GENERAL COMMENTS:
It's been a wild week for the marketplace but come Thursday, there was some good to be had as a tentative deal has been reached to avert a railroad strike and cash cattle trade saw higher prices. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.15 with a weighted average of $95.11 on 7,078 head. December corn is down 4 3/4 cents per bushel and December soybean meal is up $4.90. The Dow Jones Industrial Average is down 173.27 points.
LIVE CATTLE:
It was a thrilling day for the live cattle complex as, technically speaking, the contracts came alive as packers tipped their hand and showed that they needed cattle, pushing prices $1.00 higher in the South, and even upped their bids in the North where cattle sold steady to $1.00 stronger than both Wednesday's trade and last week's market. October live cattle closed $1.27 higher at $145.62, December live cattle closed $1.27 higher at $151.32 and February live cattle closed $0.90 higher at $155.37. It was interesting to watch both the October and December 2022 live cattle contracts as the markets ran up to resistance levels but closed in comfortable territory, just below the resistance plane. Traders are showing the market that they're willing to push higher, but they'll need to see steady and consistent fundamental support if they're going to do so. Feedlots are feeling empowered given that they were able to wait and see cattle trade higher this week, which will likely give them the confidence to ask for higher prices again next week. September is historically a month where the boxed beef market sees pressure, but in moving toward October, we must ask ourselves: at what point will packers cut back processing to protect margin if they don't see improvement in boxes? Southern live cattle traded at $142 which is $1.00 higher than last week's weighted average. Northern dressed cattle traded for $226 to $227 which is steady to $1.00 higher than last week's weighted average.
Thursday's slaughter is estimated at 125,000 head, 2,000 head less than a week ago and 6,000 head more than a year ago.
For the week ending Sept. 3, steer carcasses averaged 904 pounds which is steady with the previous week and two pounds lighter than a year ago. Heifers for the same week averaged 824 pounds, which is 3 pounds heavier than the previous week and 2 pounds heavier than a year ago.
Beef net sales of 15,100 mt for 2022 were primarily for South Korea (6,700 mt), Japan (4,200 mt) and Mexico (1,700 mt).
Boxed beef prices closed lower: choice down $1.13 ($252.34) and select down $0.16 ($229.95) with a movement of 145 loads (93.43 loads of choice, 30.65 loads of select, 4.97 loads of trim and 15.60 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Given that cattle have already traded in both regions, it's likely that prices remain steady. If packers are considerably short-bought, then the market could still see a large volume traded.
FEEDER CATTLE:
Even though the corn market closed $0.04 to $0.06 lower in its nearby contracts, the feeder cattle market couldn't do much but trade modestly lower in its nearby contracts, as everyone is fearful of looking at $7.00 per bushel corn dead in the eye. September feeders closed $0.62 lower at $179.35, October feeders closed $0.50 lower at $180.92 and November feeders closed $0.20 lower at $182.77. At Winter Livestock in Pratt, Kansas, compared to last week, and at their midsession point, feeder steers weighing 700 to 900 pounds sold steady on light receipts. Feeder heifers weighing 600 to 950 pounds traded $2.00 to $5.00 higher, but thin fleshed heifers sold $10.00 higher. Feeder cattle supply over 600 pounds was 96%. The CME Feeder Cattle Index for Sept. 14: down $1.46, $178.51.
LEAN HOGS:
The lean hog market was thrilled to see Thursday's export data and the contracts performed as such. October lean hogs closed $1.35 higher at $96.05, December lean hogs closed $2.35 higher at $87.65 and February lean hogs closed $1.85 higher at $91.25. Even though pork cutouts closed lower, packers will likely view Thursday's market as helpful, given that export sales helped alleviate some domestic pressure on the meat market. Moving forward, the lean hog market dreams of strong export sales (which we know not to get too hopeful about) and strong domestic demand in order to keep the market trading positively. Pork cutouts totaled 273.98 loads with 245.27 loads of pork cuts and 28.71 loads of trim. Pork cutout values: down $1.03, $105.85. Thursday's slaughter is estimated at 482,000 head, 4,000 head more than a week ago and 16,000 head more than a year ago. The CME Lean Hog Index for Sept. 13: down $0.09, $97.58.
Pork net sales for 25,100 mt for 2022 were primarily for Mexico (9,900 mt), China (4,700 mt) and Japan (4,700 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that it's Friday and that packers have already filled their need of hogs for the week, it's unlikely that Friday's marekt sees much interest.
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