GENERAL COMMENTS:
Thursday's livestock market allowed for the cattle contracts to close slightly higher, but the lean hog complex closed lower, and hardly any cash hog trade developed. The Foreign Agricultural Service announced on Aug. 31 that they will be unable to publish weekly export sales data on Thursday, Sept. 1 or Thursday, Sept. 8, but expects to resume regular reporting on Thursday, Sept. 15. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $5.06 with a weighted average of $99.75 on 4,909 head. December corn is down 12 1/2 cents per bushel and December soybean meal is up $0.20. The Dow Jones Industrial Average is up 145.99 points.
LIVE CATTLE:
The live cattle complex closed slightly higher by Thursday's end, but that doesn't mean that the market didn't stumble throughout the day. First, boxed beef prices have been seen pushback throughout the week and again, in Thursday's afternoon boxed beef report, prices dropped lower. Second, it was last Thursday that the market was challenged to either question or accept the most recent slaughter data, which showed an increase in carcass weights all while grading percentages fall and slaughter speeds run relentlessly, and today, we were shown similar data as carcass weights again increased. Nevertheless, Thursday's market wasn't fiery or even eventful to watch, but I am excited for this Labor Day weekend to pass so some normalcy can creep back into the markets and we can get answers to some lingering questions. October live cattle closed $0.22 higher at $142.80, December live cattle closed $0.10 higher at $148.57 and February live cattle closed $0.17 lower at $153.15. The cash cattle saw a little more clean-up trade develop throughout the day, but nothing big enough to shake the market's current price trend. Throughout the week, Southern live cattle have traded for $141, which is $1.00 lower than last week's weighted average, and Northern cattle have traded for $228, which is $5.00 lower than last week's weighted average.
Thursday's slaughter is estimated at 125,000 head, 1,000 head more than a week ago and 7,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending Aug. 20, steers averaged 904 pounds, which is 3 pounds more than a week ago but 1 pound less than a year ago. For the same week, heifers averaged 822 pounds, which is steady with the previous week but 2 pounds heavier than a year ago.
Boxed beef prices closed lower: choice down $0.27 ($258.07) and select down $1.15 ($236.59) with a movement of 109 loads (63.25 loads of choice, 30.91 loads of select, 5.08 loads of trim and 9.84 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Any trade that develops on Friday will like trend with the week's average.
FEEDER CATTLE:
As the corn market walked itself back $0.12 to $0.15 in its nearby contracts, the feeder cattle market was able to post a modest rally with the market's deferred contracts seeing the biggest gains. September feeders closed $0.70 higher at $183.15, October feeders closed $0.87 higher at $184.30 and November feeders closed $1.17 higher at $185.70. It's interesting that the deferred contracts saw the biggest gains throughout the day as that could stem from a couple different reasonings: 1) the corn crop will be well harvested, and feed prices won't be a volatile; 2) feeder cattle are expected to be in shorter supply than what they are in now. Regardless of the reason, even though the market is struggling this week, a higher trajectory is still insight. At Winter Livestock Auction in Pratt, Kansas, at their midsession point, when compared to last week, feeder steers weighing 700 to 1,000 pounds sold $2.00 to $5.00 lower and feeder heifers weighing 700 to 950 pounds traded $2.00 to $7.00 lower. Feeder cattle supply over 600 pounds was 97%. The CME Feeder Cattle Index for Aug. 31: down $0.67, $182.36.
LEAN HOGS:
It's hard to believe that so few of hogs have been purchased this week, with current slaughter speeds showing no sign of weakening. Obviously, we will see waned speeds this weekend and early next week as the market celebrates the Labor Day holiday, but what about future weeks? Either packers are planning on reducing processing speeds after Labor Day or they're going to have to be aggressive in the cash market to make up for lost time. October lean hogs closed $0.42 higher at $91.95, December lean hogs closed $0.10 lower at $83.77 and February lean hogs closed $0.25 lower at $87.55. Pork cutouts totaled 328.36 loads with 298.69 loads of pork cuts and 29.67 loads of trim. Pork cutout values: down $1.33, $101.86. Thursday's slaughter is estimated at 480,000 head, 4,000 head more than a week and year ago. The CME Lean Hog Index for Aug. 30: down $1.74, $107.62.
FRIDAY'S CASH HOG CALL: Steady to somewhat lower. At this point, packers have most likely made up their minds and are simply choosing to buy as few of hogs as possible this week in the cash market. At this point, it wouldn't be surprising to see 4,000 to 6,000 head trade Friday, but much more than that isn't expected.
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