GENERAL COMMENTS:
The only real positive the livestock market can be excited about is the strong export report for cattle and the cash cattle market's $2.00 to $4.00 advancement. The livestock futures contracts all closed lower and pork exports weren't supportive for the week's market. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $7.25 with a weighted average of $124.09 on 6,498 head. December corn is up 3 3/4 cents per bushel and December soybean meal is up $7.30. The Dow Jones Industrial Average is up 18.72 points.
LIVE CATTLE:
Around the noon hour, trade finally started to develop in the South where most cattle were sold at $142, which is $2.00 higher than last week's weighted average, and as more time passed, Northern cattle sold at mostly $234, which is $4.00 higher than last week's weighted average. It is worth noting that, while most of the market's cattle sold for $234 in the North, there were cattle that sold for as high as $237. Continuing with Thursday's good news was that carcass weights were again lower, which simply comes to show just how current showlists are. This week's movement of cash cattle is still relatively thin, however, as less than 60,000 head have traded. Packers obviously want to put a kibosh to the cash cattle market's upward run, but at the same time, they need cattle and have backed themselves into a corner as they've been caught short bought. It will be incredibly important to watch how many cattle packers get bought this week, and equally as important to see how they commit them. It's likely that here soon packers will be buying more and more cattle with the delivery window for the deferred 15 to 30 days to curb the cash cattle market's rally. Monday's USDA report will disclose how this week's cattle were committed. August live cattle closed $0.47 lower at $141.27, October live cattle closed $1.10 lower at $144.75 and December live cattle closed $0.95 lower at $150.55. Thursday's slaughter is estimated at 126,000 head, 1,000 head less than a week ago and 8,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending Aug. 8, steers averaged 892 pounds, down 1 pound from the previous week but 4 pounds lighter than a year ago and for the same week, heifers averaged 814 pounds, which was 1 pound less than the previous week and 3 pounds less than a year ago.
Beef net sales of 18,900 mt for 2022 were up 29% from the previous week and unchanged from the prior four-week average. The three primary buyers were China (7,400 mt), Japan (5,300 mt) and South Korea (1,900 mt).
Boxed beef prices closed mixed: choice up $0.05 ($264.39) and select down $0.42 ($237.47) with a movement of 132 loads (74.21 loads of choice, 42.11 loads of select, 6.58 loads of trim and 9.07 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Given that the market as seen cattle trade in both regions, and prices have already advanced from last week, any trade that develops on Friday will likely be for steady money.
FEEDER CATTLE:
As the corn market pushed a $0.03 to $0.04 rally and the live cattle market scaled lower, the feeder cattle contracts drew back, even though fundamental support in the countryside is still alive and well. After advancing the market tremendously on Tuesday and Wednesday, traders viewed the complex come Thursday and opted to let the market drift lower as they look for reassurance. Thankfully, the cash cattle market did see trade finally develop and it was again support for the feeder cattle market as fat cattle traded $2.00 higher in the South and $4.00 higher in the North. A stronger live cattle/fat cattle market bodes better for the feeder cattle market as it allows buyers to see more upward potential for the feeder cattle they're currently buying. August feeders closed $1.72 lower at $181.52, September feeders closed $1.85 lower at $185.27 and October feeders closed $1.87 lower at $187.67. The CME Feeder Cattle Index for Aug. 17: down $0.03, $179.86.
LEAN HOGS:
It was nosediving day for the lean hog market as traders were unwilling to support its market whatsoever. After running the complex to contract highs last week, traders have grown skeptical of advancing the market and have worked the complex down $2.00 to $4.00 lower in Thursday's trade. It was good for hog producers to see that pork cutout values closed higher, but this slightly supportive gesture didn't influence the futures market. Also disappointing the market was the fact that pork export data was lousy Thursday morning, meaning, long-term, there could be more meat domestically if shipments don't see an increase in demand internationally soon. October lean hogs closed $4.75 lower at $93.30, December lean hogs closed $3.25 lower at $85.17 and February lean hogs closed $2.37 lower at $88.72. Thursday's slaughter is estimated at 474,000 head, 9,000 head more than a week ago and 2,000 head more than a year ago. The CME Lean Hog Index for Aug. 16: down $0.44, $120.62.
Pork net sales of 13,600 mt for 2022 were down 37% from the previous week and 43% from the prior four-week average. The three primary buyers were Mexico (7,100 mt), Japan (2,600 mt) and South Korea (900 mt).
FRIDAY'S CASH HOG CALL: Lower. With both Tuesday and Wednesday seeing big demand in the cash market, Friday's market will likely be lower and on a thin test as packers have fulfilled their needs for the week.
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