GENERAL COMMENTS:
Universal pressure is seen through the entire livestock complex as traders quickly back away from support seen earlier in the week. The combination of widespread outside market losses and end-of-week position adjustments has allowed for most cattle and hog futures to trade 50 cents to $1 per cwt lower Friday morning. Without a significant shift in outside market moves, it is likely prices will continue to hover in this lower region through the end of the session. Given the volatility in both cattle and hog markets over the week, a late-week correction of this level is not unexpected or necessarily indicating future market moves. December corn is down 4 1/4 cents per bushel and December soybean meal is down $1.10 per ton. The Dow Jones Industrial Average is down 195 points with Nasdaq falling 147 points.
LIVE CATTLE:
Moderate price weakness is seen in live cattle futures Friday with losses from 60 to 80 cents per cwt at midday. Noting the strong upward market shift in futures earlier this week, all contracts are holding well above support prices set Monday. October futures are trading above $123 per cwt at midday, which comfortably remains above early week lows of $122.27 per cwt. The ability to hold prices above these levels over the next couple of weeks should spark underlying technical and fundamental buyer support. Traditionally, prices bottom out in the week or two following Labor Day, with moderate to strong strength building through the end of the year. Moves in cattle trade appear to be on track with previous market trends, but outside market uncertainty and concerns of a cooling economy and increased COVID could weaken trader optimism in the near future. Cash cattle trade remains silent Friday morning with bids very scarce and asking prices not budging from earlier price points. Although a few clean-up deals may take place through the end of the day, overall cash cattle trade is likely to be essentially finished for the week. Both sides appear to be more than willing to hold out on any significant additional deals until next week. Asking prices on cattle still on showlists remain at $124 and higher live and $200 and higher dressed. Trade Wednesday set the tone for the week with live trade mostly $123 ton $124 per cwt and Northern dressed deals are mostly $200. Prices are generally steady to $1 per cwt lower, but the weighted average prices will be released Monday, giving a better idea where overall sales prices stacked up with the previous week.
Friday morning's boxed beef prices are mixed in light to moderate trade, with choice cuts $1.92 lower at $316.08 and selects up $2.27 at $282.54 on a total count of 86 loads. Dow Jones estimated Friday's cattle slaughter at 119,000 -- 1,000 higher than a week ago and 7,000 more than year ago levels.
FEEDER CATTLE:
Widespread pressure in nearly all markets is putting additional weight on feeder cattle Friday morning. Volume has remained generally quiet through the first couple hours of trade, but September and November futures are holding triple-digit losses. Continued pressure in live cattle trade is also adding questions of further short-term price support in feeder cattle trade as late 2021 and most 2022 contracts have now taken out support levels which developed earlier in the week. Even though September and October futures are currently holding above these price support levels, the concern that renewed market pressure will continue to develop in feeder cattle trade is limiting optimism through the next several weeks across both the feeder and live cattle futures. The CME Feeder Index was priced at $154.02 for Sept. 15.
LEAN HOGS:
Following the aggressive market rally over the past two trading sessions in nearby lean hog futures, traders have focused on adjusting positions ahead of the weekend, with moderate losses seen in all traded lean hog contracts through Friday morning. October futures are leading the trend lower with a 90-cent loss. Even with the current pressure in the market, nearby futures have seen significant and impressive market rallies through the week. Limited fundamental direction is likely to be seen in any livestock trade with outside market direction the biggest mover of the entire hog complex. Traders next week will likely get back into the groove as fundamental market indicators will be front and center as traders look for increased direction from cash hog trade and pork values during the last half of September. Pork cutout prices surged higher following aggressive double-digit gains in ham and belly cuts. Ham prices increased $20.82 per cwt on the morning report with belly cuts surging $15.88 per cwt, heavily impacting carcass values. Cutouts are up $6.13 at $112.10 Friday morning on 218.41 loads. Negotiated hog prices are $0.04 lower per cwt with a weighted average price of $81.57 per cwt on 3,905 head on the National Direct Morning Hog Report. The swine/pork market formula price is listed at $92.53 per cwt. Dow Jones estimated Friday's hog slaughter at 473,000 -- 2,000 less than week ago and 10,000 more than year ago levels. The CME Lean Hog Index is estimated at $94.26 for Sept. 16.
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