GENERAL COMMENTS:
Heading into the Labor Day weekend, cattle trade has turned bearish with October live cattle futures falling below $125 per cwt, also breaking below July lows on the October contract. Feeder cattle trade has posted $1 to $2 per cwt losses through Friday morning, trading at the lowest levels since mid-July in September and October contracts. Mixed trade is seen in lean hog futures, although limited direction is expected through the rest of the session as the lean hog complex is coasting into the holiday weekend. December corn is down 3/4 cent per bushel and December soybean meal is up $0.40 per ton. The Dow Jones Industrial Average is down 81 points.
LIVE CATTLE
Active pressure is seen in live cattle trade Friday morning with October futures posting triple-digit losses, moving below $125 per cwt for the first time since July. The weakness in the complex is a combination of light trade volume as well as concern that even further weakness will develop in beef prices following the holiday. Cattle and beef prices remain generally disconnected and may stay that way over the next few weeks, but longstanding concerns that the recent rally in beef values will not be able to hold following Labor Day has traders even more nervous of further live cattle pressure during the month of September. Cash cattle trade remains quiet Friday morning following light to moderate trade over the last two days. The bulk of the needed weekly trade is likely to already be in the books with both sides looking forward to next week's market moves. Significant focus will be placed on weekend beef clearance and how this will impact packer needs over the coming weeks. Asking prices on cattle left on show lists are listed at $124 in the South and $204 in the North.
Friday morning's boxed beef prices are mixed in light trade, with choice cuts $0.23 lower at $337.69 and selects up $1.19 at $306.16 on a total count of 41 loads.
Dow Jones estimated Friday's cattle slaughter at 116,000, up 3,000 from a week ago, and steady with year ago levels.
FEEDER CATTLE
Triple-digit losses swept through feeder cattle trade once again Friday morning. The sharp turn lower Thursday has sparked renewed market pressure as traders remain concerned about live cattle support and the recent move lower in beef values. Limited end of the week trade ahead of the long weekend is adding to the overall volatility in the market, leaving prices generally unsupported due to lack of trade interest. September futures have moved below $160 per cwt midday. A weekly close below this level would likely create growing pressure through the complex when traders return early next week. The CME Feeder Cattle Index was priced at $157.94 for Sept. 1.
LEAN HOGS
Limited market direction is seen in lean hog futures Friday morning as traders seem to be comfortable with the current market pattern before the long weekend. The swift pressure in cattle trade and end of the week softness in stock markets has allowed traders to focus on other markets other than the hog complex for the time being. Nearby lean hog futures seem to be unable to break out of the recent sideways trend, which may continue to add uncertainty to the complex over the next couple of weeks. Cutouts are up $6.78 at $116.05 Friday morning on 122.42 loads. Negotiated hog prices are $1.67 lower per cwt with a weighted average price of $87.05 per cwt on 3,464 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $98.02 per cwt. Dow Jones estimated Friday's hog slaughter at 463,000, 4,000 higher than a week ago, while 11,000 more than year ago levels. The CME Lean Hog Index is estimated at $100.06 for Sept. 2.
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