GENERAL COMMENTS:
From Friday to Friday, livestock futures scored the following changes: Oct live cattle off $1.87, Dec live cattle off $2.65, Oct feeder cattle off $2.15, Nov feeder cattle off $4.53, Dec lean hogs off $4.95 and Feb lean hogs off $4.70. Sharp losses in cattle futures developed as traders tried to prepare for the afternoon Cattle on Feed report. Triple-digit losses were seen in both live cattle and feeder cattle markets, with the most significant pressure in deferred feeder cattle trade. Hog futures were unevenly mixed as traders tried to stabilize the market following earlier-week losses. On-feed numbers were fractionally below estimated levels, although the major shift was seen in lower-than-expected cattle placement numbers. This is likely to spark early week support in all cattle trade Monday morning. Hog prices moved higher on the National Direct Afternoon Hog Report in moderate trade, adding $0.20 with a weighted average of $65.63 on 6,607 head. December corn is up 5 3/4 cents per bushel, and December soybean meal is up $3.40 per ton. The Dow Jones Industrial Average is up 73 points, and the NASDAQ is down 125 points.
LIVE CATTLE:
Cattle futures ended the day sharply lower following an attempt to create stability through the first half of the trading session. Triple-digit losses are seen in December through April futures. Markets closed before the USDA Cattle on Feed report was released, which could add significant market adjustments to the complex. Although overall on-feed numbers were only slightly changed from pre-report estimates, the significant shift lower in placement levels could have a positive effect on all cattle trade early next week. The last month is evidence that markets can move quickly and aggressively without a significant number of fundamental changes, which may lead to more volatility through the end of October. October live cattle closed $0.87 lower at $124.10, December live cattle closed $1.22 lower at $128.32 and February live cattle down $1.27 at $133.50. Cash cattle activity remained quiet at the end of the week with early week activity developing and setting the tone for the week. Although there could be some late cleanup deals reported late in the day, this is not expected to change the overall steady price structure seen over the past few days. Both sides are expected to carry additional cattle and needs into next week, looking for further directions on what could be a volatile shift in futures trade.
Friday's slaughter is estimated at 112,000 head -- 5,000 more than a week ago and 8,000 more than year ago totals.
Boxed beef prices closed higher: choice up $1.16 ($281.82) and select up $0.39 ($263.11) with a movement of 91 loads (52.02 loads of choice, 18.51 loads of select, 8.14 loads of trim and 12.38 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Market activity is expected to remain quiet Monday morning as typical with asking prices and bids unavailable until later in the week.
FEEDER CATTLE:
Feeder cattle futures remained extremely weak the entire Friday trading session with triple-digit losses developing in all but spot October contracts. November through May futures posted losses of $2 to $2.50 per cwt as traders seemed focused on preparing for bad news from the afternoon Cattle on Feed report. The pre-report expectations pointed to placement levels of 101.4% of year-ago levels. The bad memory of how the September report left the market in a tailspin seemed to create further market pressure at the end of the week. When report totals were released, cattle placements were not only below expectations, but well below the overall range, with 97% placement levels seen in September. This is likely to create significant market volatility in the market as traders are likely to try to quickly catch up from the previous losses. The wide-moving and extreme shifts in feeder cattle trade over the last six weeks have created even more market volatility as traders are not only focusing on fundamental or technical market responses, but also trying to outmaneuver previous gains, leaving the market swinging higher and lower with little effort. October feeders closed $0.82 lower at $155.42, November feeders closed $2.17 lower at $156.90 and January futures closed $2.67 lower at $157.32. The CME feeder cattle index 10/21/2021: $155.11, up $1.08.
LEAN HOGS:
Lean hog futures closed mixed in a narrow to moderate trading range following light buying, which held prices higher through most of the Friday session. Traders focused on market positioning following aggressive losses through the week as the opportunity to take profits developed at the end of the week. The inability to hold February through July futures higher at closing bell will likely add further weakness to the market Monday morning. Traders continue to desperately search for support levels following a technically weak market shift over the past four sessions. Nearby lean hog futures remain above long-term support levels set in September, but these levels are certainly not out of reach, given the aggressive pressure that has developed in hog trade over the last couple of days. December lean hogs closed $0.12 higher at $73.32, February lean hogs closed $0.05 lower at $76.62, and April lean hog futures closed 0.25 lower at $80.87. Pork prices remained generally stable following mixed prices in a wide market range Friday afternoon. Pork cutouts totaled 381.40 loads with 337.90 loads of pork cutouts and 43.50 loads of trim. Pork cutout values: down $0.01, $98.27. Friday's slaughter is estimated at 476,000 head -- 6,000 higher than a week ago and 11,000 lower than a year ago. The CME lean hog index 10/21/2021: down $1.13, $83.70.
MONDAY'S CASH HOG CALL: Steady to $1 lower. Aggressive pressure in futures trade is expected to spill through the cash markets over the next week. This could lead to additional weakness for late October cash sales.
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