GENERAL COMMENTS:
Perhaps motivated by profit-taking after the livestock markets gave up on making new highs during the latter half of the week, futures traders sold off enough contracts Thursday afternoon to send cattle and hog prices plunging. Outside markets were no help, with the U.S. Dollar Index still headed higher after Wednesday's interest rate hike. Hog prices moved lower on the Daily Direct Afternoon Hog Report, down $4.12 with a weighted average of $94.03 on 6,811 head. Cash cattle saw light to moderate trade Thursday morning, with Southern live deals at $143 ($1 higher than last week) and Northern dressed deals at mostly $228 (also $1 higher than last week). December corn closed up 2 3/4 cents at $6.88 1/4 per bushel, and December soybean meal closed down $9.90 at $428.90 per ton. The Dow Jones Industrial Average is down 107.69 points.
LIVE CATTLE:
Losses in the live cattle futures market accelerated through the latter half of Thursday's trading session. October live cattle closed $1.025 lower at $144.85, December live cattle closed $1.40 lower at $149.35, and February live cattle closed $1.125 lower at $153.775. The timing of this sell-off, coming after Tuesday's fresh contract highs and ahead of Friday's Cattle on Feed report, definitely smacks of speculators' profit-taking or closing out positions to manage risk. In contrast, the reality of the cash market for fed cattle has remained hot again this week. Packers have paid up for needed supply. A light to moderate trade developed Thursday morning in all three major feeding areas, with Southern live deals marked at $143, which is $1 higher than last week's weighted averages. Northern dressed business is being marked at mostly $228, also $1 higher than last week's weighted average basis Nebraska. Some asking prices remain firm around $145 on a live basis and $230-plus dressed. Analysts on average are expecting the Friday Cattle on Feed report to show roughly the same Sept. 1 number of cattle on feed as a year ago, after a diminished beef herd contributed a lower quantity of August placements (estimated down 1.5% from last year).
Boxed beef prices closed lower again: choice down $0.73 ($248.40) and select down $4.03 ($222.11) with a movement of 186 loads (82.83 loads of choice, 57.88 loads of select, 7.41 loads of trim and 38.11 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: $1 higher. Packers have needed to buy cattle to fulfill their slaughter goals, and this week have been meeting the feedlots' asking prices at levels mostly $1 to $3 higher than last week.
FEEDER CATTLE:
Triple-digit losses in the feeder cattle contracts Thursday have emphasized the downward trend that has taken this market down more than $10 per cwt since mid-August. At the close, October feeders were $1.25 lower at $177.975, November feeders were $2.275 lower at $178.05, and January feeders were $2.025 lower at $179.95. Despite the unrelentingly expensive feed markets, the cash market for calves and feeder cattle is showing robust demand. Superior Livestock Auction's online sale on Thursday attracted active bidding, and many representative lots of 600- or 700-lb steers easily fetched around $200 per cwt. Salebarns across the countryside are also noticing active markets with lots of buyers and good demand, although prices have either stayed steady or slipped as much as $3 week over week. The CME Feeder Cattle Index 9/20/2022: down $0.10, $178.10.
LEAN HOGS:
As the pork market navigates a seasonal shift in which cuts will be most demanded by consumers, day-to-day prices may continue to be volatile. October lean hog futures closed $0.30 lower at $94.125, December lean hogs closed $0.775 lower at $85.675, and February lean hogs closed $0.90 lower at $89.75. From a chart perspective, the front-month October contract now has a wide range to flail around inside without testing either support or resistance between $89 and $98 per cwt. Pork packers have been able to find a fairly steady mix of domestic and export markets to buy their products, even without China leading the way anymore. Day-to-day weakness in the rib primal reminds the market that summer grilling season is over, and as of Thursday, it's now officially fall. Pork cutouts totaled 280.62 loads with 245.07 loads of pork cuts and 35.55 loads of trim. Pork cutout values: up $3.53, $103.88. The CME Lean Hog Index for 9/20 was down $0.40 at $97.96 and the projected index for 9/21 is up $0.05 at $98.01.
FRIDAY'S CASH HOG CALL: Steady. After the latest jump in the cash hog prices, the market may now be finding a plateau.
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