From Friday to Friday: livestock futures scored the following changes: October Live Cattle: off $2.52. December Live Cattle: off $2.95. October Feeder Cattle: off $4.60. November Feeder Cattle: off $5.67. October Lean Hogs: up $5.02. December Lean Hogs: up $8.38.
Following volatility in all livestock markets during the past week, traders seemed to take a much-needed breather, with prices mixed in a narrow range in all cattle trade and most lean hog futures Friday. The break away from triple-digit price moves has more to do with end of the week positioning and a new calendar month on the books than any long-term change in traders' psychology. With cattle futures posting aggressive weekly losses in nearby live cattle and feeder cattle trade, and lean hog futures surging higher with triple-digit gains, there remains more questions about where market direction will go once additional volume returns Monday. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.86 with a weighted average of $72.92 on 6,168 head. December corn is up 4 3/4 cents per bushel and December soybean meal is down $1.80 per ton. The Dow Jones Industrial Average is up 482 points and NASDAQ is up 118 points.
LIVE CATTLE:
Live cattle futures closed mixed Friday, similar to all livestock markets, as traders seemingly took a much-needed break from the wild market swings seen during the week. The underlying tone of weak markets is still evident, but traders not only seemed to pause because of the end of the week, but the first trading day of October allowed for traders to square positions following a bearish September. Livestock trade was not the only market to back away from previous losses, as most commodities and the stock complex seemed to move away from weekly trends late Friday. Live cattle traders remain concerned about short- and long-term direction, with prices still hovering near long-term support levels with very little indication that active noncommercial buying will move back into the market. That could allow for any bearish fundamental news to add pressure to the already weak market prices. October live cattle closed $0.17 lower at $120.40, December live cattle closed $0.52 lower at $125.20, and February live cattle closed $0.62 lower at $130.02. Cash cattle markets remained quiet Friday with needed business done on Wednesday and Thursday for the week. Although overall trade is expected to be light to moderate for the week, it is expected to still be enough to keep packers positioned for the weeks ahead, as continued processing challenges will likely continue during early October. The combination of labor issues and mechanical challenges may keep overall packer numbers from moving significantly larger. Cattle sold generally steady with last week with live cattle in the South listed at $124 per cwt, while dressed cattle in the North at $196 per cwt.
Friday's slaughter is estimated at 107,000 head, 3,000 less than a week ago and 11,000 less than year ago totals. Week to date totals, including Saturday's estimated run of 57,000 head is expected to be 637,000 head. This is running 4,000 less than last week, and 27,000 head less than year ago totals.
Boxed beef prices closed sharply lower: choice down $2.62 ($292.36) and select down $4.48 ($264.84) with a movement of 114 loads (62.21 loads of choice, 22.40 loads of select, 12.20 loads of trim and 17.18 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Limited early week activity is expected Monday with bids and asking prices likely to remain undeveloped until midweek. Cash traders will continue to focus on the direction of beef values and futures trade, which may start having a significant impact on packer spending in the next couple of weeks.
FEEDER CATTLE:
Mixed trade seen in feeder cattle futures was a welcome relief to the complex Friday. Even though this kept markets from posting aggressive losses once again, little long-term hope developed at the end of the session as traders seemed more focused on limited position taking and creating early month price stability than showing signs of a longer-term market change. At best, this limited stability could help create some perspective for traders before they return to the market Monday. October live cattle futures have fallen nearly $18 per cwt from August highs, as a bearish combination of commercial and noncommercial liquidation has developed. There is very little evidence that buyers from either side of the market are willing to aggressively step back into the market just yet, which will likely create additional significant concerns for both upcoming futures trade and cash feeder cattle markets, heading into seasonal sales. October feeders closed $0.20 Higher at $152.75, November feeders closed unchanged at $152.90 and January futures closed $0.32 lower at $135.85. The CME Feeder Cattle Index for Sept. 30: $153.72, down $0.06.
LEAN HOGS:
What started off as a light to moderate late-week price pullback, as traders entered the month of October, ended as buyers slowly stepped back into the complex, pushing prices even higher for the week. December contracts led the complex higher, adding $8.38 per cwt to the market price in just one week. This volatility and market support in the lean hog complex is nothing less than incredible as prices have surged nearly $13 per cwt in the last week and a half. Even though there remains additional focus on stronger fundamental support moving back into the market, the recent market rally is apt to bring about a correction. The overall lack of strong support still seen in cash hog and pork prices is also likely to damper aggressive buying interest in the near future. It is unlikely that the market will turn bearish soon but could establish a choppy trade within or near the current market range. October lean hogs closed $0.70 higher at $92.30, December lean hogs closed $0.22 lower at $85.17,and February lean hog futures closed $0.05 higher at $87.27. Pork prices pulled back from recent gains based on strong price reductions in ham and belly cuts. Pork cutouts totaled 331.95 loads with 299.92 loads of pork cutouts and 32.07 loads of trim. Pork cutout values: down $2.90, $113.39. Friday's slaughter is estimated at 475,000 head, 3,000 more than a week ago and up 8,000 from a year ago. Week to date totals, including expected Saturday runs of 163,000 head, are at 2.52 million head. This is 54,000 head below week-ago levels, and 88,000 less than one year ago. Year to date totals are still running 1.75 million below 2020 levels. The CME Lean Hog Index for Sept. 30: up $0.40, $93.39.
MONDAY'S CASH HOG CALL: Steady to $1 higher. Market stability will continue to be the focus in cash trade as packers try to maintain strong processing schedules early next week. The gains in futures markets may still take time to develop into higher country spending.
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