GENERAL COMMENTS:
It was a mixed day for the livestock complex as the lean hog market found support and traded higher throughout the day, but the cattle complex traded meekly as the market is concerned about rallying corn prices. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.90 with a weighted average of $109.35 on 6,149 head. December corn is up 18 3/4 cents per bushel and December soybean meal is down $1.40. The Dow Jones Industrial Average is down 184.41 points.
LIVE CATTLE:
It was an uneventful day for the live cattle contracts as the corn market's rally and excitement cast a negative and doggish tone across the cattle complex. October live cattle closed $0.15 lower at $142.90, December live cattle closed $0.17 lower at $148.92 and February live cattle closed $0.25 lower at $153.65. Even though the futures complex is opting to go with a lower tone to start the week off with, there are key fundamental matters that are still supportive. Last week's estimated weekly slaughter of 678,000 head could be the biggest of the 2022 calendar year, which will be known in two weeks when the USDA's Actual Slaughter Data is released. This week's cash cattle market is up for anyone's guess as packers have some decisions to make. Even though this week is leading into a three-day weekend, there's plenty of action to watch.
Monday's slaughter is estimated at 122,000 head, 3,000 head less than a week ago but still 5,000 head more than a year ago. New showlists appear to be lower in all major feeding states.
Boxed beef prices closed higher: choice up $0.28 ($263.04) and select up $3.99 ($242.75) with a movement of 91 loads (55.08 loads of choice, 15.82 loads of select, 10.90 loads of trim and 8.97 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. It's tough to decide what packers are going to do this week as they weigh the pros and cons of either supporting the market this week and securing inventory, or sitting idle and not buying aggressively this week, which will only pressure them to be more aggressive in the weeks to come.
FEEDER CATTLE:
With the corn market pushing a $0.15 to $0.18 rally through Monday's end, the feeder cattle complex stood no chance of closing higher. Last week's National Feeder and Stocker Cattle summary shared that steers and heifers in the North Central and South Central Regions sold steady to $4.00 higher, but that in the Southeast Region steers and heifers sold steady to $5.00 lower with the exception of 400-pound steers selling $2.00 higher. It's likely that this type of mixed interest is seen again this week in the market's feeder cattle sales as some buyers are backing away from the market until there's a better understanding on just how high corn is going to go. However, just as every coin has two sides, there are other buyers out there who are looking for every opportunity to buy calves and feeders alike because they know they're only going to become hard to find later this fall. September feeders closed $2.27 lower at $179.92, October feeders closed $2.32 lower at $181.07 and November feeders closed $2.27 lower at $182.90. The CME Feeder Cattle Index for Aug. 26: up $0.91, $183.16.
LEAN HOGS:
Traders didn't pay the cattle complex any attention throughout Monday's trade, but the same can't be said about the lean hog market. Steady gains were seen throughout its complex and, with the combination of an aggressive slaughter on Monday and slightly higher pork cutout values, Tuesday's market stands a fighting chance at trading higher too. The day's mild $0.34 gain on pork cutout values wasn't much compared to the midday's report, but it was impressive that the market was able to close higher at all given that bellies fell another $11.22. October lean hogs closed $1.60 higher at $92.25, December lean hogs closed $1.65 higher at $84.60 and February lean hogs closed $1.45 higher at $87.92. Pork cutouts totaled 314.88 loads with 280.63 loads of pork cuts and 34.24 loads of trim. Pork cutout values: up $0.34, $102.57. Monday's slaughter is estimated at 480,000 head, 2,000 head more than a week ago and 10,000 head more than a year ago. The CME Lean Hog Index for Aug. 25: down $2.73, $113.32.
TUESDAY'S CASH HOG CALL: Higher. Monday's cash hog market didn't see hardly any interest, and packers could wait until Wednesday to really get aggressive in their buying pursuits for the week, but given that this week sits ahead of the Labor Day weekend, it wouldn't be surprising to see packers aggressive earlier than normal.
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