GENERAL COMMENTS:
Triple-digit gains quickly flooded through the cattle complex as traders focusing on previous market shifts quickly and aggressively became active buyers Thursday. Momentum seen in nearby live cattle and feeder cattle contracts are a combination limited support from Thursday's WASDE report and a renewed late day shift in outside financial markets. October feeder cattle futures became the shining star of the livestock complex Thursday afternoon, leading the market higher with gains of $2.25 per cwt. All nearby cattle trade posted triple digit gains Thursday, which is creating some underlying hope that renewed support will continue to develop through the end of the week. Hog futures remained under pressure Thursday, as traders continue to search for support levels during early September. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.25 with a weighted average of $76.00 on 2,018 hogs. December corn closed up 1 1/4 at $4.06 and December soybean meal closed up $3.20 at $323.20. The Dow Jones Industrial Average is up 221.77 at 41,083.48.
LIVE CATTLE:
Live cattle futures posted firmed in late day buyer support as traders not only focused on report data, but also the upward support in financial markets late Thursday helped to stimulate additional buyer support across the cattle complex. The fact that nearby live cattle futures still hover near intermediate term support levels and are well under the 40-day and 100-day moving averages is causing concern about the depth of buyer support still in the market in the absence of "good news" from outside markets. Thursday's export report showed net beef sales of 11,400 mt for 2024 were down 31% from the previous week and 41% from the prior 4-week average. The three largest buyers were South Korea (3,200 mt), Mexico (1,900 mt) and Japan (1,500 mt). The morning WASDE report released Thursday indicated mixed direction for cattle and beef markets. Beef production for 2024 was raised by 59 million pounds as cow slaughter in the second half of the year is expected to increase, and fed steer and heifer carcass weights are heavier. Third quarter steer prices in 2024 are expected to average $188 (down $5.00 from last month) and fourth quarter steer prices are expected to average $183 (down $7.00 from last month). Projections for 2025 steer prices in the first quarter are now expected to average $186 (down $3.00 from last month) and steer prices in the second quarter are expected to average $196 (down $4.00 from last month). Cash cattle markets are still generally quiet Thursday afternoon. A few deals have been reported in parts of Kansas and Nebraska this afternoon at $181 live, steady with last week's weighted averages. Some Southern asking prices remain firm around $182-plus. But in the North asking prices are still not fully established. A light trade was reported in the South yesterday with live deals marked at mostly $180 to $181, steady to $1 lower than the previous week's weighted averages. The North remained very quiet. October live cattle closed $1.08 higher at $178.025, December live cattle closed $1.38 higher at $178.60 and February live cattle closed $1.28 higher at $179.6.
Thursday's slaughter is estimated at 123,000 head, 1,000 head less than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed lower: choice down $0.87 ($307.36) and select down $2.63 ($294.38) with a movement of 162.04 loads (108.50 loads of choice, 28.36 loads of select, 3.74 loads of trim and 21.44 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Cash markets are still generally undeveloped with just a few deals reported Thursday afternoon as prices are generally steady with last week. This may lead to aggressive end of the week deal making, but there seems to be limited price direction expected.
FEEDER CATTLE:
Feeder cattle futures continue to remain on an aggressive market roll as triple digit gains in all nearby contracts further added to the weekly support developing in feeder cattle markets. With spot month September contracts now trading above $242 per cwt and posting an $8 per cwt gain through the week, traders are now looking at testing support levels set in August. A move above the $244.35 per cwt level could rekindle additional commercial and investment buyer interest back into the feeder cattle complex within the next few days. Underlying support from the monthly WASDE report is helping to bring renewed support to the entire complex at this point. September feeders closed $1.50 higher at $242.05, October feeders closed $2.25 higher at $239.75 and November feeders closed $1.45 higher at $235.475. The CME Feeder Cattle Index for September 10: down $1.14, $241.90.
LEAN HOGS:
Lean hog futures eroded through the day Thursday as trades are having a hard time finding "significant" market support available given upward moves in cattle and financial markets through the last half of the week. The most aggressive pressure developed in spot month October contracts, which continues to add concern to the entire complex with prices hovering near the 40-day moving average. The inability for the complex to hold onto last week's gains and subsequently allowing prices to move below the $80 per cwt price point is creating additional short and long-term market concerns for the entire lean hog complex. Thursday's export sales numbers posted Pork net sales of 29,700 mt for 2024 were up 43% from the previous week and 15% from the prior 4-week average. The three largest buyers were Mexico (14,200 mt), Japan (4,300 mt) and Colombia (2,400 mt). While monthly WASDE report data, also released Thursday posted mixed direction indicators. Pork production for 2024 was increased by 5 million pounds as faster chain speeds in the second half of the year more than offset the industry's lighter carcass weights. The market didn't see much for changes in quarterly barrow and gilt prices as the third quarter of 2024 is expected to average $63 and fourth quarter barrow and gilt prices are expected to average $54 -- both of which are unchanged from a month ago. However, price projections for the first half of 2025 did increase as the first quarter barrow and gilt prices are expected to average $55 (up $1.00) and prices in the second quarter are expected to average $61 (up $1.00). October lean hogs closed $0.85 lower at $78.90, December lean hogs closed $0.75 lower at $71.55 and February lean hogs closed $0.63 lower at $75.20. Thursday's hog slaughter is estimated at 483,000 head, 4,000 head more than a week ago and 1,000 head less than a year ago. Pork Cutouts totaled 376.06 loads with 309.80 loads of pork cuts and 66.26 loads of trim. Pork cutout values are down $1.89 at $92.91. The CME Lean Hog Index for September 10: down $0.28, $85.46.
FRIDAY'S HOG CALL: Steady to $1 Lower. Early week buyer activity is expected to continue to limit additional market aggressiveness by packers before the weekend break. This could lead to price pressure Friday morning.
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