GENERAL COMMENTS:
From Friday to Friday, livestock futures scored the following changes: Oct live cattle up $5.18, Dec live cattle up $5.05, Oct feeder cattle up $6.72, Nov feeder cattle up $8.25, Oct lean hogs off $2.05 and Dec lean hogs off $3.68. Trade Friday turned into a mixed bag of market adjustments and late-week positioning in not only the livestock market, but most commodity and financial markets as well. Mixed trade in live cattle and lean hog futures kept traders uncertain of where markets would land at the end of the day, but the light volume and generally tight trading ranges seemed to create little concern that wide-ranging market swings would redevelop. Over the last two weeks, cattle and hog futures have posted extremely wide and volatile market swings. It appears that this volatility has run its course, helping traders return to more fundamentally based trade decisions early next week. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.92 with a weighted average of $69.26 on 8,199 head. December corn is down 3 1/2 cents per bushel, and December soybean meal is down $0.60 per ton. The Dow Jones Industrial Average is down 8 points, and the NASDAQ is down 74 points.
LIVE CATTLE:
Active gains quickly moved into live cattle futures trade following aggressive gains in feeder cattle trade. October live cattle futures rallied $1.45 per cwt, moving above $125 per cwt, while December contacts topped $130 per cwt for the first time in over a month. Following significant pressure and uncertainty, live cattle futures prices are now back above levels seen before Labor Day. In some ways, the month of September seemed to be more of a "throwaway" month for the cattle market, which typically bottoms around Labor Day and then continues to post gains through the end of the year. With the month of October well underway, it is possible that cattle trade may try to make up lost ground over the near future. Even though overall momentum and buyer support is returning to the market, the reality that cattle numbers remain higher than expected and larger than year-ago levels could keep prices from continuing higher long term. October live cattle closed $0.30 higher at $125.57, December live cattle closed $0.15 higher at $130.25, and February live cattle closed $0.15 higher at $134.80. Cash cattle trade remained quiet through the day Friday with just a handful of clean-up deals reported in Colorado at $124 per cwt. This trade is steady with earlier-week activity and follows the steady tone seen during the last few days. Trade started Wednesday with moderate to active business being done at generally steady money from last week's totals. Trade around $124 live and $196 dressed is likely to be the focus early next week when average prices are listed. The hope and expectation that trade will have stabilized this week is creating optimism that higher cash prices will develop through the rest of October.
Friday's slaughter is estimated at 116,000 head -- 9,000 more than a week ago and 4,000 more than a year ago. Year-to-date slaughter totals, including Saturday's expected 58,000 head, are at 25.63 million head. This is 820,000 ahead of a year ago.
Boxed beef prices closed lower: choice down $2.03 ($283.27) and select down $1.70 ($262.74) with a movement of 104 loads (40.37 loads of choice, 23.62 loads of select, 24.63 loads of trim and 15.66 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. With most trade direction taking place through the middle of the week, both sides are actively looking for additional direction and potential support for next week's buying needs. Limited interest is expected Monday, pushing any cash market activity off until likely Wednesday or later.
FEEDER CATTLE:
Moderate pressure Friday pushed all feeder cattle futures contract months lower, but still left the entire complex focused on recent aggressive buyer support and renewed market momentum heading into the weekend. Limited trade volume at the end of the week allowed for lower prices at closing bell. This should not be seen as a signal that the recent market rally is in danger, but rather more that traders are confirming the recent support by taking profits at the end of the week. October futures led the market lower, but it is helpful to remember that prices are still the highest they've been since early September and, until today, have rallied $10 to $12 per cwt without a hint of price correction. Traders are expected to try to establish firm support levels near the current market range, as market stability is being sought through the upcoming sessions. October feeders closed $0.87 lower at $159.47, November feeders closed $0.45 lower at $161.15 and January futures closed $0.12 lower at $161.12. The CME feeder cattle index 10/7/2021: $154.57, up $0.77.
LEAN HOGS:
Lean hog futures moderated Friday as traders are focusing less on the wide market swings over the past few days and more on setting the market up for more fundamentally based trade activity through the rest of October. October futures regained limited market support. The rest of the complex was hovering within the current trading range, but still gave back early support as buyers seemed to slowly trickle out of the market as the session continued. As much as we want to talk about the lower prices Friday and the downward move in the market over the last week, it is essential to focus on where the market is compared to last month, and even the last two weeks. Given the expectation of tighter supplies and the economic market uncertainty in the last few weeks, firm support has returned to the lean hog complex, focusing on additional potential gains in the near future. October lean hogs closed $0.40 higher at $90.25, December lean hogs closed $0.52 lower at $81.50, and February lean hog futures closed $0.47 lower at $83.87. Pork prices slipped lower with pressure in nearly all primal cuts Friday. Pork cutouts totaled 280.54 loads with 252.30 loads of pork cutouts and 28.23 loads of trim. Pork cutout values: down $5.27, $106.99. Friday's slaughter is estimated at 477,000 head -- 10,000 more than a week ago and down 8,000 from a year ago. Week-to-date totals, including Saturday's estimated 224,000 head, are at 2.59 million head. The CME lean hog index 10/7/2021: down $0.64, $91.95.
MONDAY'S CASH HOG CALL: Steady. Continued softness in cash cattle and wholesale pork values during the week, as well as the ability for packers to gain access to needed hogs to keep slaughter numbers elevated, will limit the upside potential for cash hog values early next week.
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