GENERAL COMMENTS:
Moderate to strong buyer support early Thursday morning created hope and higher expectations through the entire livestock complex. But prices slowly and steadily eroded through the session with lean hog futures posting the most significant losses, falling nearly $2 per cwt in spot month contracts. Nearby live cattle futures etched out higher prices at closing bell, but even these price levels were nearly half of the morning gains. The underlying concern of overall economic pressure and bearish undertone in cattle trade limited commercial and noncommercial interest late Thursday. Hog prices moved lower on the National Direct Afternoon Hog Report in light trade, falling $3.29 with a weighted average of $86.42 on 5,425 head. December corn is down 1/4 cent per bushel and December soybean meal is up $0.10 per ton. The Dow Jones Industrial Average is down 110 points and NASDAQ is down 2 points.
LIVE CATTLE:
Strong morning gains in nearby live cattle futures helped spark optimism through the e livestock complex Thursday morning. However, late day pressure once again developed in the last two hours of trade, eroding price support as buy order ran out, pulling prices away from morning gains. October through February live cattle futures were able to close higher, but the intraday losses were evident. This continues to focus on the underlying bearish tone that has swept through the cattle complex over the last three weeks. There continues to be growing uncertainty about the ability to rekindle commercial or noncommercial buyer support over the near future, especially if beef values continue to slide lower during the month of September. October live cattle closed $0.65 higher at $123.75, December live cattle closed $0.15 higher at $128.80, and February live cattle closed $0.02 higher at $132.90. Cash cattle markets posted light, scattered trade in several areas Thursday with prices generally steady to weak with midweek sales. This would place most trade steady to $1 per cwt higher from last week's levels, although it appears that prices seem to be slipping as the week continues. It will be very interesting to see where the weekly weighted average price falls once all sales are reported and tallied. The limited amount of trade late Thursday seems to be causing some uncertainty if current trade is within recent market trends. Nebraska has reported live basis sales at $124 to $125 per cwt, while very limited numbers of dressed trade is reported at $198. It is too early to tell if the scattered light trade will make a dent in the overall weekly average given northern trade of $203 per cwt developed Wednesday. The bulk of trade appears to be in the books, which may lead to some additional clean up activity and even more price volatility based on limited numbers through the end of the week.
Thursday's slaughter is estimated at 120,000 head, 1,000 more than a week ago and 1,000 less than a year ago. Week to date slaughter is estimated at 365,000 head, 1,000 below year ago holiday schedules, but 111,000 below week-ago totals. Lower weekly slaughter levels are expected through the week, although larger Saturday runs will narrow that gap.
Boxed beef prices closed lower: choice down $2.28 ($332.58) and select down $1.72 ($296.45) with a movement of 132 loads (94.79 loads of choice, 22.25 loads of select, no loads of trim and 14.97 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Following trade Wednesday and Thursday, the bulk of cash cattle activity is expected to be done. It is very possible that some clean-up activity will develop Friday, but the tone of the market is likely to have been set.
FEEDER CATTLE:
Limited moves in feeder cattle futures were seen following the closing bell with remaining 2021 contracts slipping 2 to 30 cents per cwt. The ability for nearby live cattle futures to hold early gains helped limit overall selling pressure in most feeder cattle trade. The most significant concern in the feeder cattle market was seen in spring 2022 contracts. The overall pressure across the complex continues to back away from summer gains although traders are still expecting reduced overall cattle numbers through most of next year. September feeders closed $0.30 lower at $155.75, October feeders closed $0.02 lower at $159.25 and November feeders closed $0.20 lower at $161.22. The CME Feeder Cattle Index for Sept. 8: $156.83, down $0.64.
LEAN HOGS:
Lean hog futures were most susceptible to outside market pressure Thursday as early market support was offset by triple-digit losses. October contracts posted aggressive $1.90 per cwt losses, falling to $85.47 per cwt. Strong market pressure held in all nearby and most deferred contract months at the closing bell. Although lean hog futures have not broken out of the wide sideways market trend at this point, the outside market softness seen in stock prices quickly added concern that further losses may continue in nearby and deferred hog trade. The Dow Jones Industrials started strong but posted nearly a 300-point pullback through the end of the day. Even though there remains firm demand support for pork, the market will continue to be heavily influenced by overall economic factors over the coming months. October lean hogs closed $1.90 lower at $85.47, December lean hogs closed $1.07 lower at $79.47, and February lean hog futures closed $0.87 lower at $82.27. Pork prices quickly regressed following double-digit losses in ham cuts as markets took back a portion of midweek gains. Pork cutouts totaled 370.20 loads with 344.53 loads of pork cutouts and 25.67 loads of trim. Pork cutout values: down $1.70, $108.70. Thursday's slaughter is estimated at 478,000 head -- steady with a week ago and down 8,000 from a year ago. Week to date slaughter is listed at 1.42 million head. A strong Saturday kill is expected to help make up for the losses of plants remaining dark Monday due to the holiday. The CME Lean Hog Index for Sept. 8: down $0.78, $97.96.
FRIDAY'S CASH HOG CALL: Steady. The daily back and forth cash market swings in negotiated hog trade is limiting overall market direction. Pressure in Thursday's trade would point to firmness at the end of the week, if the current daily trend continues.
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