GENERAL COMMENTS:
It was a tough week for the livestock complex as pressure built from multiple different angles. Next week the market could see some more pressure built as the complex looks holiday-related hiccups dead in the eye, but once Labor Day is behind the market, things should level out. The biggest fear cattle posses right now is surrounding the corn market and how much upside is withholds. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $7.37 with a weighted average of $110.25 on 4,433 head. December corn is up 14 1/4 cents per bushel and December soybean meal is up $14.20. The Dow Jones Industrial Average is down 1,008.38 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle down $0.80, October live cattle down $2.20; September feeder cattle down $2.55, October feeder cattle down $3.38; October lean hogs down $2.47, December lean hogs down $1.20; September corn up $0.43, December corn up $0.41.
LIVE CATTLE:
The live cattle market didn't see much support throughout the week, or in Friday's market. October live cattle closed $0.60 lower at $143.05, December live cattle closed $0.80 lower at $149.10 and February live cattle closed $0.77 lower at $153.90. The cash cattle market didn't receive much interest this week as its prices were steady to $2.00 lower compared to last week and its total trade volume was thin. Throughout the week, Southern live cattle have traded for mostly $142 which is steady with last week's weighted averages, and Northern dressed cattle have traded for $232 to $233 which is $1.00 to $2.00 lower than Nebraska's weighted average last week. Even though the cash cattle market's weakness was expected, as packers plan for a lighter kill schedule next week ahead of Labor Day, the softer tone affected the entire marketplace and could affect next week's market too. However, once the market gets past the holiday week, heighted demand should be seen again for cash cattle, especially with how fast processing speeds are running.
Friday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 7,000 head more than a year ago. Saturday's slaughter is estimated to be around 56,000 head. This week's slaughter is estimated at 678,000 head, 17,000 head more than a week ago and 25,000 head more than a year ago.
Friday's Imported Meat report shared that for the week fresh beef imports totaled 18,953 metric tons -- with Canada, Mexico and Australia being the biggest providers, and processed beef imports for the week totaled 1,471 metric tons with Brazil being by far the largest provider.
Boxed beef prices closed mixed: choice down $0.78 ($262.76) and select up $1.22 ($238.76) with a movement of 101 loads (70.61 loads of choice, 11.22 loads of select, 10.95 loads of trim and 7.87 loads of ground beef). Throughout the week choice cuts averaged $263.29 (down $1.29 from last week) and select cuts averaged $238.22 (down $0.21 from last week) with a movement of 586 loads of cuts, grinds, and trim.
MONDAY'S CASH CATTLE CALL: Steady to $2.00 higher. Both this week and last week packers were "buying on a long week for a short week," meaning that, come next week, packers are going to need to be thinking about the weeks ahead and how their inventories sit long term. Given that not every many cattle traded this week, next week's market could see more interest.
FEEDER CATTLE:
The feeder cattle market took a beating throughout Friday's trade as the corn complex grew stronger as the day traded on, which sent the feeder cattle market tumbling lower ahead of the weekend. September feeders closed $2.05 lower at $182.20, October feeders closed $2.12 lower at $183.40 and November feeders closed $1.90 lower at $185.17. The feeder cattle market's biggest hinderance this past week was the corn markets rally. The rain the crossed the Southern part of the U.S. could be helpful to backgrounders as it could allow for some late summer growing, but, largely, it won't help hay production as the moisture came too late. Corporate buyers were noted to be less aggressive this week in sales, but still farmer feeders paid close attention and continue to be both active and aggressive in the spot market. The market may bobble this upcoming week as some sales will see less interest as Labor Day nears, but once the holiday is in the rearview mirror, feeder cattle interest should continue to be lucrative so long as the corn market doesn't break too much higher. Oklahoma's Weekly Cattle Auction Summary shared that, throughout the entire state, and when compared to last week, feeder steers traded $1.00 to $3.00 lower, and feeder steers weighing 600 to 700 pounds traded $7.00 to $8.00 lower. Feeder heifers traded mostly steady. Steer calves traded steady to $1.00 lower while heifer calves traded steady to $3.00 lower. Slaughter cows sold steady to $3.00 lower, expect breaker cows traded $5.00 higher and slaughter bulls traded $3.00 to $4.00 softer. Feeder cattle supplies over 600 pounds was 47%. The CME Feeder Cattle Index for Aug. 25: up $1.25, $182.25.
LEAN HOGS:
The lean hog market found some support late in the week as pork cutout prices mostly stabilized and traders felt as though the market had worked its way low enough for the time being. October lean hogs closed $0.45 lower at $90.65, December lean hogs closed $0.32 lower at $82.95 and February lean hogs closed $0.55 higher at $86.47. The biggest question moving forward is: How will pork demand fair domestically? After seeing pork cutout values fall dramatically lower this past week, packers are needing to see renewed interest from consumers as international demand isn't robust. Pork cutouts totaled 330.54 loads with 299.06 loads of pork cuts and 31.49 loads of trim. Pork cutout values: down $0.43, $102.23. Friday's slaughter is estimated at 451,000 head, 16,000 head less than a week ago and 12,000 head less than a year ago. Saturday's kill is projected to be around 28,000 head. The CME Lean Hog Index for Aug. 24: down $1.95, $116.05.
MONDAY'S CASH HOG CALL: Lower. Packers aren't likely to be aggressive in the cash market until Tuesday or Wednesday of next week.
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