GENERAL COMMENTS:
It was a trying week for the livestock complex as traders largely left the markets to fend for themselves but, by Friday, traders fully engaged in the day's trade and led all three markets to higher closes. The biggest win, however, was seeing sharply lower placements in the afternoon's Cattle on Feed report. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.51 with a weighted average price of $$93.52 on 2,311 head. December corn is up 7 1/4 cents per bushel and December soybean meal is up $8.30. The Dow Jones Industrial Average is down 24.25 points.
From Friday to Friday, livestock futures scored the following changes: August live cattle down $1.85, October live cattle down $2.50; August feeder cattle down $2.17, September feeder cattle down $2.92; October lean hogs up $0.80, December lean hogs steady; September corn up $0.05, December corn up $0.06.
LIVE CATTLE:
The live cattle complex finally found support in Friday's market as the contracts were able to close higher despite the fact that cattle sold steady to $1.00 lower this past week. Traders viewed the slight uptick in boxed beef prices as a positive thing as it's keeping packers engaged in the marketplace. With cold storage supplies incredibly low, packers aren't able to pull stored product and avoid the cash market all together. August live cattle closed $0.47 higher at $178.52, October live cattle closed $0.50 higher at $178.82 and December live cattle closed $0.65 higher at $183.17. Throughout the week, Southern live cattle traded at $177 to mostly $179, which is $1.00 softer than last week's weighted average. Northern dressed cattle traded anywhere from $290 to $298, but mostly at $294 to $295 which is steady to $1.00 lower.
Friday's slaughter is estimated at 118,000 head, 9,000 head more than a week ago and 5,000 head less than a year ago. Saturday's slaughter is projected to be around 9,000 head. The week's total slaughter is estimated at 616,000 head, 13,000 head more than a week ago and 48,000 head less than a year ago.
Boxed beef prices closed higher: choice up $1.97 ($316.11) and select up $2.10 ($288.36) with a movement of 92 loads (60.62 loads of choice, 17.93 loads of select, zero loads of trim and 13.89 loads of ground beef). Throughout the week, choice cuts averaged $310.40 (up $7.99 from last week) and select cuts averaged $284.57 (up $7.70 from last week) and the week's total movement of cuts, grinds and trim totaled 553 loads.
MONDAY'S CATTLE CALL: Steady to $1.00 higher. Given that packers are seeing higher box prices, it's likely that they'll remain active in the cash market even if that means they have to give $1.00 or so more for cattle.
FEEDER CATTLE:
If there was ever a Cattle on Feed report that the feeder cattle market wanted, Friday's report was it! With placements coming in at 1.62 million head, or 8% lower than a year ago, it's likely that next week's market is able to trade higher as traders will likely find the validity and support in Friday's report.
Throughout Friday's market, traders were supportive of the complex and led the market to a higher close, even though nearby corn prices closed higher too. August feeders closed $1.30 higher at $245.57, September feeders closed $1.40 higher at $248.52 and October feeders closed $1.37 higher at $250.07. The Oklahoma Weekly Cattle Auction Summary shared that feeder steers and heifers traded mostly steady. Steer calves under 500 pounds sold $3.00 to $8.00 lower while steers over 500 pounds sold $1.00 to $3.00 higher. Heifer calves traded steady to $2.00 higher. Slaughter cows sold $3.00 to $5.00 lower and slaughter bulls traded $3.00 to $4.00 softer. Feeder cattle supply over 600 pounds was 63%. The CME Feeder Cattle Index for Aug. 17: down $0.22, $244.04.
LEAN HOGS:
It was an incredible day for the lean hog complex as the contracts ran $1.00 to $2.00 higher after being pressured throughout most of the week's earlier trade. October lean hogs closed $2.97 higher at $82.12, December lean hogs closed $2.50 higher at $74.50 and February lean hogs closed $2.22 higher at $78.60. Friday's higher jolt didn't stem from tremendous fundamental support, but instead from traders who may have found a bottom in the market's current move. Pork cutouts totaled 315.92 loads with 295.08 loads of pork cuts and 20.84 loads of trim. Pork cutout values: down $1.62, $106.17. Friday's slaughter is estimated at 469,000 head, 13,000 head more than a week ago and 3,000 head more than a year ago. Saturday's slaughter is projected to be around 61,000 head. The CME Lean Hog Index for Aug. 16: down $0.71, $100.32.
MONDAY'S HOG CALL: Lower. Even though the week's market closed on a higher note, packers rarely show much support for the cash hog market on Mondays.
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