Thursday, September 17, 2020

Thursday Closing Livestock Market Summary - Lean Hogs Keep Pushing Higher

 GENERAL COMMENTS:

Thursday's trade wasn't spontaneous and allowed the livestock complex to open and close in mostly the same mindset -- cattle contracts closed lower and the lean hog complex kept with its vigor. Hog prices closed sharply higher, up $1.60 on the National Direct Afternoon Hog Report, with a weighted average of $62.50 on 10,317 head. December corn is up 3 1/2 cents per bushel and December soybean meal is up $9.60. The Dow Jones Industrial Average is down 130.40 points and NASDAQ is down 140.19 points.

LIVE CATTLE:

Live cattle contracts closed mostly lower, lacking support technically and feeling pressured from weakening boxed beef prices. October live cattle closed $0.05 higher at $106.77, December live cattle closed $0.62 lower at $111.32 and February live cattle closed $0.50 lower at $115.75. The North finally traded some cattle, accepting dressed money at $163 ($2.00 higher than last week's trade), and live cattle in Nebraska and Colorado sold for $103.50 (up $2.50 from last week). This week's movement of negotiated cattle has been light, and with feedlots current and packers not knocking on doors for cattle, it may end simply a lighter traded week. Thursday's slaughter is estimated at 119,000 head, steady with a week ago and 4,000 head more than a year ago. Choice cuts in particular have been moving vigorously this week and Thursday's boxed beef movement was notably higher at 217 loads, indicating that packers are still wanting to clear out space.

Thursday's actual slaughter data shared that for the week ending 9/5/2020 (the Friday before Labor-Day) slaughter totaled 635,387 head, which was down 2.81% from the previous week. Live weights averaged 1,375 pounds (up one pound) and dressed weights averaged 841 pounds which were steady with the previous week.

Boxed beef prices closed lower: choice down $0.33 ($215.05) and select down $1.12 ($203.39) with a movement of 217 loads (144.35 loads of choice, 30.98 loads of select, 7.33 loads of trim and 34.42 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Given that there's now been trade in both the North and the South, prices will most likely follow suit and clean up the week come Friday.

FEEDER CATTLE:

The weakness looming within the cattle complex isn't doing the feeder cattle market any favors and the uptick in corn prices isn't helping either. In the spot December corn contract prices, jumped $0.05 per bushel, and Thursday the board closed another $0.03 higher. Feeder cattle contracts were left with no other option but to scale lower and submit to the growing pressure. September feeders closed $0.57 lower at $139.92, October feeders closed $0.97 lower at $141.45 and November feeders closed $1.32 lower at $142.20. At Winter Livestock Auction in Pratt, Kansas, compared to a week ago, feeder steers weighing over 900 pounds sold $3.00 to $4.00 higher, feeder heifers weighing 600 to 850 pounds sold $2.00 to $4.00 lower and heifers over 850 pounds really dipped lower, selling as much as $6.00 lower. The CME feeder cattle index 9/16/2020: unavailable at this time.

LEAN HOGS:

Higher exports, a large volume of cash hogs traded again Thursday afternoon and a near $4.00 gain on the cutout value led to a stronger close in the lean hog sector. Nearby contracts rallied anywhere from $0.45 to $1.65 higher, while deferred contracts lost $0.20 to $0.37. But with the market's focus on short-term demand, nearby contracts drew in trader's support. October lean hogs closed $1.30 higher at $66.52, December lean hogs closed $1.65 higher at $63.62 and February lean hogs closed $0.45 higher at $68.20. Pork cutouts totaled 279.99 loads with 257.29 loads of pork cuts and 22.70 loads of trim. Pork cutout values: up $3.89, $87.03. Thursday's slaughter is estimated at 484,000 head, down 1,000 head from last week and a year ago. The CME lean hog index 9/15/2020: up $1.07, $66.42.

Thursday's actual slaughter data shared that, for the week ending 9/5/2020 (the Friday before Labor-Day), slaughter totaled 2,466,491 head, which was down 7.01% from the previous week. Live weights were up one pound from the previous week at an average of 282 pounds, and dressed weights remained unchanged at 210 pounds.

FRIDAY'S CASH HOG CALL: Steady to somewhat higher. Packers have been avid about their pork buying this week and their willingness to move the market higher, but wrapping up this week and thinking about next already, their buying may slow down as the week's end nears.




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