GENERAL COMMENTS:
Technically speaking, both the live cattle and feeder cattle contracts closed lower, which may seem like a damper for those markets. But in all actuality, with the fundamentals aligning in the cattle complex, the market seemed to have simply paused before next week where more upside is likely to be seen. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.82 with a weighted average of $61.70 on 7,471 head. December corn is up 5 1/2 cents per bushel, and December soybean meal is up $1.70. The Dow Jones Industrial Average is up 13.08 points, and the NASDAQ is up 2.24 points.
From Friday to Friday, livestock futures scored the following changes: October live cattle up $3.28, December live cattle up $0.95, November feeder cattle down $0.32, January feeder cattle down $1.20, December lean hogs up $2.75 and February lean hogs up $2.05.
LIVE CATTLE:
Friday's futures complex may have given up what the market achieved earlier in the week, but you cannot overlook the shift in leverage that is finally favoring feedlots' position. Boxed beef prices are finding support, processing speeds are clipping through packers' inventory and front-end supplies are getting cleaned up -- all of which cries for the cash cattle market to rally while the opportunity shines. December live cattle closed $1.05 lower at $129.27, February live cattle closed $1.52 lower at $134.22 and April live cattle closed $1.22 lower at $137.22. Friday's cash cattle trade was essentially nonexistent as the week's business was taken care of earlier in the week. Heading into next week's trade, the cash cattle market should be able to demand higher prices again, and the board has plenty of room for upside trading. This past week, dressed cattle traded at $196 to $200, which is $4 higher than a week ago, and Southern live cattle traded at $124 to $126, which is steady to $2 higher.
Friday's slaughter is estimated at 120,000 head -- 8,000 head more than a week ago and 5,000 head more than a year ago. Saturday's slaughter is projected to be around 60,000 head -- 7,000 head less than a week ago and 1,000 head less than a year ago. This week's total slaughter is estimated at 668,000 head, which puts the nation's total beef slaughter 3.2% ahead of where it was last year at this time.
Boxed beef prices closed higher: choice up $0.83 ($285.72) and select up $0.73 ($263.37) with a movement of 113 loads (68.73 loads of choice, 22.89 loads of select, 12.20 loads of trim and 9.23 loads of ground beef). On average throughout the week, choice cuts averaged $284.41 (up $3.71 from last week) and select cuts averaged $262.68 (up $0.69 from last week), and the week's total movement of cuts, grinds and trim totaled 677 loads.
MONDAY'S CASH CATTLE CALL: $2 higher. Feedlots played their cards wisely this past week and were able to push the market $2 to $4 higher as packers are short-bought and NEED cattle. Next week's market has the potential to be just as prosperous.
FEEDER CATTLE:
The feeder cattle complex can't help but be excited as the live cattle market made substantial gains this past week. But just as it's invigorating to see fat cattle sell $2 to $4 higher, it's equally as important to keep close tabs on the corn market's upside potential, as input costs can quickly suck away profits. The corn market's momentum wasn't quite as spunky as it was earlier in the week, but the nearby contracts' gain of $0.04 to $0.05 was enough to send feeders lower into the weekend. November feeders closed $1.07 at $156.57, January feeders closed $1.45 lower at $156.12 and March feeders closed $1.45 lower at $157.40. Heading into next week, the market will be anxious to trade higher but will need plenty of support from the live cattle market in order to do so. At Valentine, Nebraska, compared to last week, 450- to 500-pound steers traded $10 to $12 higher, 550- to 650-pound steers traded steady to $4 higher, and 450- to 550-pound heifers traded steady to $8 higher. Demand was seen all throughout the sale with plenty of buying coming from the crowd and internet. Demand was especially noted for replacement-quality females. The CME feeder cattle index 10/28/2021: up $0.92, $155.88.
LEAN HOGS:
Thursday's export report came as a shot in the arm for the lean hog market and helped the market trade higher all the way through Friday's close. December lean hogs closed $0.87 higher at $76.07, February lean hogs closed $1.47 higher at $78.67 and April lean hogs closed $1.52 higher at $82.05. As surprising as it may be, pork cuts also closed higher with the only cut that posted a lower price being the ribs, which fell $1.99 ($126.78). Cash prices still closed lower (which comes as no surprise) but overall, the market performed far better than what was anticipated for the week's outcome before Thursday's positive news came. Pork cutouts totaled 379.20 loads with 340.31 loads of pork cuts and 38.89 loads of trim. Pork cutout values: up $2.52, $96.52. The CME hog index 10/27/2021: down $0.97, $80.70.
Friday's slaughter is estimated at 474,000 head -- 6,000 head more than a week ago and 13,000 head less than a year ago. Saturday's slaughter is projected to be around 156,000 head -- 73,000 head less than a week ago and 93,000 head less than a year ago. This week's total slaughter is estimated at 2,551,000 head. Currently, year to date, that puts the country's total hog slaughter 2% behind where it was last year at this time.
MONDAY'S CASH HOG CALL: Lower. While higher prices may have been achieved through this week's close, it's unlikely that packers will see enough demand early next week to drive cash prices higher.
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