GENERAL COMMENTS:
Between the drastic close in pork cutout values and the corn market's effect on the feeder cattle market, the live cattle complex was the mellow market of the livestock complex throughout the day. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.77 with a weighted average of $127.12 on 20,218 head. December corn is up 26 1/4 cents per bushel and December soybean meal is up $11.80. The Dow Jones Industrial Average is down 154.02 points.
LIVE CATTLE:
The live cattle complex minded its own business throughout Tuesday's market and impressively was able to close out the day higher. It wouldn't have been surprising to see the corn market's surge affect the live cattle complex and send it trading slightly lower but given how thin market-ready supplies of cash cattle are, the market held its own. October live cattle closed $0.10 higher at $144.60, December live cattle closed $0.15 higher at $150.67 and February live cattle held steady at $154.95. There was a little bit of trade that developed in the South at $142 which is mostly steady with last week's market. The North remained mostly quiet with just a handful of cattle trading, and certainly not enough to say that a trend was established. The market should see more business develop come Wednesday.
Tuesday's slaughter is estimated at 126,000 head -- steady with a week ago and 6,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $1.72 ($262.80) and select up $0.44 ($238.80) with a movement of 152 loads (95.62 loads of choice, 21.14 loads of select, 13.99 loads of trim and 21.11 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Given that packers have some dark days ahead of them it's likely that prices remain steady this week.
FEEDER CATTLE:
It's crazy just how much can change in a day -- and the grain complex is a perfect example of just how fast a market can run! On the announcement of weakening crop ratings and lower yield estimates the corn complex closed higher and sent the feeder cattle market trembling lower. The nearby corn contracts were able to add $0.23 to $0.26 by the day's end, and the feeder cattle market did all that it could to erode as little as possible. Thankfully the market can absorb this news while feeder cattle demand still remains extremely aggressive which helped the market from closing even lower than it did. September feeders closed $1.90 lower at $182.45, October feeders closed $2.02 lower at $184.45 and November feeders closed $2.17 lower at $186.42. At Cattlemen's Livestock in West Point, Mississippi, compared to last week feeder steers sold $2.00 to $12.00 higher, and feeder heifers sold $2.00 to $8.00 higher, while feeder bulls sold $6.00 to $15.00 higher. Slaughter cows sold $6.00 to $7.00 higher and slaughter bulls traded steady. Feeder cattle supply over 600 pounds was 11%. The CME feeder cattle index 8/22/2022: down $0.06, $180.60.
LEAN HOGS:
The corn market was one whirlwind that we all had to get our minds wrapped around, but the staggering $12.53 drop in pork cutout values was another. Our databases show that today's drop is the second steepest loss on record, following the $12.93 loss posted on 6/22/2021. Today's gut-wrenching decline stemmed from the $48.59 drop in bellies, though it is also important to note that the ham did fall $11.07. Nevertheless, Wednesday's hog market could be faced with a lower futures market as traders try to sort out what happened to pork demand, and if this was a rash cut made on bellies, or if this is a signal of demand. October lean hogs closed $1.07 lower at $92.90, December lean hogs closed $0.25 lower at $84.22 and February lean hogs closed $0.12 lower at $87.57. Pork cutouts totaled 415.72 loads with 365.65 loads of pork cuts and 50.06 loads of trim. Pork cutout values: down $12.53, $105.08. Tuesday's slaughter is estimated at 480,000 head - 4,000 head more than a week ago and 7,000 head more than a year ago. The CME lean hog index 8/19/2022: down $0.31, $119.98.
WEDNESDAY'S CASH HOG CALL: Steady. Given that over 20,000 head traded in Tuesday's market and that pork cutout values saw such a staggering loss, it wouldn't be surprising to see hog prices remain steady if not even trend lower come Wednesday.
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