GENERAL COMMENTS:
The lean hog complex rallied through Tuesday's end while the cattle complex saw mild support. Heading into Wednesday's market, the lean hog complex will be pressured to either defend its bold move or break back below resistance. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.61 with a weighted average price of $78.56 on 5,109 head. December corn is down 9 1/4 cents per bushel and December soybean meal is down $6.80. The Dow Jones Industrial Average is down 17.73 points.
LIVE CATTLE:
The live cattle complex closed mostly higher, although a few of the nearby contracts did close slightly lower. It's not that the market lacked support, but rather that traders were fixated on the big findings into Tuesday's USDA crop reports and spent little time trading the cattle contracts. October live cattle closed $0.07 lower at $184.15, December live cattle closed $0.17 higher at $188.45 and February live cattle closed $0.10 lower at $192.62. No cash cattle trade developed throughout the day and it's likely that trade is delayed until sometime after Wednesday. Tuesday's slaughter is estimated at 127,000 head, 1,000 head less than a week ago and 2,000 head less than a year ago.
Tuesday's WASDE report shouldn't gravely affect either the cattle or beef markets. Beef production for 2023 was decreased by 40 million pounds as lighter marketings are expected in the third quarter. It was mentioned, however, that this projection is coupled with the fact that carcass weights are heavier and cow slaughter speeds are expected to remain high in both the third and fourth quarters. Quarterly steers prices are unchanged from last month for both 2023 and 2024. Beef imports for 2023 grew by 35 million pounds from last month as high beef demand remains strong and ample supplies from Oceania continue to come in. Meanwhile, 2023 beef exports fell by 160 million pounds from last month as domestic supplies are tight.
Boxed beef prices closed lower: choice down $2.08 ($308.03) and select down $1.66 ($283.78) with a movement of 130 loads (74.80 loads of choice, 28.20 loads of select, 7.74 loads of trim and 19.67 loads of ground beef).
WEDNEDSAY'S CATTLE CALL: Steady. Given that packers have only bought vaguely in the cash market over the last three weeks, it's likely that prices remain steady if not see $1.00 or $2.00 added.
FEEDER CATTLE:
One would have thought that Tuesday's USDA findings of more harvested acres than expected would have sent the entire feeder cattle complex higher, but the spot and nearby contracts closed slightly lower while the rest of the market celebrated the likelihood of manageable feed costs moving forward. September feeders closed $0.90 lower at $255.32, October feeders closed $0.20 lower at $261.25 and November feeders closed $0.15 higher at $252.90. Given how high feeder cattle prices are, buyers needed the assurance that feed was going to be available and that it was going to be affordable. It's likely that Tuesday's report helps encourage more trade later this week, and well into the fall run. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to their last sale two weeks ago, feeder steers traded $1.00 to $4.00 higher and feeder heifers sold steady to $3.00 higher. Steer calves sold $2.00 to $4.00 lower and heifer calves traded $2.00 to $5.00 lower. Demand was called good for feeder cattle and moderate for calves. It was noted that there were several loads of unweaned calves available, which likely means that the fall run is indeed starting. Feeder cattle supply over 600 pounds was 52%. The CME Feeder Cattle Index for Sept. 11: up $0.46, $250.88.
LEAN HOGS:
The lean hog complex rallied throughout Tuesday's market despite Tuesday's WASDE report pointing to a lack of demand in the second half of 2023. Even so, the nearby contracts shot higher, breaking through resistance and not seeming to worry about what the WASDE report hinted at. October lean hogs closed $2.72 higher at $85.27, December lean hogs closed $2.25 higher at $76.90 and February lean hogs closed $1.40 higher at $80.25. Tuesday's slaughter is estimated at 477,000 head, 7,000 head more than a week ago and 3,000 head less than a year ago. Pork cutouts totaled 342.98 loads with 310.76 loads of pork cuts and 32.22 loads of trim. Pork cutout values: up $1.75, $101.20. The CME Lean Hog Index for Sept. 8: down $0.10, $86.17.
Tuesday's WASDE report comes as mixed news for the hog and pork markets. Pork production for 2023 was decreased by 105 million pounds as production speeds have been reduced and carcass weights are lighter. Barrow and gilt prices for 2023 saw a correction for the third and fourth quarters from last month's estimates, as now the third quarter is expected to average $69.00 (down $5.00 from last month) and the fourth quarter is expected to average $59.00 (down $4.00 from last month). Prices for 2024 are unchanged from a month ago. Imports for 2023 were increased by 25 million pounds, but 2023 exports were decreased by 125 million pounds as an effect of weaker demand.
WEDNESDAY'S HOG CALL: Steady. Prices could hold steady or see slightly better demand come Wednesday as packers haven't paid hardly any attention at all this week to the cash market. Although they'll likely only buy lightly again this week, they still need to buy some.
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