GENERAL COMMENTS:
It was a mostly lower trending day for the livestock complex as both the live cattle and lean hog markets closed fully lower Wednesday, but the feeder cattle market saw its nearby contracts round out the day green. Nevertheless, both the hog and beef markets would be elated to see a strong export report early Thursday morning. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.62 with a weighted average of $125.50 on 20,613 head. December corn is up 2 cents per bushel and December soybean meal is up $2.10. The Dow Jones Industrial Average is up 59.64 points.
LIVE CATTLE:
The live cattle contracts rounded out the day lower as the market saw little support from traders and faced a slightly weaker cash market. October live cattle closed $0.82 lower at $143.77, December live cattle closed $0.67 lower at $150.00 and February live cattle closed $0.32 lower at $154.62. The market has steadily declined since last week's high point, which could be the market's tone until after Labor Day. There were some cattle traded in the North for $233, which is $1.00 softer than last week's weighted average. Southern cattle have traded for $142, which is mostly steady with last week's trend. Wednesday's afternoon reports share that only 33,827 head have sold thus far this week. Thursday's market will look for more clean-up business to develop, but it's likely that this week's volume is thin.
Wednesday's slaughter is estimated at 124,000 head, 2,000 head less than a week ago but still 10,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $0.03 ($262.83) and select down $1.18 ($237.62) with a movement of 121 loads (61.30 loads of choice, 23.92 loads of select, 20.98 loads of trim and 14.55 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions now, it's likely that the week's price trend holds steady.
FEEDER CATTLE:
The feeder cattle complex performed far better than I expected given that Tuesday's corn rally served the complex a mere blood bath, and that, in Wednesday's market, the nearby corn contracts closed steady to $0.05 stronger but even so the nearby feeder cattle contracts saw slightly higher close. September feeders closed $0.57 higher at $183.02, October feeder cattle closed steady at $184.45 and November feeders closed $0.37 lower at $186.05. It's quite impressive that the nearby feeder cattle contracts were able to close slightly higher given the immense pressure that the corn market has added over the last couple of days and with fat cattle trading steady to $1.00 lower. Then again, this week's market is a great reminder that, even though markets can break higher or lower at any given point in time, strong fundamental demand like we are seeing right now in the market is a tough force to run over. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, steer calves weighing under 450 pounds traded $15.00 to $20.00 higher while heavier weight steers traded steady to $4.00 higher. Feeder steers and heifers were not well tested but steady to firm prices were noted. It was noted that buyers outnumbered sellers throughout most of the day and there were buyers in the crowd that hadn't been present in several months. Feeder cattle supply over 600 pounds was 26%. The CME Feeder Cattle Index for Aug. 23: down $0.10, $180.50.
LEAN HOGS:
The lean hog complex trended lower throughout Wednesday's market, which didn't come as a surprise given the tough day that it endured on Tuesday with cutout prices dropping a staggering $12.53. Pork cutout values closed lower again today, but the day's decline came from blended pressure from both bellies and butts; bellies fell $6.15 lower and butts dropped $6.98 lower. Regardless, it's evident that packers are needing to move product as they're increasing chain speeds and cutting product prices. October lean hogs closed $2.52 lower at $90.37, December lean hogs closed $2.05 lower at $82.17 and February lean hogs closed $1.82 lower at $85.75. Pork cutouts totaled 305.50 loads with 262.81 loads of pork cuts, and 42.69 loads of trim. Pork cutout values: down $2.09, $102.99. Wednesday's slaughter is estimated at 480,000 head, 2,000 head more than a week ago and 7,000 head more than a year ago. The CME Lean Hog Index for Aug. 22: down $0.80, $119.18.
THURSDAY'S CASH HOG CALL: Lower. Given that packers have bought hogs for two days now likely means that they'll inactive buyers throughout the rest of the week.
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