GENERAL COMMENTS:
Even though the lean hog contracts drew back ahead of the day's end, the livestock complex successfully walked away with some wins from Thursday's market. First, both the beef and pork markets were pleased with the day's export report. Second, the live cattle and feeder cattle contracts found technical support. Lastly, the day's Hogs and Pigs report came in supportive. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $4.93 with a weighted average of $88.35 on 5,889 head. December corn is down 1 cent per bushel and December soybean meal is down $5.50. The Dow Jones Industrial Average is down 458.13 points.
LIVE CATTLE:
It was an excellent day for the live cattle complex as the day not only celebrated a strong export report, but some more cash cattle traded as well. Once the market saw the strong interest in beef from the export data, the contracts traded mostly higher from the day's get-go and closed in the same confident manner. The big question moving forward for the live cattle complex will be: Has a new bottom been established? October live cattle closed $1.07 higher at $144.12, December live cattle closed $1.50 higher at $147.77, and February live cattle closed $1.17 higher at $151.35. Throughout the week, Northern dressed sales have had a range of $225.60 to $233, mostly $228, which is $1.00 lower than last week's weighted average. Southern live cattle have been marked at $143, which is fully steady with last week's weighted averages.
Beef net sales of 21,500 mt for 2022 were primarily for South Korea (7,300 mt), China (6,000 mt) and Japan (3,500 mt).
Thursday's slaughter totaled 127,000 head, steady with a week ago and 6,000 head more than a year ago.
Thursday's actual slaughter data shared that, for the week ending Sept. 17, steers averaged 918 pounds, which is 4 pounds heavier than the previous week and 6 pounds heavier than a year ago. For the same week, heifers averaged 832 pounds, which is a pound heavier that the week before and 4 pounds heavier than a year ago.
Boxed beef prices closed mixed: choice down $1.47 ($246.08) and select up $0.57 ($219.78) with a movement of 150 loads (88.05 loads of choice, 30.53 loads of select, 11.00 loads of trim and 20.84 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Given that close to 80,000 head of cattle have traded already this week it's likely that Friday's market only sees some clean up trade which will likely be done at steady money.
FEEDER CATTLE:
With the support that stemmed from live cattle trading slightly higher, and upon seeing the market's stronger export report -- which just helped fuel supportive tones throughout the cattle complex -- feeder cattle finally had a better day and saw the complex closed steadily above $2.00 higher. October feeders closed $2.32 higher at $177.32, November feeders closed $2.55 higher at $177.82 and January feeders closed $2.47 higher at $178.42. Given that both the live cattle and feeder cattle contracts were able to close higher Thursday afternoon, the market now wonders: has the bottom of this move been established? At La Junta Livestock Commission in La Junta, Colorado, compared to last week, full and fleshy steer calves traded $5.00 to $8.00 lower. Heifer claves under 450 pounds traded steady to $2.00 lower, those weighing 450 to 600 pounds traded $8.00 to $10.00 lower, and those heifers weighing 600 to 700 pounds traded $3.00 to $5.00 lower. Yearling steers were only lightly tested but they sold steady to $2.00 higher. Feeder cattle supply over 600 pounds was 28%. The CME Feeder Cattle Index for Sept. 28: down $1.52, $175.94.
LEAN HOGS:
The lean hog complex endured another minor sell-off before Thursday's final bell as the entire complex, besides the October 2022 contract, closed lower. October lean hogs closed $0.07 higher at $89.45, December lean hogs closed $0.10 lower at $75.72 and February lean hogs closed $0.40 lower at $79.07. The market stomached mixed fundamental support Thursday as packers did cut back on production (only processing 476,000 head) and pork cutouts closed almost $2.00 lower (mainly thanks to the $16.38 drop in bellies). However, the market did see support in its export report as 34,300 metric tons were sold, and the day's Quarterly Hogs and Pigs report was rather supportive given that all figures came in 1% to 2% lighter than a year ago. Pork cutouts totaled 342.81 loads with 308.16 loads of pork cuts and 34.65 loads of trim. Pork cutout values: down $1.97, $98.80. Thursday's slaughter totaled 476,000 head, 6,000 head less than a week ago but 3,000 head more than a year ago. The CME Lean Hog Index for Sept. 27: down $0.81, $95.60.
Pork net sales of 34,300 mt for 2022 were primarily for Mexico (23,700 mt), South Korea (2,900 mt) and China (2,000 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that it's Friday and packers have already mostly filled their commitments for the week, it's likely that they won't be very aggressive in Friday's market.
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