GENERAL COMMENTS:
The livestock complex is a mixed bag heading into Monday's afternoon as the cattle contracts are focusing on the corn market's continued rally, all while the lean hog complex finds support early in the day. Nevertheless, the market is undeniably looking for both direction and support which could come this week or be delayed until after Labor Day. December corn is up 15 1/2 cents per bushel and December soybean meal is down $4.60. The Dow Jones Industrial Average is down 101.75 points.
LIVE CATTLE:
The spot October live cattle contract is trading just slightly above steady while the rest of the market traipses lower. The onset of yet another day of higher corn prices has the cattle complex anxious as the market knows that this week's support could be hard to come by given that packers have a reduced kill schedule planned later this week for the Labor Day weekend. October live cattle are up $0.12 at $143.17, December live cattle are steady at $149.10 and February live cattle are down $0.22 at $153.67. The cash cattle market is a question mark in the market this week as packers paid little to no interest in the market last week, which they could either do again this week or adversely be pressured into supporting the market given that they were lax buyers last week. Given that this upcoming weekend is a long one, packers will likely try to do their business earlier in the week as opposed to waiting until Thursday or Friday.
Last week's negotiated cash cattle trade totaled 70,637 head. Of that, 69% (48,511 head) were committed for the nearby delivery, while the remaining 31% (22,126 head) were committed for the deferred delivery. Last week Southern live cattle traded for $138 to $144, mostly $142, which is steady with the previous week's weighted average; but Northern dressed cattle traded for $230 to $238, mostly $232 to $233, which was $1 to $2 lower than the previous week's weighted average basis in Nebraska.
Boxed beef prices are higher: choice up $0.76 ($263.52) and select up $2.59 ($241.35) with a movement of 43 loads (23.99 loads of choice, 4.68 loads of select, 9.94 loads of trim and 4.76 loads of trim).
FEEDER CATTLE:
With the corn market pushing a brisk $0.11 to $0.15 rally in its nearby contracts to start the week off, the feeder cattle complex is worried. DTN's Lead Analyst Todd Hultman said, "DTN's Digital Yield Tour, powered by Gro Intelligence, pointed out on Aug. 8, there is already a lot of evidence to expect a national corn yield significantly less than USDA's August estimate of 175.4 bushels per acre (bpa) and a whole season of tighter U.S. corn supplies ahead." And until harvest is complete and farmers, cattle feeders and traders alike all know how this year's crop panned out, the market is subject to flutter based on changes in this year's crop. September feeders are down $2.27 at $179.95, October feeders are down $2.32 at $181.07 and November feeders are down $2.32 at $182.85.
LEAN HOGS:
While the cattle complex fixates its attention on the corn market and it's gaining steam, the lean hog complex has found support and is trending higher into Monday's afternoon. So much of the lean hog market's immediate focus is on demand and product movement as packers desperately need to see retail interest and need somewhere to ship product to given that export demand has been less than helpful or desirable. It's interesting to see pork cutout values up over $7.00 higher to start the week out, which can undoubtedly change ahead of the day's afternoon report, but steady increases were seen across the report and on all cuts. October lean hogs are up $1.47 higher at $92.15, December lean hogs are up $1.40 higher at $84.35 and February lean hogs are up $1.27 at $87.75.
The projected lean hog index for Aug. 26 is down $2.06 at $111.26, and the actual index for Aug. 25 is down $2.73 at $113.32. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.88 with a weighted average of $110.31, ranging from $100.00 to $127.00 on 3,618 head and a five-day rolling average of $121.78. Pork cutouts total 190.26 loads with 164.33 loads of pork cuts and 25.93 loads of trim. Pork cutout values: up $7.03, $109.26.
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