GENERAL COMMENTS:
It was a mixed day for the livestock complex as the markets saw hit and miss demand, with feeder cattle closing completely lower while both the live cattle and lean hog markets saw a mixed end to the day. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.51 with a weighted average of $86.89 on 3,859 head. December corn is up 7 3/4 cents per bushel and December soybean meal is up $7.30. The Dow Jones Industrial Average is down 630.15 points.
Friday to Friday, livestock futures scored the following changes: October live cattle up $2.04, December live cattle up $1.00; October feeder cattle up $0.55, November feeder cattle $1.00; October lean hogs up $3.73, December lean hogs up $0.93; December corn up $0.06, March corn up $0.07.
LIVE CATTLE:
Slowly but surely, the live cattle market rounded out the week on a higher note as the complex clung to stronger beef demand and the fact that cash cattle traded higher again this week. Both are factors that will likely continue to be noted in the weeks ahead as seasonal boxed beef demand should only grow stronger and limited front-end supplies will keep packers active in the cash marekt through the end of the year. The two questions that I want to leave you with for the weekend are: 1) Will the boxed beef marekt see the season uptick like it normally does amid a weakened economy with rising interest rates and untamed inflation? 2) How high could cash cattle prices get before the year's end?
October live cattle closed steady at $145.32, December live cattle closed $0.17 higher at $148.05 and February live cattle closed $0.12 higher at $151.75. Throughout the week, Southern live cattle have traded at $144, which is $1.00 higher than last weeks weighted average and Northern dressed cattle sold mostly for $230, which is also $1.00 higher than last week's weighted average.
Fresh beef imports for the week totaled 21,245 metric tons, with Canada, Mexico and Australia carrying the lion's share of the trade. To date, fresh beef imports in 2022 are 7% higher than compared to a year ago. Processed beef imports for the week totaled 1,628 metric tons with Brazil contributing 63% of the shipment. To date, processed beef imports in 2022 are 18% higher than compared to a year ago.
Friday's slaughter is estimated at 118,000 head, 3,000 head more than a week ago and 4,000 head more than a year ago. Saturday's slaughter is projected to be 36,000 head. The week's total slaughter is estimated at 664,000 head, steady with a week ago and 7,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.29 ($246.07) and select down $0.86 ($216.13) with a movement of 133 loads (72.49 loads of choice, 29.63 loads of select, 12.11 loads of trim and 19.26 loads of ground beef). Throughout the week choice cuts averaged $246.89 (up $0.16 from last week) and select cuts averaged $219.11 (down $1.62 from last week) with a total movement of cuts, grinds, and trim totaling 726 loads.
MONDAY'S CASH CATTLE CALL: Higher. With throughput continued to push more than 660,000 head a week, packers will likely have to keep supporting the cash market to ensure that they have enough cattle for their upcoming kills.
FEEDER CATTLE:
With the corn market able to sustain a $0.07 rally through closing, the feeder cattle market didn't even attempt to try to trade higher. October feeder cattle closed $1.00 lower at $174.72, November feeder cattle closed $0.80 lower at $175.62 and January feeders closed $1.25 lower at $176.60. Cattle buyers were hesitant about calves again this week as the market's break-evens are risky and, given the uncertain nature of the U.S. and world economies, there's a lot at stake and much at risk. The live cattle market is expected to gain more momentum as time passes by with boxed beef prices likely to see more support and cash cattle prices expected to keep on a steady upswing, all of which should help propel the feeder cattle market, but it could take some time. Oklahoma's Weekly Cattle Auction Summary shared that, compared to last week and throughout the entire state, feeder steers traded steady to $2.00 lower and feeder heifers sold steady to $4.00 lower. Steer and heifer calves traded $3.00 to $6.00 back. Slaughter cows sold $4.00 to $8.00 lower and slaughter bulls traded $5.00 to $7.00 lower. Feeder cattle supply over 600 pounds was 43%. The CME Feeder Cattle Index for Oct. 6: down $0.77, $174.92.
LEAN HOGS:
The lean hog complex liked the idea of closing higher but its support was spotty, which led the marekt to a mixed close Friday afternoon. December lean hogs closed $0.62 lower at $77.15, February lean hogs closed $0.35 lower at $79.95 and April lean hogs closed $0.22 lower at $85.40. The market has seen relatively strong pork demand as, little by little, the market continues to see it's carcass value increase. Friday's pork carcass was able to close higher thanks to the $4.08 gain in belly prices and $2.79 jump in loins. With the cooler weather settling in across the country, pork is seeing better demand as American's begin to utilize their ovens and crockpots again. Friday's slaughter is estimated at 480,000 head, 27,000 head more than a week ago and 7,000 head more than a year ago. Saturday's slaughter is projected to be around 150,000 head. Pork cutouts totaled 263.88 loads with 229.69 loads of pork cuts and 34.20 loads of trim. Pork cutout values: up $0.13, $101.54. The CME Lean Hog Index for Oct. 5: down $0.16, $92.77.
MONDAY'S CASH HOG CALL: Lower. It's likely that the cash market doesn't see stellar demand until later in the week, but when it does, prices could very well trade higher.
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