GENERAL COMMENTS:
It was a dismal day for the livestock complex as all three of the livestock markets rounded out Friday's market lower. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.54 with a weighted average price of $72.07 on 1,381 head. December corn is down 2 3/4 cents per bushel and December soybean meal is down $2.90. The Dow Jones Industrial Average is up 23.81 points.
From Friday to Friday, livestock futures scored the following changes: October live cattle up $2.05, December live cattle up $0.07; October feeder cattle up $1.50, November feeder cattle up $0.70; October lean hogs down $0.40, December lean hogs down $4.08; December corn up $0.01, March corn up $0.01.
LIVE CATTLE:
The live cattle contracts closed lower Friday afternoon as the market's rallying flame was simmered by the marketplace's gloomy, lackluster nature. What was most disappointing about Friday's performance is that the spot December contract did again close below its 40-day moving average. But with the week's cash cattle market being stronger, and packers showing relatively strong aggression toward the complex, the market still stands a chance at rebounding next week so long as fundamental support is ample. October live cattle closed $0.27 lower at $185.12, December live cattle closed $1.05 lower at $186.75 and February live cattle closed $1.07 lower at $190.92. Friday's cash cattle market was uneventful as packers had done most of their business earlier in the week. Throughout the week, Northern dressed deals have been mostly marked at $292, which is $3.00 higher than last week's weighted average. Southern live cattle have traded for mostly $183 to $184, which is $1.00 to $2.00 higher than last week's weighted average.
Beef net sales of 9,000 mt for 2023 were down 32% from the previous week and 29% from the prior four-week average. The three primary buyers were South Korea (2,400 mt), Japan (1,900 mt) and Mexico (1,800 mt).
Friday's slaughter is estimated at 112,000 head, steady with a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be around 6,000 head. The week's total slaughter is estimated at 617,000 head, 11,000 head less than a week ago and 45,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $0.39 ($300.80) and select up $0.47 ($275.49) with a movement of 92 loads (43.32 loads of choice, 12.73 loads of select, 15.51 loads of trim and 20.07 loads of ground beef). Throughout the week, choice cuts averaged $301.35 (up $1.42 from last week) and select cuts averaged $275.89 (up $0.30 from last week) and the week's total movement of cuts, grinds and trim totaled 696 loads.
MONDAY'S CATTLE CALL: Steady to $2.00 higher. Even though Friday's futures complex rounded out the week lower, packers are soberly aware that market-ready supplies of cattle through the fourth quarter are going to be thin and that they're going to need to stay engaged in the market to avoid becoming short-bought.
FEEDER CATTLE:
Friday's lackluster nature threw a curve at the livestock complex that the cattle contracts really didn't want to tango with. Throughout the week, the feeder cattle complex was supported and even able to climb above its 100-day moving average in the spot November contract, but Friday's dismal nature pulled the contract back below that threshold. October feeders closed $2.15 lower at $249.87, November feeders closed $2.00 lower at $251.57 and January feeders closed $2.22 lower at $252.25. Heading into next week's market traders will be closely watching the live cattle/cash cattle markets for support, as well as noting trends throughout the countryside as they yearn to better understand buyers' sediments. The Oklahoma Weekly Cattle Auction Summary shared that, compared to last week and throughout the entire state, feeder steers under 800 pounds traded $1.00 to $2.00 lower, and those over 800 pounds sold steady to $4.00 stronger. Feeder heifers sold $1.00 to $5.00 higher. Steer calves traded $2.00 to $4.00 higher and heifer calves traded $1.00 to $4.00 lower. Slaughter cows sold $1.00 to $3.00 higher and slaughter bulls traded $1.00 stronger. Feeder cattle supply over 600 pounds was 53%. The CME Feeder Cattle Index for Oct. 12: down $0.19, $250.11.
LEAN HOGS:
The lean hog complex was plagued by the same dreary nature that led the cattle complex lower through Friday's end. December lean hogs closed $0.60 lower at $69.50, February lean hogs closed $0.67 lower at $74.35 and April lean hogs closed $0.22 lower at $81.30. Packers are hoping consumer interest will be greater next week as better fundamental support is going to be necessary in order for the complex to trade higher. Pork cutouts totaled 310.35 loads with 285.01 loads of pork cuts and 25.34 loads of trim. Pork cutout values: down $1.64, $90.50. Friday's slaughter is estimated at 480,000 head, 4,000 head more than a week ago and 2,000 head more than a year ago. The CME Lean Hog Index for Oct. 11: up $0.02, $82.42.
Pork net sales of 21,100 mt for 2023 were down 51% from the previous week and 32% from the prior four-week average. The three largest buyers were Mexico (8,700 mt), Japan (3,500 mt) and Colombia (2,600 mt).
MONDAY'S HOG CALL: Somewhat higher. Given that packers elected to participate in this week's cash hog market early in the week as opposed to midweek like they normally do, it's likely that they'll begin procuring hogs again early next week.
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