GENERAL COMMENTS:
It's been a busy morning for the livestock complex as traders glimpsed over the morning's WASDE report and are noting the cash cattle trade developing in the countryside right now. Northern dressed cattle are trading anywhere from steady to $3.00 higher, which means this afternoon's business could do anything. December corn is up 1 3/4 cents per bushel and December soybean meal is down $1.10. The Dow Jones Industrial Average is up 59.75 points.
LIVE CATTLE:
Traders may be sidelining the live cattle complex as Friday's noon hour nears, but with the quarterly price changes made in Friday's WASDE report, just give them a little more time and the market could turn higher later this afternoon! August live cattle are down $0.15 at $180.95, October live cattle are down $0.45 at $182.05 and December live cattle are down $0.37 at $186.22. Another light round of trade has developed in Nebraska where dressed cattle are selling for $295, which is fully steady with last week's weighted average. And another jag of business has been reported in Iowa, where prices were marked at $298, which is $3.00 higher than last week's weighted average. Asking prices in the North are noted at $296-plus and in the South at $182-plus. More trade will likely develop this afternoon, and at this point prices could do about anything!
Friday's WASDE report shared mixed news for the cattle and beef markets. First, production for 2023 was decreased by 180 million pounds as both fed steer and heifer slaughter speeds have been reduced and dressed weights are expected to remain lighter than originally anticipated. However, it was interesting to note that the report said cow slaughter speeds remain elevated and are expected to remain high in the first part of 2024 -- indicating any sort of build-back in the U.S. beef cowherd has not yet started. Quarterly steer prices saw a big increase from last month as packer demand has remained incredibly strong. Steer prices in the third quarter of 2023 are now expected to average $184 (up $6.00 from last month) and fourth quarter steers prices in 2023 are now expected to average $190 (up $7.00 from last month). Quarterly steer prices in the first quarter of 2024 are expected to average $188 (up $2.00 from last month) and second-quarter steer prices in 2024 are expected to average $186 (up $4.00 from last month). 2023 beef imports fell by nine million pounds, and 2023 beef exports remained unchanged from last month.
Boxed beef prices are mixed: choice up $0.61 ($302.64) and select down $0.60 ($277.20) with a movement of 56 loads (40.44 loads of choice, 7.61 loads of select, zero loads of trim and 8.43 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex has petered out as Friday's market nears the noon hour. Yes, corn prices are slightly higher, but with the nearby contracts only trending a penny higher at this point, that's not enough to derail feeders. The feeder cattle market's hesitancy likely stems from the fact that the live cattle complex is trading timidly and after advancing the market aggressively through Thursday's trade, traders are likely just taking a more cautious approach to Friday's marketplace.
August feeders are down $0.10 at $247.90, September feeders are down $0.15 at $251.42 and October feeders are down $0.30 at $253.02.
LEAN HOGS:
The lean hog complex is again rallying as traders worked the complex lower earlier this week and are no longer in immediate fear of coming up against resistance thresholds. Friday's WASDE report shared supportive news for cash prices as both the third and fourth quarter of 2023 saw big price increases from last months' report. October lean hogs are up $1.10 at $81.42, December lean hogs are up $0.52 at $74.30 and February lean hogs are up $0.32 at $78.35.
The projected CME Lean Hog Index for 8/10/2023 is down $0.85 at $103.06, and the actual index for 8/9/2023 is down $0.43 at $103.91. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.16 with a weighted average price of $96.19, ranging from $92.00 to $98.00 on 3,137 head and a five-day rolling average of $98.64. Pork cutouts total 178.15 loads with 166.50 loads of pork cuts and 11.65 loads of trim. Pork cutout values: up $0.51, $113.52.
Friday's WASDE report shared mixed news as well for the pork and hog markets. First, production for 2023 was decreased by 107 million pounds as lighter dressed weights don't offset the slight raise in slaughter speed. Pork production for 2024 remained unchanged. Hog prices for 2023 saw a big increase from last month to reflect the current market's strength. For 2023, in the third quarter hog prices are expected to average $74.00 (which is $11.00 higher from last month), and fourth quarter prices are expected to average $63.00 (which is $6.00 higher from last month). For 2024, no quarterly price changes were made. 2023 pork imports were increased by 6 million pounds, but exports were also increased by 13 million pounds.
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