GENERAL COMMENTS:
The livestock complex is trading mixed as both the live cattle and feeder cattle contracts work their way lower amid slightly higher corn prices and as traders stomach the steady to $1.00 lower trend in cash prices. Meanwhile, the lean hog complex is now trading higher after being pressured earlier in the week. December corn is up 4 1/4 cents per bushel and December soybean meal is down $0.20. The Dow Jones Industrial Average is down 50.31 points.
LIVE CATTLE:
The live cattle contracts are trading lower as traders continue to fester on the fact that the market is now trading below its 40-day moving average. The combination of weaker cash cattle trade and some technical pushback has the live cattle complex feeling more bearish than it does bullish for the time being. Long term, the market's realities haven't changed. However, fed cattle supplies will remain tight through the end of the year and so long as beef demand holds strong, these historically high price points should remain as common trading ground even if the market is currently enduring a bit of a lull. August live cattle are down $0.22 at $178.55, October live cattle are down $0.45 at $178.82 and December live cattle are down $0.57 at $183.00. Wednesday there was some light trade reported in both regions as Southern live cattle sold for $179 which is roughly $1.00 lower than last week's weighted average and Northern dressed cattle traded for $295 which is steady to $1.00 lower as well. Asking prices for cattle left on showlists is around $180 plus in the South and $296 plus in the North.
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 are higher: choice up $5.34 ($314.33) and select up $1.28 ($286.05) with a movement of 55 loads (29.47 loads of choice, 8.64 loads of select, 11.46 loads of trim and 5.00 loads of ground beef.
FEEDER CATTLE:
It comes as no surprise that the feeder cattle complex is trading lower given the fact that corn prices are trading slightly higher and that the live cattle/cash cattle markets are trending slightly lower. Feeder cattle enthusiasts continue to point to the long-term fact that feeder cattle supplies are thin and that excellent demand in the countryside is keeping sales strong. But as traders appraise the futures complex, there's an essence of hesitancy. August feeders are down $0.60 at $244.77, September feeders are down $1.35 at $247.62 and October feeders are down $1.32 at $249.65.
LEAN HOGS:
The lean hog complex is now trading higher as traders are pleased with the slight uptick in pork exports and given that the market has worked its way lower earlier this week it no longer is up against immediate resistant pressure. October lean hogs are up $1.47 at $79.65, December lean hogs are up $1.07 at $72.25 and February lean hogs are up $1.00 at $76.57. The cash cattle market hasn't seen much interest at all, only 565 head were reported on this morning's cash report, and given the volatility in pork cutout values, this week's movement could be light.
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).
The projected lean hog index for Aug. 16 is down $0.71 at $100.32 and the actual index for Aug. 15 is down $0.90 at $101.03. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.46 with a weighted average price of $92.28, ranging from $90.00 to $92.50 on 565 head and a five-day rolling average of $95.00. Pork cutouts total 127.04 loads with 104.91 loads of pork cuts and 22.12 loads of trim. Pork cutout values: up $0.68, $107.95.
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