GENERAL COMMENTS:
The entire livestock complex closed lower Friday afternoon as traders were virtually nowhere to be down in today's marketplace. The cash cattle market saw a little more trade develop, but prices remained steady with Thursday's trade. December corn is up 4 3/4 cents per bushel and December soybean meal is up $8.40. The Dow Jones Industrial Average is down 610.71 points.
From Friday-to-Friday, livestock futures scored the following changes: August live cattle down $4.47, October live cattle down $6.47; August feeder cattle down $10.05, September feeder cattle down $11.45; August lean hogs down $1.27, October lean hogs down $1.63; September corn down $0.08, December corn down $0.07.
LIVE CATTLE:
I put a lot of time and thought into how I was going to summarize this week's trade for the cattlemen who are probably anxiously clicking to read DTN's closing comments for the week after hearing that the cattle complex has taken a royal beating over the last two days. Unfortunately, this week's trade was gravely affected by the outside pressures of our weakened economy, the news that unemployment increased to 4.3% in July and the noticeable decline in the Dow Jones. It's likely that some long positions were pulled from the live cattle complex to cover losses elsewhere, which trigger a knee jerk reaction from the greater market as a whole. From a fundamental standpoint, not much has changed as the market continues to trek through the dog days of summer when throughput is seasonally slow, boxed beef prices soften and it's hot and miserable outside for everyone. All that aside, what makes these gut-wrenching turns even harder to stomach is realizing that not every turn the market makes has to be rational or justified on sound logic. Sometimes traders are just trading and moves get overdone -- much like they did this past week, in my opinion.
August live cattle closed $0.70 lower at $184.10, October live cattle closed $1.65 lower at $182.07 and December live cattle closed $2.40 lower at $182.20. Throughout the week Southern live cattle traded at $188 which is $2.00 lower than last week's weighted average and Northern dressed cattle traded at mostly $310 which is also $2.00 lower than last week's weighted average.
Friday's slaughter is estimated at 116,000 head – 6,000 head more than a week ago and 1,000 head more than a year ago. Saturday's slaughter is projected to be around 3,000 head. The week's total slaughter is estimated at 593,000 head -- 7,000 head less than a week ago and 22,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $0.98 ($313.77) and select down $0.29 ($297.17) with a movement of 110 loads (72.25 loads of choice, 19.97 loads of select, 6.04 loads of trim and 11.86 loads of ground beef).
MONDAY'S CATTLE CALL: Lower. Given that packers were able to back the cash market up this past week, it's likely that they'll try to get cattle bought cheaper again next week too.
FEEDER CATTLE:
The feeder cattle complex dove even lower through Friday's trade as the market simply couldn't gain any footing ahead of Friday's close. August feeders closed $3.50 lower at $249.65, September feeders closed $3.65 lower at $248.15 and October feeders closed $4.30 lower at $246.57. Unfortunately, the market's plumet pushes the spot September contract to the lowest position that it has traded at since April. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week on an uneven test, steers traded $4.00 lower to $4.00 higher, and heifers traded $6.00 lower to $6.00 higher. Feeder cattle supply over 600 pounds was 72%. The CME feeder cattle index 8/1/2024: down $0.10, $257.72.
LEAN HOGS:
Even the lean hog complex rounded out Friday's end lower. But unlike the tough technical pressure endured in the cattle complex, the lean hog market closed steady to somewhat lower as traders simply didn't want to advance the market on Friday and creep into territory that nears resistance. August lean hogs closed $0.95 lower at $92.20, October lean hogs closed $0.45 lower at $76.57 and December lean hogs closed $0.17 lower at $69.15. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.16 with a weighted average price of $84.07 on 355 head. Pork cutouts totaled 233.57 loads with 199.81 loads of pork cuts and 33.76 loads of trim. Pork cutout values: down $1.55, $104.31. Friday's slaughter is estimated at 476,000 head -- 38,000 head more than a week ago and 58,000 head more than a year ago. Saturday's slaughter is projected to be around 63,000 head. The CME lean hog index 7/31/2024: up $0.45, $93.53.
MONDAY'S HOG CALL: Lower. Packers rarely support Monday's cash market and after buying aggressively this week it's not likely that they'll have to do so come Monday.
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