Thursday's focus mainly landed on the lean hog market where, after a brutal early part of the week, Thursday's export report helped boost the market's moral and led prices higher. Meanwhile the live cattle contracts may have closed lower, but market fundamentals are still aligning for a strong live cattle market in the weeks to come. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.67 with a weighted average of $62.52 on 9,457 head. December corn is up 5 1/2 cents per bushel and December soybean meal is steady. The Dow Jones Industrial Average is up 239.79 points and NASDAQ is up 212.28 points.
LIVE CATTLE:
It may not have been as exhilarating of a day for the live cattle contracts as the past two were, but fundamentals are getting brighter and brighter for this market. Thursday's slaughter was only expected to be 120,000 head, but by the day's end, projections shifted and Thursday's estimated slaughter is at 122,000 head again. With cash prices higher, packers having bought a significant number of cattle, and processing speeds clipping right along -- front-end supplies are getting worked through and feedlots are understanding that if they play their cards right, leverage should be in their hands in no time. December live cattle closed $1.25 lower, at $130.32, February live cattle closed $1.20, lower at $135.75 and April live cattle closed $0.92 lower, at $138.45. There wasn't much cash cattle trade reported Thursday afternoon as the bulk of this week's trade is already done. Thursday's slaughter is estimated at 122,000 head -- 2,000 head more than a week ago and 11,000 head more than a year ago.
Thursday's actual slaughter data shared that for the week ending Oct. 16, cattle slaughter totaled 643,134 head. Both steer and heifer weights were up 1 pound from the week before (steers 922 pounds, heifers 840 pounds), but steers are running 7 pounds less than what they were a year ago, and heifers are 10 pounds lighter than what they were on average last year.
Beef net sales of 19,200 mt reported for 2021 were up noticeably from the previous week and up 39% from the prior four-week average. The three largest buyers were South Korea (6,200 mt), China (4,500 mt) and Japan (2,800 mt).
Boxed beef prices are higher: Choice was up $1.26 ($284.89) and select up $0.95 ($262.64) with a movement of 130 loads (76.64 loads of choice, 21.53 loads of select, 13.98 loads of trim and 17.83 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. With the market already having an established market, anything that's left to trade will most likely wait until next week or trade at the week's average.
FEEDER CATTLE:
The corn market kept its momentum through the day's end and had a toll on the feeder market's productivity. November feeders closed $0.82 lower, at $157.65, January feeders closed $1.37 lower at $157.57, and March feeders closed $1.35 lower at $158.85. The retraction in the live cattle market didn't come as a surprise, given that earlier in the week the market was so aggressive, but nevertheless the lack of onward pushing from the live cattle contracts bowed negatively for feeders. At Winter Livestock in Pratt, Kansas compared to last week, feeder steers weighing 700 to 950 pounds sold steady to $2.00 higher. Steers weighing 400 to 700 pounds sold steady. Feeder heifers weighing 800 to 950 pounds sold steady to $2.00 higher. And heifers weighing 500 to 800 pounds sold steady. Slaughter cows sold steady and slaughter bulls sold $5.00 lower. The CME feeder cattle index for Oct. 27: down $1.07, $154.96.
LEAN HOGS:
Thursday was a much, much better day for the lean hog complex. Pork cutout values closed higher, and the futures market jolted higher upon seeing a strong export report. December lean hogs closed $3.22 higher, at $75.20, February lean hogs closed $2.87 higher, at $77.20, and April lean hogs closed $2.20 higher at $80.52. Regarding pork cuts, bellies endured a smoother day as they climbed $6.33 as oppose to enduing double-digit losses as they did on Tuesday and Wednesday. Chopping sideways swings are expected to continue as holiday buying begins to work its way into the market and supplies still outpace overall demand. Pork cutouts totaled 262.91 loads with 227.10 loads of pork cuts and 35.81 loads of trim. Pork cutout values: up $0.53, $94.00. Thursday's slaughter is estimated at 483,000 head - 10,000 head more than a week ago and 2,000 head less than a year ago. The CME lean hog index for Oct. 26: down $0.99, $81.67.
Thursday's actual slaughter data shared that for the week ending Oct. 16, both live and dressed weights were up for hogs. Live weights were up 1 pound to average 288 pounds, and dressed weights were up 1 pound as well to average 214 pounds. Both live and dressed weights are only 2 pounds less than what hogs were weighing a year ago.
Pork net sales of 29,500 mt reported for 2021 were up 41% from the previous week but down 1% from the prior four-week average. The three largest buyers were Mexico (16,900 mt), Japan (3,300 mt) and Canada (2,800 mt).
FRIDAY'S CASH HOG CALL: Lower. With packers having access to plenty of hogs and heading into the weekend they will most likely minimally support the cash market before the week's end.
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