GENERAL COMMENTS:
It was a gloomy day for the cattle complex as traders virtually left the market to fend for itself, but the hog complex did catch a break and was able to close higher after being worked lower earlier this week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.44 with a weighted average price of $93.01 on 1,689 head. December corn is up 4 1/4 cents per bushel and December soybean meal is down $1.90. The Dow Jones Industrial Average is down 291.84 points.
LIVE CATTLE:
The live cattle complex struggled to find adequate support in Thursday's market and ultimately was left high and dry to round out the day on a weaker note. A gloomy tone has taken root in the live cattle complex as traders are now trading the spot October contract below the market's 40-day moving average. Bears cling and point to the fact that processing speeds have been reduced, that showlists could begin to build and that cash prices are weaker. Still, some bull-spreaders continue to point to the long-term outlook and believe that long-term demand will keep the market strong. Adding additional pressure is the fact that tomorrow a new Cattle on Feed report will be released and whenever it's a COF report week, traders drawback and wait as they don't want to get caught being too supportive of the market if something bearish pops up in the report. So far this week, Southern live deals have been marked at $178 to mostly $179, roughly $1 lower than last week's weighted average. Northern dressed deals have had a range of $292 to $298, mostly $295, steady to $1 lower than last week's weighted averages. August live cattle closed $0.72 lower at $178.05, October live cattle closed $0.95 lower at $178.32 and December live cattle closed $1.05 lower at $182.52.
Thursday's slaughter is estimated at 122,000 head, steady with a week ago but 5,000 head less than a year ago.
Thursday's actual slaughter data shared that, for the week ending Aug. 5, steers averaged 895 pounds, which is steady with the previous week but 3 pounds heavier than a year ago. During the same week heifers averaged 811 pounds, which is 1 pound lighter than the previous week and 3 pounds lighter than a year ago.
Beef net sales of 15,100 mt for 2023 were up 2% from the previous week but down 13% from the prior four-week average. The three largest buyers were South Korea (4,600 mt), China (3,200 mt) and Japan (2,700 mt).
Boxed beef prices closed higher: choice up $5.15 ($314.14) and select up $1.49 ($286.26) with a movement of 100 loads (60.19 loads of choice, 18.12 loads of select, 13.46 loads of trim and 7.83 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Given that cattle have traded in both regions, prices will likely remain steady with the week's tone at this point.
FEEDER CATTLE:
The feeder cattle complex closed lower as traders ran to the sidelines of Thursday's market given the pressure that seemed to brew throughout the day. Whether it be the added pressure of slightly higher corn prices, the added pressure of a weaker cash cattle market, or the unknowingness of what Friday's Cattle on Feed report will disclose, traders packed their bags and ran home and essentially deemed that they'd be back to trade the market when answers surface. August feeders closed $1.10 lower at $244.27, September feeders closed $1.87 lower at $247.12 and October feeders closed $1.65 lower at $249.32. The CME Feeder Cattle Index for Aug. 16: down $0.68, $244.26.
LEAN HOGS:
The lean hog complex kept with its moderately energetic tone through Thursday's closing, which came as a pleasant surprise given the hardship that the complex endured earlier in the week. But now that traders have worked the contracts lower and are no longer in immediate danger of resistant levels, they can again breathe easier and let the market trade on what it sees fundamentally. The fundamental outlook for the hog market remains a questionable environment with so much of the market changing ahead of Prop 12. Needless to say, volatile price swings are expected to continue, and traders and hog producers alike will continue to scout for answers as they seek for better market clarity. October lean hogs closed $0.97 higher at $79.15, December lean hogs closed $0.82 higher at $72.00 and February lean hogs closed $0.80 higher at $76.37. Pork cutouts totaled 209.70 loads with 179.41 loads of pork cuts and 30.49 loads of trim. Pork cutout values: up $0.52, $107.79. Thursday's slaughter is estimated at 476,000 head, 2,000 head more than a week ago and steady with a year ago. The CME Lean Hog Index for Aug. 15: down $0.90, $101.03.
Pork net sales of 28,700 mt for 2023 were up 29% from the previous week and 36% from the prior four-week average. The three largest buyers were Mexico (9,400 mt), Japan (4,900 mt) and China (3,500 mt).
FRIDAY'S HOG CALL: Lower. Given that traders hardly paid the cash hog market any attention through Thursday's market likely means that they'll be even less engaged in the marketplace come Friday.
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