GENERAL COMMENTS:
Friday's close came with some challenges for the livestock complex. Both the live cattle and feeder cattle contracts will likely be challenged on Monday as the market absorbs Friday's bearish Cattle on Feed report, and the lean hog complex will look for support in the form of strong pork cutout values. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $6.29 with a weighted average of $117.80 on 4,039 head. December corn is up 7 1/2 cents per bushel and December soybean meal is down $5.60. The Dow Jones Industrial Average is down 292.30 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle up $1.38, October live cattle up $0.75; August feeder cattle up $1.88, September feeder cattle up $1.38; October lean hogs down $6.90, December lean hogs down $6.22; September corn down $0.14, December corn down $0.19.
LIVE CATTLE:
The live cattle complex leaned into Friday's trade and was able to close slightly higher despite the market fearing a surprising Cattle on Feed report. August live cattle closed $0.32 higher at $141.60, October live cattle closed $0.50 higher at $145.25 and December live cattle closed $0.42 higher at $150.97. It's likely that Monday's trade is pressured as the market will have to absorb Friday's COF report, which could realistically pressure the market into the middle half of the week. Nevertheless, continuing to monitor processing speeds will need to be the market's focus next week as well as boxed beef prices. This week's slaughter was rather impressive at 661,000 head, but there are rumors that some plants intend to be dark on Saturday of next week for maintenance, which also bodes well for packers as it gives them a opportunity to bridle the cash cattle market. Friday's afternoon reports shared that only 81,365 head of cattle traded in the cash cattle market, but Monday's report will solidify exactly how many sold and for what delivery they were committed to.
Throughout the week, Southern live cattle traded at mostly $142, which is $2.00 higher than last week's weighted average, and Northern dressed cattle sold for mostly $234, which is $4.00 higher than last week's weighted average.
Friday's Imported Meat for Entry into the U.S. report shared that fresh beef imports totaled 21,569 metric tons, which Canada, Mexico, New Zealand and Brail carrying the lion's share of the business (up 11% from a year ago). Processed beef imports totaled 1,782 metric tons (up 22% from a year ago).
Friday's slaughter is estimated at 122,000 head, 4,000 head more than a week ago and 5,000 head more than a year ago. Saturday's slaughter is estimated at 40,000. This week's slaughter is estimated at 661,000 head, 14,000 head more than a week ago and 5,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $0.11 ($264.28) and select up $0.47 ($237.94) with a movement of 73 loads (41.80 loads of choice, 16.02 loads of select, 5.32 loads of trim and 9.98 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Lower. With plants rumored to need maintenance next week, it's likely that packers try to push the cash market lower.
FEEDER CATTLE:
As the corn complex pushed into Friday's afternoon gaining more support, traders who were interested in the feeder cattle market jumped ship and waved the market farewell ahead of Friday's close. Higher corn prices, coupled with the afternoon's (expected) bearish Cattle on Feed report, didn't help the feeder cattle market either. Analysts projected that placement would be lower on Friday's COF report, but low and behold, that wasn't the case whatsoever. Placements were extremely higher in the lightweight divisions of the report with Oklahoma, South Dakota, Texas, Kansas and Nebraska all seeing higher placements than a year ago. Friday's COF report will likely bring a doggish tone to the market early next week but long-term speaking it won't derail the market's trajectory. August feeders closed $0.02 lower at $181.50, September feeders closed $0.52 lower at $184.75 and October feeders closed $0.90 lower at $186.77. Oklahoma's Weekly Cattle Auction Summary shared that, throughout the entire state, compared to last week, feeder steers sold $3.00 to $8.00 higher, and feeder heifers sold $1.00 to $4.00 stronger. Demand was deemed good to very good as feeder cattle are coming to the sales in limited supply and out of state buyers are flocking to sales, which is increasing competition. Steer calves sold $6.00 to $8.00 higher with 300 to 400 pounds running up to $20.00 higher, and heifer calves traded $5.00 to $10.00 higher. The CME Feeder Cattle Index for Aug. 18: down $0.65, $179.21.
LEAN HOGS:
It was anther painstaking day for the lean hog complex as the market saw prices continue to tumble lower, and the pork cutout values rounded out the day lower too. October lean hogs closed $0.17 lower at $93.12, December lean hogs closed $1.02 lower at $84.15 and February lean hogs closed $1.70 lower at $87.02. Given that traders have obviously deemed that the lean hog market needs to trade lower, the question remains: How much lower does the market need to go? Long-term speaking, hog supplies are expected to remain thin, which should keep cash prices relatively strong. Pork cutouts total 250.81 loads with 221.94 loads of pork cuts and 28.87 loads of trim. Pork cutout values: down $2.76, $117.15. Friday's slaughter is estimated at 467,000 head, 34,000 head more than a week ago and 9,000 head more than a year ago. The CME Lean Hog Index for Aug. 17: down $0.02, $120.62.
MONDAY'S CASH HOG CALL: Lower. The market won't likely see active business until Tuesday or Wednesday of next week.
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