GENERAL COMMENTS:
Active gains redeveloped in lean hog futures following widespread outside market support Thursday. December lean hog futures led the entire livestock complex higher, closing $3.12 per cwt higher, moving to the highest price in two weeks. The ability to hold these gains through the end of the week is likely to create additional underlying support and spark renewed interest in commercial and noncommercial buying through the end of September. Cattle futures held moderate gains most of the session, but a late day pullback in feeder cattle seemed to slowly limit optimism in all cattle futures. Traders are eagerly waiting for both the cattle on feed report and hogs and pigs report, which will be released Friday afternoon. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, falling $0.63 with a weighted average of $76.53 on 4,855 head. December corn is up 3 3/4 cents per bushel and December soybean meal is down $1.70 per ton. The Dow Jones Industrial Average is up 506 points and NASDAQ is up 156 points.
LIVE CATTLE:
Live cattle futures trickled higher in most contracts Thursday as early buyer support slowly trickled out of the market as buy orders seemed to dry up as the day continued. Spot October live cattle contracts closed lower, although the rest of the market held light to moderate gains. Traders remain focused on the ability to hold prices above last week's support levels, but limited interest is seen through the complex ahead of the cattle on feed report. Traders may continue to adjust positions Friday morning in front of the afternoon report, but unless report totals come well off estimated levels, market moves may be limited. October live cattle closed $0.05 lower at $123.22, December live cattle closed $0.07 higher at $128.62 and February live cattle closed $0.35 higher at $132.95. Cash cattle trade was quiet Thursday following light to moderate activity which took place through the day Wednesday. It is likely that most needed trade is already in the books, but it would not be surprising if a few additional clean-up deals took place during the day Friday. Cattle traded at $123 to $124 per cwt live basis in the South, and mostly $198 dressed in the North. This is generally steady with last week in the South and $1 per cwt lower in the North. Asking prices on cattle still left on showlists remain at $125 live and $200 dressed.
Thursday's slaughter is estimated at 114,000 head, 6,000 less than a week ago and 8,000 less than year ago totals. Weekly totals are listed at 477,000 head, 2,000 more than a week ago and 6,000 head less than year ago levels.
Boxed beef prices closed lower: choice down $3.54 ($307.83) and select down $2.51 ($275.50) with a movement of 186 loads (102.40 loads of choice, 52.13 loads of select, 3.14 loads of trim and 28.22 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Trade is expected to be essentially finished for the week, but any trade that may trickle into the market Friday will likely be in line with previous price levels. Both sides seem very willing to hold out until next week and after the cattle on feed report before stepping back into the market.
FEEDER CATTLE:
Despite early market support, buyer interest faded in the last couple hours of trade Thursday. This allowed for mixed price levels across the complex, adding concern that gains over the last couple of days may be under pressure. Traders will likely be adjusting positions Friday morning in front of the upcoming cattle on feed report. Although slight reductions are expected, traders are less certain of overall placement totals and how this will be viewed by the market. Cattle placements during the month of August are estimated at 99.5% year ago levels. Analysts ranges for placements remain wide, from 95% to 102.8% of last year, creating less agreement of just where final numbers may land. This could create a major shift in price levels early next week. Feeder cattle sales at the Torrington, Wyoming, sale Thursday posted trade generally $3 to $6 per cwt lower than last week. While sales in Farmington, Missouri, were mixed from $6 lower to $2 higher. September feeders closed $0.10 higher at $154.90, October feeders closed $0.82 lower at $156.85 and November feeders closed $0.12 lower at $158.10. The CME Feeder Cattle Index for Sept. 22: $154.49, up $0.92.
LEAN HOGS:
Lean hog futures rallied higher following additional outside gains in other commodity markets and stock markets. Following active liquidation over the last two weeks, a combination of commercial and noncommercial buyer support flooded the market. December futures led the shift higher, moving to two-week high, and creating the potential for additional longer-term support at the end of the week. Traders are not only focusing on short-term market shifts, but Friday's hogs and pigs report is expected to show a 2% decline in hog numbers as of Sept. 1. This could help regain underlying buyer interest as traders continue to limit hog herd size through the end of the year and early 2022. October lean hogs closed $0.90 higher at $84.75, December lean hogs closed $3.12 higher at $76.50, and February lean hog futures closed $2.95 higher at $79.47. Pork prices shifted lower once again Thursday afternoon following a pullback in ham cuts. Pork cutouts totaled 280.20 loads with 240.47 loads of pork cutouts and 39.73 loads of trim. Pork cutout values: down $2.63, $104.29. Thursday's slaughter is estimated at 475,000 head, 13,000 more than a week ago and up 5,000 from a year ago. Week to date totals at 1.87 million head, down 13,000 head from week ago levels. The CME Lean Hog Index for Sept. 22: down $0.76, $91.89.
FRIDAY'S CASH HOG CALL: Steady to $1 lower. Despite aggressive gains in futures trade, lack of uniformity in cash markets is likely to keep prices steady to weak through the end of the week.
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