GENERAL COMMENTS:
The livestock complex closed mostly lower as traders waived their white flag heading into Friday's market, seeming to be exhausted after running the contracts higher earlier in the week. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.32 with a weighted average of $123.69 on 6,089 head. December corn is up 14 1/2 cents per bushel and December soybean meal is up $5.50. The Dow Jones Industrial Average is up 424.38 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle up $2.35, October live cattle up $0.63; August feeder cattle up $0.10, September feeder cattle down $0.05; August lean hogs up $0.90, October lean hogs up $1.63; September corn up $0.30, December corn up $0.32.
LIVE CATTLE:
This past week's trade was nothing short of exhilarating and charging for the live cattle market as bulls took the lead and ran. From a rallying cash cattle market that saw substantially higher prices and big volumes traded, to a fast-running kill schedule and a futures complex that established new, three-month highs -- the market is sitting ripe to rally. One of the most impressive things about this past week's cash cattle trade is that not only were prices higher, but big volumes were traded after last week's market moved 103,000 head. It will be incredibly important to see exactly how packers bought and committed these cattle as they're undoubtedly buying in efforts to stay ahead of the market and short side its ability to continue to see these types of gains. The boxed beef market didn't perform as well as it has in past weeks but given the exciting nature that the rest of the cattle market saw, the wrinkle in box prices was overlooked. If a steady downward trend continues, then the matter will demand more attention, but with Labor Day nearing, buying will likely pick up again.
August live cattle closed $0.37 lower at $140.22, October live cattle closed $0.60 lower at $144.50 and December live cattle closed $0.45 lower at $150.62.
Friday's slaughter is estimated at 118,000 head -- 3,000 head more than a week ago and 2,000 head more than a year ago. Saturday's slaughter is projected to be around 33,000 head. This week's slaughter is estimated at 647,000 head -- 4,000 head less than a week ago and 11,000 head more than a year ago.
Friday's Imported Meat Passed for Entry into the U.S. USDA report shared that for the week fresh beef imports totaled 20,888 metric tons (mt) with Canada, Mexico and Australia being the biggest importers. Processed beef imports totaled 1,874 mt for the week with Canada, Brazil and New Zealand being the biggest importers.
Boxed beef prices closed higher: choice up $0.27 ($263.37) and select up $2.13 ($239.59) with a movement of 89 loads (49.94 loads of choice, 11.85 loads of select, 11.43 loads of trim and 16.13 loads of ground beef). Throughout the week choice cuts averaged 264.14 (down $3.44 from a week ago) and select cuts averaged $238.14 (down $2.82 from a week ago) with total movement of cuts, grinds and trim of 575 loads.
MONDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Much of next week's success will depend on how packers got cattle bought this week. If they commit most of the cattle to the deferred delivery, the cash market will likely become pressured in the following two to four weeks.
FEEDER CATTLE:
The feeder cattle market had a tough row to hoe as it wanted to trend fully higher amid a rallying and invigorating live cattle/fat cattle market. But as the corn complex traded higher throughout most of the week -- it had to balance the market's cues diligently. August feeder cattle closed $0.32 lower at $179.62, September feeder cattle closed $1.22 lower at $183.37 and October feeder cattle closed $0.85 lower at $186.00. As the heaviest-traded September contract nears resistance at $185, if next week's live cattle market is supportive and corn doesn't pose too big of a threat, the market could stand a chance at taking the long-term resistance out. But if the corn market continues to scale higher, the feeder cattle futures complex will likely remain under pressure. Oklahoma's Weekly Cattle Auction Summary shared that compared to last week throughout the entire state feeder steers traded $1.00 to $5.00 higher, and feeder heifers traded $2.00 to $4.00 higher. Steer calves traded $2.00 to $6.00 stronger and heifer calves sold $4.00 to $8.00 higher. Slaughter cows sold $3.00 to $5.00 higher and slaughter bulls sold steady. The CME Feeder Cattle Index 8/11/2022: down $0.22, $178.28.
LEAN HOGS:
After reaching new contract highs Thursday, traders waived their white flag Friday and let the market trend lower into the weekend. It's a powerful thing when supplies are short, and demand is hot! This past week, the lean hog market saw nearly a perfect storm as packers were once again pushed into supporting the cash market as consumers continue to chase pork cuts and could continue to do so through the summer while prime grilling weather lasts. October lean hogs closed $1.05 lower at $100.02, December lean hogs closed $0.25 lower at $90.37 and February lean hogs closed $0.02 higher at $92.75. Friday's WASDE report was supportive in the fact that it's not likely that supplies grow overly burdensome before the year's end as quarter price projections forecast third quarter prices at $85 (up $9.00 from July's WASDE report) and fourth quarter prices are expected to average $69 (up $3.00 from July's report). Pork cutouts total 315.67 loads with 296.87 loads of pork cuts and 18.80 loads of trim. Pork cutout values: down $1.48, $121.83. The CME Lean Hog Index 8/10/2022: down $0.23, $121.86.
Friday's slaughter is estimated at 440,000 head -- 12,000 head less than a week ago and 24,000 head less than a year ago. Saturday's slaughter is estimated at 29,000 head. Thursday's slaughter was revised to 463,000 head -- 7,000 head less than what was originally stated.
MONDAY'S CASH HOG CALL: Lower. Packers haven't been showing Monday's market much interest so it's unlikely that we see much trade develop on Monday but by the middle of the week prices will likely be higher again.
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