GENERAL COMMENTS:
From Friday to Friday, livestock futures scored the following changes:
Oct live cattle off $1.38, Dec live cattle off $2.70, Sep feeder cattle off $4.22, Oct feeder cattle off $4.75, Oct lean hogs off $7.13, Dec lean hogs off $6.
Triple-digit losses in lean hog and feeder cattle futures stole the attention of all livestock traders Friday. Nearby lean hog futures led the complex lower with $3-per-cwt losses in all nearby contracts. The hog market, which to this point had held above technical resistance levels, quickly crashed through these price levels, creating further concerns that additional widespread liquidation may continue next week. Feeder cattle futures were unable to gain any momentum despite the spot October live cattle contract trading higher through the morning. The overall bearish tone of the market eventually pulled all cattle futures lower late Friday. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, falling $0.56 with a weighted average of $85.86 on 5295 head. December corn is up 7 1/2 cents per bushel, and December soybean meal is up $4.60 per ton. The Dow Jones Industrial Average is down 81 points, and the NASDAQ is down 26 points.
LIVE CATTLE:
Even though live cattle futures closed moderately lower in all contract months, the live cattle complex seemed to be the bright spot of livestock markets Friday. October contracts posted narrow to moderate losses early in the session, seemingly keeping further market bearishness from flooding through the market. Continued concerns of further beef market erosion, as well as aggressive downward market shifts in feeder cattle trade over the last three weeks, has allowed for increased liquidation to develop across the entire market. October live cattle closed $0.32 lower at $123.42, December live cattle closed $0.57 lower at $128.22, and February live cattle closed $0.87 lower at $132.02. Cash cattle trade appears to be finished for the week with activity very quiet Friday afternoon following light to moderate trade seen Wednesday and Thursday in most areas. There could be a few reports of clean-up activity seen in a few areas, but the tone of the market has been set, leaving both sides willing to wait until next week before testing market levels once again. Trade through the week was seen at $123 to $124 per cwt live in the South, which is steady to $1 per cwt higher than last week's average. Northern trade posted a wide range from $197 to $203, with most trade $200 to $203 per cwt. These prices range from $2 lower to $1 higher than last week's average. Delayed delivery dates were evident on much of the Northern trade, potentially creating the wide price range and possible more volatility in the coming weeks.
Friday's slaughter is estimated at 121,000 head -- 7,000 more than a week ago and 2,000 more than a year ago. Week-to-date slaughter is estimated at 577,000 head following a strong Saturday run, 4,000 below year-ago holiday schedules but 48,000 below week-ago totals. Saturday slaughter estimates are expecting 91,000 head to make up for the lost production Monday.
Boxed beef prices closed lower: choice down $5.36 ($327.22) and select down $3.08 ($293.37) with a movement of 141 loads (70.94 loads of choice, 28.89 loads of select, 26.38 loads of trim and 14.70 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Given the market volatility through the week, cash market interest is expected to remain generally quiet Monday. Feeders will continue to look for steady to firm price levels, but packer interest may not fully develop until midweek or later.
FEEDER CATTLE:
Triple-digit losses once again developed Friday as traders quickly focused on general market pressure in livestock trade as well as several outside markets. Feeder cattle futures have fallen $4 to $5 per cwt during the last week and continue to move sharply lower over the last three weeks after traders were not able to defend recent contract highs through the month of August. Although there continue to be expectations that cattle numbers will tighten over the coming months, technical pressure is keeping buyers out of the market. The growing concern about economic pressure and increased COVID restrictions will continue to add uncertainty to the market over the near future. September feeders closed $1.50 lower at $154.25, October feeders closed $1.52 lower at $157.72 and November feeders closed $2.10 lower at $159.12. The CME feeder cattle index 9/9/2021: $155, down $1.83.
LEAN HOGS:
Lean hog futures tumbled sharply lower Friday afternoon with all nearby contracts posting losses of $3 per cwt or greater by the end of the session. The combination of weakness through the entire livestock complex and weakening market trends Thursday added widespread liquidation through the entire complex. The aggressive move over the last two trading sessions not only accounted for sharp losses but quickly broke through support levels, creating technical pressure to flood back into the market at the end of the session. Little has changed fundamentally in the lean hog complex, but widespread shifts in technical market momentum could continue to show significant weakness through the entire complex. Although no significant changes were seen in pork production in Friday's WASDE report, the fact that pork production in 2022 is still expected to grow 406 million pounds from 2021 levels. This will continue to create underlying weakness in long-term price levels across the complex, although much of this production gain has already been priced into the market. October lean hogs closed $3.02 lower at $82.45, December lean hogs closed $3.37 lower at $76.10, and February lean hog futures closed $3.02 lower at $79.25. Pork prices quickly regressed following double-digit losses in ham cuts for the second day in a row. Pork cutouts totaled 306.18 loads with 275.84 loads of pork cutouts and 30.34 loads of trim. Pork cutout values: down $3.60, $105.10. Friday's slaughter is estimated at 477,000 head -- 19,000 more than a week ago and down 4,000 from a year ago. Week-to-date slaughter is listed at 2.27 million head following expected Saturday slaughter totals. It is expected that 370,000 head will move through plants Saturday to make up for losses Monday. The CME lean hog index 9/9/2021: down $0.23, $97.73.
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