GENERAL COMMENTS:
Cattle
contracts weren't as powerful this Friday as they were last week, but
with the cattle contracts stepping to the sidelines, the lean hog
complex was able to gain traction and blow past nearby resistance.
Hog
prices closed higher on the National Direct Afternoon Hog Report, up
$0.17 with a weighted average of $38.11 on 8,212 head. December corn is
down 3 cents per bushel and December soybean meal is down $1.60. The Dow
Jones Industrial Average is up 39.98 points and NASDAQ is down 101.79
points.
From Friday to Friday livestock
futures scored the following changes: August live cattle down $0.03,
October live cattle down $1.43; August feeder cattle down $1.95,
September feeder cattle down $1.10; August lean hogs down $1.00, October
lean hogs down $1.35.
LIVE CATTLE:
Live
cattle contracts weren't granted any favors throughout Friday's trade
as contracts closed $0.07 to $0.87 lower. August live cattle closed
$0.17 higher at $102.80, October live cattle closed $0.52 lower at
$106.45 and December live cattle closed $0.87 lower at $110.07. Traders
seemed to grow leery of the market as the momentum in the feeder cattle
contracts was weakening in the later part of the week, and coming off
last week's rally, pushing contracts higher seemed risky. Friday's cash
cattle trade was quiet as the cattle that did trade were mostly steady
with the week's earlier accomplishments. Cattle traded in Iowa for $163
to $164, some cattle traded in Nebraska for $163 and Kansas moved some
cattle late Friday afternoon for $100. Friday's slaughter is estimated
at 109,000 head -- 4,000 head less than a week ago and 8,000 head less
than a year ago. Saturday's kill is projected to be around 60,000 head.
Boxed
beef prices closed higher: choice up $0.81 ($205.47) and select up
$0.74 ($192.75) with a movement of 116 loads (64.21 loads of choice,
14.99 loads of select, 15.53 loads of trim and 20.93 loads of ground
beef).
MONDAY'S CASH CATTLE CALL: Steady to
slightly higher. Feeders will be anxious to price cattle higher again as
they were able to move the market higher this week and really push on
packers. Packers may push back as the lack of demand from the restaurant
sector is changing their customary marketing structure.
FEEDER CATTLE:
Friday's
pressure grew stronger as the day traded through the afternoon and the
market's downward trend captured most of the feeder cattle contracts.
August feeder cattle closed $0.75 lower at $142.72, September feeder
cattle closed $0.75 lower at $145.12 and October feeder cattle closed
$0.37 lower at $146.40. With feeder cattle sales continuing to ring the
bell across the nation, next week's market is going to have to face the
same challenge as weeks past: is there enough support to surpass
resistance and keep above the $143.85 threshold or will the market fear a
topping chart and simply trade sideways with little aggression? Iowa's
weekly cattle report shared that on average, compared to a week ago
feeder steers weighing 500 to 825 pounds sold steady to $10.00. And
feeder heifers weighing 500 to 725 pounds sold $1.00 to $5.00 higher.
The CME feeder cattle index 8/6/2020: up $1.13, $141.92.
LEAN HOGS:
The
lean hog complex heads into the week with three strong motivators for
next week's trade: a stronger close through the futures complex, a
stronger cutout value and higher cash hog prices! August lean hogs
closed $1.25 higher at $51.00, October lean hogs closed $1.77 higher at
$50.97 and December lean hogs closed $1.42 higher at $52.92. One of the
market's biggest challenges is taking care of its nearby contracts, as
the first and second quarter of 2021 are far more favorable. Pork
cutouts totaled 341.72 loads with 300.49 loads of pork cuts and 41.23
loads of trim. Pork cutout values: up $1.13, $71.93. Friday's slaughter
is estimated at 474,000 head, steady with a week ago and 25,000 head
more than a year ago. Saturday's kill is projected to be around 230,000
head. The CME lean hog index 8/5/2020: down $0.14, $52.78.
MONDAY'S
CASH HOG CALL: Steady. It was encouraging to see packers not only pay
slightly more for hogs Friday afternoon but to also see over 8,000 head
trade. If the market's momentum can carry into next week, prices may be
able to trade steady instead of scaling lower.
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