Thursday, August 15, 2024

Thursday Closing Livestock Market Update - Cattle Flop

GENERAL COMMENTS:

Traders grew impatient in waiting for the cash cattle market to trade and consequently both the live cattle and feeder cattle markets closed lower by Thursday's end. Still no substantial cash cattle trade has developed as feedlot managers are holding out for better money. December corn is down 3 3/4 cents per bushel and December soybean meal is up $4.00. The Dow Jones Industrial Average is up 554.67 points.

Thursday's export sales report shared that beef net sales of 28,100 metric tons (mt) for 2024 -- a marketing year high -- were up noticeably from the previous week and up 99% from the prior 4-week average. The three largest buyers were South Korea (11,400 mt), Japan (6,300 mt) and China (4,400 mt). Pork net sales of 20,900 mt -- a marketing year low -- were down 40% from the previous week and 30% from the prior 4-week average. The three largest buyers were Japan (8,300 mt), Mexico (3,300 mt) and South Korea (1,900 mt).

LIVE CATTLE:

Give and take, take and give -- the live cattle complex can't seem to win and find substantial technical footing in this marketplace following last week's dramatic sell off. Once again, the spot October contract close below the market's 100-day moving average as trades grew cold-footed in Thursday's market with the cash cattle market not having traded yet. One would think that positive market fundamentals such as stronger boxed beef prices and a marketing year high on today's export report would garish some clout, but traders didn't obviously see it that way. October live cattle closed $1.37 lower at $180.75, December live cattle closed $0.97 lower at $180.62 and February live cattle closed $0.50 lower at $181.75. A few cattle were sold in Eastern Nebraska for $298 which is $6.00 lower than last week's weighted average -- but with only a handful being traded at that price, I don't believe the market (or feedlot managers) are convinced that that's where the week's trend is going to be set at. 

Thursday's slaughter is estimated at 120,000 head -- 1,000 head less than a week ago and 3,000 head less than a year ago.

Boxed beef prices closed higher: choice up $2.06 ($316.94) and select up $1.53 ($302.03) with a movement of 119 loads (80.56 loads of choice, 15.53 loads of select, 8.17 loads of trim and 14.32 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady. I know that a few cattle were traded in Nebraska for cheaper prices, but with most of the market holding out for better money, I tend to believe that the week will see at least steady trade with boxed beef prices being supportive.

FEEDER CATTLE:

With the live cattle complex rounding out the day lower, the feeder cattle market had little hopes of closing higher itself as traders continue to be fixated on the market's technical influences as opposed to giving some merit to the market's positive fundamentals. August feeders closed $1.17 lower at $246.72, September feeders closed $0.67 lower at $243.67 and October feeders closed $1.20 lower at $240.90. There's a chance that the complex could trade higher on Friday if cash cattle trade higher -- but again, that's yet to be seen and much will depend simply on the direction in which the live cattle contracts trade. At Bluegrass Stockyards in Mt. Sterling, Kentucky compared to last week feeder steers sold $5.00 to $10.00 higher and feeder heifers traded steady to $5.00 higher. Slaughter cows traded $8.00 to $10.00 higher and slaughter bulls sold steady to $3.00 higher. Feeder cattle supply over 600 pounds was 50%. The CME feeder cattle index 8/14/2024: up $1.02, $246.34.

LEAN HOGS:

Traders were willing to shake off the morning's dreary export sales report as consumer demand was notably stronger in today's midday and closing reports. The afternoon carcass price wasn't up as much as the midday's report was (which was up $4.30) but a higher close is always a win for hog producers and with the $5.20 jump in the butt, the carcass price secured a higher end for the day. October lean hogs closed $0.57 higher at $76.50, December lean hogs closed $0.97 higher at $68.22 and February lean hogs closed $1.10 higher at $71.75. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.88 with a weighted average price of $85.31 on 4,668 head. Pork cutouts totaled 335.87 loads with 307.08 loads of pork cuts and 28.80 loads of trim. Pork cutout values: up $0.56, $99.87. Thursday's slaughter is estimated at 479,000 head -- 10,000 head more than a week ago and 6,000 head more than a year ago. The CME lean hog index 8/13/2024: down $0.16, $90.18.

FRIDAY'S HOG CALL: Lower. It's likely that packers have secured the vast majority of their cash needs for the week and won't actively participate much in Friday's cash market.




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