GENERAL COMMENTS:
The livestock complex was well supported through the week's end, as all three markets rounded out the week mostly higher. Some cash cattle trade was reported shortly after the noon hour Friday, and the feedlots that elected to wait until late in the week to sell were rewarded with better prices than those who sold early. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.03 with a weighted average price of $84.62 on 2,129 head. December corn is down 1/4 cent per bushel and December soybean meal is up $2.70. The Dow Jones Industrial Average is up 247.54 points.
From Friday to Friday, livestock futures scored the following changes: august live cattle up $2.15, October live cattle up $2.35; August feeder cattle up $2.05, September feeder cattle up $2.68; October lean hogs down $2.30, December lean hogs down $2.47; September corn down $0.09, December corn down $0.05.
LIVE CATTLE:
Traders weren't sleeping on the job when it came to Friday's market as the live cattle contracts closed higher and again reassured the marketplace that even traders are aware of the complex's long-term supportive outlook. The fact that traders tested current support planes midweek and elected to push prices higher even though cash cattle traded $1.00 to $3.00 lower is extremely supportive. October live cattle closed $0.45 higher a $181.17, December live cattle closed $0.60 higher at $185.12 and February live cattle closed $0.60 higher at $189.20. A light trade has been reported in the South at mostly $179, which is generally steady with last week's weighted average. A few more Northern cattle have traded at $185, which is $1.00 lower than last week's weighted average. The cattle that sold on Thursday in the North traded at mostly $292 which is $3.00 lower than last week's weighted average.
Friday's slaughter is estimated at 122,000 head, 4,000 head more than a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be around 16,000 head. The week's estimated slaughter amounts to 626,000 head, 10,000 head more than a week ago and 52,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.27 ($317.90) and select up $0.76 ($292.67) with a movement of 79 loads (61.07 loads of choice, 10.59 loads of select, zero loads of trim and 7.66 loads of ground beef). Throughout the week, choice cuts averaged $317.04 (up $6.63 from last week's weighted average) and select cuts averaged $290.60 (up $6.03 from last week's weighted average) with a total movement of cuts, grinds and trim of 451 loads.
MONDAY'S CATTLE CALL: Steady. Packers are going to continue to try to work the market lower, but as we were again shown this past week, feedlots aren't going to hand them over cattle unless they pay close to what their asking prices are.
FEEDER CATTLE:
The feeder cattle complex had another stellar day as the market continues to thrive on the strength seeping over from the live cattle complex, and from the fact that corn prices are remaining stable and that buyer demand in the countryside is holding strong, even if higher temperatures were seen in most of the country this past week. September feeders closed $0.45 higher at $251.20, October feeders closed $0.72 higher at $253.97 and November feeders closed $1.05 higher at $255.40. So long as the live cattle market keeps its momentum, the feeder cattle complex should be able to maintain its strong position as feeder cattle supplies are only going to grow thinner as the year goes on. The Oklahoma Weekly Cattle Auction Summary shared that, throughout the entire state and when compared to a week ago, feeder steers traded steady to $3.00 lower and feeder heifers traded $2.00 to $3.00 lower. Steer calves sold $2.00 to $4.00 lower and heifer calves traded $8.00 to $10.00 lower, expect those weighing 500 to 600 pounds which sold steady. High temperatures were largely to blame for this week's softness as much of the state had temperatures topping over 100 degrees. Slaughter cows and bulls sold steady to $1.00 lower. Feeder cattle supply over 600 pounds was 59%. The CME Feeder Cattle Index for Aug. 25: up $0.45, $245.59.
LEAN HOGS:
All in all, the lean hog complex had another strong performing day throughout the futures complex, even though the spot October contract closed lower. I think the biggest reason why the October contract came under pressure ahead of closing was because traders aren't seeing the fundamental support necessary to break beyond current resistance levels. And, Friday's afternoon pork cutout report is just another example of the volatility that's currently laced throughout the hog and pork markets as the carcass value fell $11.50 lower because of the $58.48 drop in the belly. October lean hogs closed $0.65 lower at $79.82, December lean hogs closed $0.12 higher at $72.02 and February lean hogs closed $0.42 higher at $76.37. Pork cutouts total 317.82 loads with 277.73 loads of pork cuts and 40.09 loads of trim. Pork cutout values: down $11.50, $93.42. Friday's slaughter is estimated at 468,000 head, 1,000 head less than a week ago and 21,000 head more than a year ago. Saturday's slaughter is projected to be around 156,000 head. Thursday's slaughter was revised to 465,000 head. The CME Lean Hog Index for Aug. 23: down $0.97, $96.40.
MONDAY'S HOG CALL: Lower. Packers never really show much interest in the cash hog market on Monday, and with the sharp decline in cutout values, they'll likely remain cautious buyers early in the week.
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