GENERAL COMMENTS:
The attention Thursday morning has moved to cattle trade with live cattle and feeder cattle futures both posting triple-digit losses in all feeder cattle contracts and live cattle contracts through October 2024. Overall lack of activity so far in cash cattle markets, combined with uncertainty in the cattle on feed report Friday, may add to the market volatility over the next couple of days. Lean hog futures remain generally quiet Thursday, creating some nearby market pressure, but unable to significantly move market direction at this point. Outside commodity markets remain generally lackluster following mixed moves in grain trade while the stock market has bounced higher following a sluggish start and energy markets are also showing limited market activity. December corn is up 1 at $4.93 and December soybean meal is up $3.90 at $417.7. The Dow Jones Industrial Average is up 126.73 at 33,791.81.
LIVE CATTLE:
Live cattle futures have turned lower Thursday morning as concerns that follow-through pressure may continue to develop through the end of the week and into early next week in the event of a bearish cattle on feed report. With all nearby contracts holding triple-digit losses, prices are testing short term October lows set last week. Even though prices on a daily chart remain near short-term support levels, it is important to remember that the long-term live cattle market chart remains bullish with prices within $3 per cwt of contract highs on the weekly charts. The next two days may add some additional volatility to the market with traders mainly focusing on the analyst uncertainty when it comes to placement numbers for the month of September. Cash cattle trade remains quiet at this point, although asking prices are readily available at $185 and higher in the South and $295 and higher in the North. A few bids have been seen Thursday morning at $187 live and $292 dressed, but so far there seems to be limited interest. Given the cattle on feed report Friday afternoon, it would not be shocking if the majority of trade is delayed until after the report release. October live cattle are $1.45 lower at $184.275, December live cattle are $2.13 lower at $185.075, February live cattle are $2.35 lower at $188.725.
Boxed beef prices are Lower: choice down $2.03 ($301.83) and select down $1.40 ($276.95) with a movement of 86.00 loads (45.74 loads of choice, 24.19 loads of select, 4.43 loads of trim and 11.74 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are leading the cattle complex lower Thursday morning with active pressure seen across the entire market. Losses of $3 to $4 per cwt are seen in nearby contracts with there being very little to no interest willing to step in front of this falling market during light morning trade. Although long-term fundamentals of the market are not yet changing, and the fact is that lower cow herds will keep overall cattle supplies tight, the uncertainty surrounding Friday's cattle on feed placement number is causing havoc through the cattle market in front of the report. The average estimate is for cattle placements in September to be 101% of year ago levels, but the focus is on the wide variance of estimates, which ranged from 95% to 105%. The main question right now is just how fast have feeder cattle left cow herds and entered the feedlot system, which could heavily impact overall futures and cash prices in the coming weeks. October feeders are $3.08 lower at $244.05, November feeders are $4.00 lower at $245.725 and January feeders are $4.15 lower at $246.75.
LEAN HOGS:
Compared to the cattle market, which is posting aggressive triple-digit losses, the hog market remains stable Thursday morning. December lean hogs are $0.45 lower at $67.575, February lean hogs are $0.13 lower at $72.175 and April lean hogs are $0.05 higher at $78.975. Lean hog futures remain lightly traded in a narrowly mixed price range at midday. December lean hog futures are leading the complex lower with a 45-cent loss due to spill over pressure from the cattle complex. But the remainer of the complex remains narrowly mixed from 15 cents lower to 22 cents higher. Despite the concerns seen over the last few days of prices at or near contract lows, there is very little incentive for traders to step into either side of the complex at this point, while they sit on the sidelines and watch the fireworks of the cattle market.
Hog Prices are lower on the Daily Direct Morning Hog report, down $0.46 with a weighted average of $73.67, ranging from $68.00 to 76.00 on 3,675 head with a five-day rolling average of $73.80. Pork Cutouts totaled 167.66 loads with 146.55 loads of pork cuts and 21.11 loads of trim. Pork cutout values are down $1.03 at $87.11.
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