GENERAL COMMENTS:
The lean hog complex saw support through Thursday's end, but cattle complex closed mixed with hesitancy still being the underlying tone of the cattle market. Some light cash cattle trade developed throughout the day, but more will likely develop through Friday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.48 with a weighted average price of $70.29 on 1,053 head. December corn is up 11 1/2 cents per bushel and December soybean meal is up $5.20. The Dow Jones Industrial Average is down 9.98 points.
LIVE CATTLE:
It was a mixed day for the live cattle complex as the market did see a little more cash cattle trade develop, but largely it was steady with the week's earlier sales and the futures complex closed on both sides of steady with the nearby contracts ending the day lower while the deferred contracts were able to keep their mild gains. The spot December contract continues to trade below its 40-day moving average but thankfully, unlike the November feeder cattle contract, the market is above it's 100-day moving average. The sluggishness of beef demand mixed with the futures market's recent volatility has really sucked the wind right out of the live cattle market's sail. Unfortunately, the tensions politically and economically aren't likely to ease any time soon, so cattle enthusiasts are praying that beef demand begins to perk up and that the cash cattle market sees more packer demand sooner rather than later. October live cattle closed $0.25 lower at $181.95, December live cattle closed $0.65 lower at $185.37 and February live cattle closed $0.77 lower at $189.60. A thin movement of cattle has taken place over the last two days with Northern sales being marked at $288 to $291 but mostly at $290 to $291, which is steady to $1.00 hither than last week's weighted average. Southern live cattle have traded at mostly $182 to $183, which is steady to $1.00 lower than last week's weighted average. More trade will likely develop ahead of the week's end, but prices will likely remain steady at this point. Asking prices for cattle left on showlists are around $184 in the South and $292 in the North.
Thursday's slaughter is estimated at 124,000 head, steady with a week ago but 4,000 head less than a year ago.
Thursday's actual slaughter data shared that for the week ending Sept. 23 steers averaged 918 pounds, which is 1 pound less than a week ago but still 3 pounds more than a year ago. During the same week heifers averaged 832 pounds, which is 11 pounds more than the previous week but 4 pounds less than a year ago.
Beef net sales of 13,300 for 2023 were down 25% from the previous week but up 7% from the prior four-week average. The three primary buyers were South Korea (4,300 mt), Japan (3,700 mt) and China (1,600 mt).
Boxed beef prices closed mixed: choice up $1.00 ($297.76) and select down $0.10 ($274.77) with a movement of 160 loads (79.81 loads of choice, 31.91 loads of select, 8.77 loads of trim and 39.04 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Given that trade has developed in both regions, prices will likely remain steady at this point.
FEEDER CATTLE:
It was another day of grim luck for the feeder cattle complex as the market closed lower pressured by the corn market's $0.11 gain and from the lack of support from the live cattle contracts. There's an old cattle saying that goes, "feeders are the leaders," and with the spot November contract hovering at its 100-day moving average point, that's an unnerving thought to consider. October feeders closed $0.27 lower at $247.50, November feeders closed $0.12 lower at $250.30 and January feeders closed $1.00 lower at $253.05. Throughout most of the week, sales have been softer in the countryside, which makes sense given the political and economic pressures that have exasperated the market's downturn, but once farmers get done harvesting one would think that sales would see better support again. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, feeder steers and heifers both sold with a weaker undertone, and specifically heifers weighing 900 to 950 pounds sold $2.00 lower. The auction report noted quality and flesh to be the driving factor as to why prices were lower. Feeder cattle supply over 600 pounds was 93%. The CME Feeder Cattle Index for Oct. 4: not available at this time.
LEAN HOGS:
The lean hog complex had a positive day with the futures contracts able to close higher and pork cutout values seeing better support as well. The real question that the market is going to be poised with over the course of the next week or so is: has a new bottom been established for the market's current more or does more downside risk exist? Traders seem willing to support the contracts technically at this point, but they'll need some fundamental reassurance if they're going to continue to do so. Monitoring pork demand will be vital in looking for market ques in the immediate future. October lean hogs closed $0.97 higher at $80.90, December lean hogs closed $3.10 higher at $72.27 and February lean hogs closed $2.85 higher at $75.95. Pork cutouts totaled 278.23 loads with 235.39 loads of pork cuts and 42.84 loads of trim. Pork cutout values: up $0.34, $94.98. Thursday's slaughter is estimated at 481,000 head, steady with a week ago and 9,000 head less than year ago. The CME Lean Hog Index for Oct. 3: down $0.27, $84.28.
Pork net sales of 43,000 mt for 2023 were up 57% from the previous week and 61% from the prior four-week average. The three primary buyers were Mexico (14,600 mt), China (9,400 mt) and South Korea (4,400 mt).
FRIDAY'S HOG CALL: Lower. Packers showed Thursday's cash market virtually no interest and it's likely that Friday's market is handled the same way.
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