GENERAL COMMENTS:
Rounding out another week, the livestock complex closed mixed as cattle contracts closed lower, but the lean hog complex rallied heading into the weekend. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.14 with a weighted average of $64.74 on 9,863 head. December lean hogs are up $1.15 at $64.425, December corn is up 1 3/4 cents per bushel and December soybean meal is up $2.10. The Dow Jones Industrial Average is up 358.52 points and NASDAQ is up 241.29 points.
From Friday to Friday livestock futures scored the following changes: October live cattle up $0.23, December live cattle down $0.45; October feeder cattle down $2.10, November feeder cattle down $2.38; October lean hogs up $5.25, December lean hogs up $0.90.
LIVE CATTLE:
The live cattle complex fell lower as Friday progressed and headed into the weekend $0.07 to $1.05 lower. October live cattle closed $0.45 lower at $107.57, December live cattle closed $0.87 lower at $111.40 and February live cattle closed $105 lower at $114.60. As the day neared closing, worry about how much September's Cattle on Feed (COF) report would affect the marketplace grew. If looked at out of an analytical mindset, the report shouldn't wreck too much havoc. Yes, placements are sharply higher, but this isn't a surprise, as we witnessed historically low placements earlier this spring. However, it wouldn't be surprising to see next week's trade lower in the early part of the week as the COF report has a tendency of carrying into the next upcoming week.
Friday's cash cattle trade wasn't overly busy as the day served as a cleanup opportunity for both packers and feedlots. Following Thursday's robust cash cattle trade, Friday's trade followed suit, selling for $105 in the Southern Plains and for $165 mostly in the Northern Plains. Friday's slaughter is estimated at 112,000 head, 1,000 head more than a week ago and 2,000 head less than a year ago. Saturday's slaughter is projected to be around 57,000 head.
Boxed beef prices closed mixed: choice up $1.86 ($219.34) and select down $0.76 ($206.98) with a movement of 138 loads (83.11 loads of choice, 27.84 loads of select, 12.30 loads of trim and 14.60 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Next week's cash cattle trade is going to be a tough sell for feedlots. Again, feedlots will be hopeful for steady trade, but as packers bought a sizeable volume of cattle this week, packers' desire to pay higher prices for cattle could be even less.
FEEDER CATTLE:
As Friday's afternoon progressed, the feeder cattle complex dove lower, closing anywhere from $0.97 to $2.20 lower. October feeders closed $1.95 lower at $140.32, November feeders closed $2.20 lower at $140.15 and January feeders closed $2.07 lower at $138.82. Worried about how Friday's COF report was going to sit with the market, and seeing weakness continuing to develop in the live cattle sector, bearish indicators pushed the feeder cattle complex lower. South Dakota's Weekly Cattle Auction Summary shared that, compared to a week ago, feeder steers under 850 pounds sold $2.00 to $5.00 higher, while steers over 850 pounds sold steady to $2.00 higher. Feeder heifers weighing under 850 pounds sold steady to $2.00 higher and heifers over 850 pounds sold unevenly steady. Demand remains very good for yearling steers and heifers as corn harvest has begun and cattle feeders are fully ready to take on incoming cattle. The yearlings are moving off grass and there is great competition for these cattle as their availability is becoming sparse. Spring born calves are starting to show up and farmer feeders are seeming interested in taking healthy calves home and feeding them out. The CME feeder cattle index for Sept. 24: down $0.36, $142.23.
LEAN HOGS:
As the cattle complex's support quivered in fear of the afternoon's COF report, the lean hog market jumped higher and took significant leaps in the nearby contracts. October lean hogs closed $2.27 higher at $71.75, December lean hogs closed $1.15 higher at $64.42 and February lean hogs closed $0.97 higher at $69.47. Following Thursday's hogs and pigs and export reports, the market seems unphased and willing to trade higher as both the cash market and futures market jumped higher before the weekend's close. Pork cutouts totaled 378.38 loads with 342.50 loads of pork cuts and 35.88 loads of trim. Pork cutout values: down $0.71, $91.32. Friday's slaughter is estimated at 478,000 head, 19,000 head more than a week ago and 4,000 head less than a year ago. Saturday's slaughter is projected to be around 230,000 head. The CME lean hog index for Sept. 23: up $0.81, $73.70.
MONDAY'S CASH HOG CALL: Steady to somewhat higher. The support for the lean hog market continues to grow and packers are obviously willing to pay higher prices to secure the fact that they'll be able to have more hogs when they need them.
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