GENERAL COMMENTS:
The lean hog complex didn't see the support that the cattle contracts did through Friday's end but, all in all, Friday's market was rather supportive. Finally, cash cattle trade was noted in the South for $180 which is $1.00 to $2.00 higher than last week's weighted average. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.12 with a weighted average price of $79.14 on 2,962 head. December corn is down 2 1/2 cents per bushel and December soybean meal is up $6.10. The Dow Jones Industrial Average is up 62.44 points.
From Friday to Friday, livestock futures scored the following changes: October live cattle up $3.07, December live cattle up $3.25; September feeder cattle up $3.50, October feeder cattle up $4.50; October lean hogs down $1.52, December lean hogs down $0.15; September corn up $0.04, December corn up $0.02.
LIVE CATTLE:
It was a tremendous week for the live cattle complex and even though the spot and nearby contracts (October and December) closed slightly lower, the market's momentum continued well through Friday's end. Traders boldly supported the market this past week as they seemed to re-believe in the market's long-term bullish outlook. It's a little early for the fall run to be kicking off, but the excitement seen this past week in the market has everyone wondering if this year's fall rally will have started in the early part of September. October live cattle closed $0.42 lower at $183.22, December live cattle closed $0.07 lower at $187.42 and February live cattle closed $0.30 higher at $191.70. Throughout the day, the market saw some light trade develop in the South for $180 which is $1.00 to $2.00 higher than last week's weighted average. A light trade was reported in the North Thursday afternoon at $290, which is steady with the previous week, but sales were thin through Friday in the North.
Friday's slaughter is estimated at 125,000 head, 3,000 head more than a week ago and 3,000 head less than a year ago. Saturday's slaughter is projected to be around 51,000 head. The week's total slaughter is estimated at 559,000 head - incomparable to a week ago but 47,000 head less than a year ago.
Beef net sales of 11,900 mt for 2023 were down 34% from the previous week and 20% from the prior four-week average. The three primary buyers were Japan (4,100 mt), South Korea (2,100 mt) and China (1,600 mt).
Boxed beef prices closed mixed: choice up $1.24 ($312.90) and select down $0.12 ($286.05) with a movement of 107 loads (52.35 loads of choice, 19.08 loads of select, 13.18 loads of trim and 22.56 loads of ground beef). Throughout the week choice cuts averaged $313.48 (down $1.55 from last week) and select cuts averaged $287.34 (down $2.82 from last week) and the week's total movement of cuts, grinds, and trim totaled 535 loads.
MONDAY'S CATTLE CALL: Steady. Packers aren't willingly going to give the market anything as they know that this is their time to pump the brakes on the cash complex. Having said that, they could have to support the market more than they'd ideally like as they were passive in the cash arena over the past two weeks.
FEEDER CATTLE:
The feeder cattle complex had another strong day as traders thought their only option was to mildly support the complex given that cash cattle sales sold steady to $2.00 higher, the live cattle complex closed mostly higher and corn prices again rounded out the day lower. The spot September contract did close slightly lower, but the rest of the market rallied on the tremendous support that was seen this week from both the market's futures and fundamentals. September feeders closed $0.22 lower at $255.35, October feeders closed $0.27 higher at $259.15 and November feeders closed $0.35 higher at $260.62. The October contract did close at yet another new contract high for the contract! Most feeder cattle sales noted light receipts this week, which made it hard for weekly comparisons to be made. Strong tones were noted in the sales that did see large runs, but until late September, light receipts may be the tone of the market ahead of the fall run. The CME Feeder Cattle Index for Sept. 7: down $0.12, $249.21.
LEAN HOGS:
To no one's surprise, the lean hog complex let Friday's hours pass it by and closed lower as traders were unwilling to break through the market's resistance ahead of the weekend. Pork cutout values were able to close higher, but the cash market continues to trade thinly. October lean hogs closed $1.30 lower at $81.52, December lean hogs closed $0.82 lower at $74.45 and February lean hogs closed $0.62 lower at $78.55. Pork cutouts totaled 205.83 loads with 178.60 loads of pork cuts and 27.23 loads of trim. Pork cutout values: up $3.59, $97.80. Friday's slaughter is estimated at 474,000 head, 8,000 head more than a week ago and 7,000 head less than a year ago. Saturday's slaughter is projected to be around 348,000 head. The CME Lean Hog Index for Sept. 6: up $0.18, $86.19.
Pork net sales of 26,300 mt for 2023 were down 29% from the previous week and 13% from the prior four-week average. The three primary buyers were Mexico (8,500 mt), Japan (4,700 mt) and South Korea (3,300 mt).
MONDAY'S HOG CALL: Steady. At this point, packers show no interest in changing their buying strategy regarding the cash hog market.
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