GENERAL COMMENTS:
The cattle contracts found support in Thursday's market as feedlots continue to turn down packers' bids and are actively trying to keep prices steady. Friday will be a busy day for the complex as cash cattle need to trade and as the USDA will release another WASDE report mid-morning. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.58 with a weighted average price of $95.98 on 4,888 head. December corn is up 2 cents per bushel and December soybean meal is up $2.90. The Dow Jones Industrial Average is up 128.56 points.
LIVE CATTLE:
Thursday's trade was overall supportive of the live cattle complex as feedlots mostly scoffed at packers' bids and merely told them to come back on Friday with more money. Bids of $177 live were offered in the South, and live bids of $188 were offered in the North along with dressed bids of $295. Northern asking prices still aren't known but with Southern feedlots seeking $182-plus, packers are going to need to get more aggressive if they'd like to buy more cattle this week. A light trade developed in Kansas at $186, and some dressed business at $292 to $299, but largely the market still needs to see more cattle to get an accurate trend. Ideally, in packers' minds, it would be a beautiful scenario if they could get cattle bought $1.00 to $3.00 cheaper this week as slightly higher boxed beef prices (seen throughout the week) and lower cash helps their bottom line. But with feedlots fully engaged in the cash cattle market's battle, packers have their work cutout for them again this week and it's tough telling how the week's weighted average will fall, and who it will favor. August live cattle closed $0.52 higher at $181.10, October live cattle closed $0.82 higher at $182.52 and December live cattle closed $1.10 higher at $186.60.
Thursday's slaughter is estimated at 122,000 head, 1,000 head less than a week and year ago.
Thursday's actual slaughter data shared that, for the week ending July 29, steers averaged 895 pounds, which is 2 pounds more than the previous week and 3 pounds more than the same week a year ago. During the same week, heifers averaged 812 pounds, which is steady with the previous week but still 2 pounds less than a year ago.
Beef net sales of 14,800 mt for 2023 were up 19% from the previous week, but down 8% from the prior four-week average. The three primary buyers were South Korea (5,300 mt), Japan (2,600 mt) and China (2,400 mt).
Boxed beef prices closed lower: choice down $1.49 ($302.03) and select down $0.34 ($277.80) with a movement of 107 loads (65.43 loads of choice, 20.19 loads of select, 7.77 loads of trim and 13.75 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $1.00 higher. Feedlots have mostly held out to trade cattle on Friday which could mean that prices hold steady come Friday or even trade slightly higher.
FEEDER CATTLE:
The feeder cattle complex didn't seem to mind that corn prices rounded out the day just slightly better than steady as the market found more than enough support from active feeder cattle sales in the countryside. August feeders closed $0.85 higher at $248.00, September feeders closed $0.95 higher at $251.57 and October feeders closed $1.17 higher at $253.32. The feeder cattle complex also found support in the fact that feedlots continue to aggressively work the cash cattle market and aim to keep prices at least steady, if they aren't able to squeeze another $1.00 or $2.00 out of packers. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, steers weighing 850 pounds and up were selling steady to $3.00 higher and heifers weighing 850 pounds and up sold $5.00 to $9.00 stronger. It was interesting to note that load lots fresh off grass feeders brought top dollar and sold $6.00 to $9.00 higher. Feeder cattle supply over 600 pounds was 99%. The CME Feeder Cattle Index for Aug. 9: up $0.46, $245.42.
LEAN HOGS:
Thursday's market was a disappointment for the hog complex as the futures market ran lower and cash prices closed lower, but pork cutout values closed $3.89 higher with a big jump seen again the belly. With there being so much uncertainty surrounding the hog complex and how the market will be affected once Prop 12 is instated in December, an underlying tone of caution, concern and unknowingness lingers throughout the marketplace. October lean hogs closed $1.25 lower at $80.32, December lean hogs closed $1.25 lower at $73.77 and February lean hogs closed $1.30 lower at $78.02. Thursday's slaughter is estimated at 474,000 head, 4,000 head more than a week ago and 10,000 head more than a year ago. The CME Lean Hog Index for Aug. 8: down $0.24, $104.34.
Pork net sales of 22,300 mt for 2023 were up 25% from the previous week and up 3% from the prior four-week average. The three primary buyers were Mexico (6,000 mt), Japan (4,500 mt) and China (3,000 mt).
FRIDAY'S HOG CALL: Lower. Given that the hog complex is extremely volatile right now, it's unlikely that prices trade higher on Friday as packers will only likely buy a few head to round the week out.
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