. 2: $157.74, down $0.20.
LEAN HOGS:
Traders in the lean hog futures complex appeared as innocent bystanders to the carnage in the cattle markets for the second straight trading session. The lack of direction in the market was increasingly obvious with remaining 2021 contracts managed to post "sympathy losses" of 22 to 27 cents per cwt based on underlying spill over pressure from cattle trade. Other lean hog futures closed 2 to 10 cents pe cwt higher, with very limited market volume. Traders still are looking for longer-term moves from the cash hog and pork cutout markets, but the back-and-forth price shifts over the last couple of weeks has done more to keep traders absent than to stimulate directed sales activities. This market apathy could continue next week when traders return to the market Tuesday morning. October lean hogs closed $0.27 lower at $89.57, December lean hogs closed $0.22 lower at $82.10, and February lean hog futures closed $0.05 higher at $83.95. Pork prices ended the week lower with moderate price shifts seen in all primal cuts. Pork cutouts totaled 230.81 loads with 198.85 loads of pork cutouts and 31.96 loads of trim. Pork cutout values: down $1.12, $108.15. Friday's slaughter is estimated at 463,000 head, 5,000 head below a week ago and up 10,000 from a year ago. Week to date slaughter totals are listed at 2.37 million head. 42,000 above week ago levels, and 18,000 above a year ago. The CME Lean Hog Index for Sept. 2: down $1.26, $100.06.
TUESDAY'S CASH HOG CALL: Steady. Negotiated cash hog prices continue to bounce higher and lower with limited steady direction ahead of the holiday weekend. Similar market trends are expected as traders return Tuesday, leaving cash market movement uncertain and still likely volatile.
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