GENERAL COMMENTS:
Friday felt like a kick in the teeth for the livestock complex as the market was sent plunging lower thanks to the weakened economy. Heading into next week, traders will look for fundamental support but will likely remain skeptical as they monitor economic conditions. December corn is down 4 1/2 cents per bushel and December soybean meal is down $2.10. The Dow Jones Industrial Average is down 320.17 points.
The weekly export report shared that beef net sales of 16,500 metric tons (mt) for 2024 were down 4% from the previous week and 7% from the prior 4-week average. The three largest buyers were Japan (7,700 mt), Taiwan (2,100 mt) and South Korea (1,600 mt). Pork net sales of 20,800 mt for 2024 were down 51% from the previous week and 29% from the prior 4-week average. The three largest buyers were Mexico (10,000 mt), Colombia (1,900 mt) and Japan (1,600 mt).
From Friday to Friday, livestock futures scored the following changes: October live cattle down $3.42, December live cattle down $2.85; September feeder cattle down $6.17, October feeder cattle down $6.80; October lean hogs down $2.72, December lean hogs down $1.55; September corn up $0.06, December corn up $0.05.
LIVE CATTLE:
The only good thing that surfaced throughout Friday's trade was the market's closing bell as that meant the complex was done eroding for the day. It was brutal to watch the complex sink lower throughout the day as traders reacted to the Dow's deterioration amid greater economic concerns. The spot October contract didn't break through its support plane, but the market is trading on the bottom end of its current sideways range. October live cattle closed $2.07 lower at $175.17, December live cattle closed $2.02 lower at $174.70 and February live cattle closed $1.92 lower at $175.40. Throughout the week, Southern live cattle traded at mostly $181, which is $2.00 lower than last week's weighted average, and Northern dressed sales were marked at mostly $288, which is $2.00 lower than last week's weighted average. The other kicker about a lot of the dressed sales is they were committed for delivery for the weeks of Sept. 16 and Sept. 30 -- meaning packers are diligently loading their deferred delivery option to try to avoid being short bought in the weeks ahead.
Friday's slaughter is estimated at 123,000 head -- 3,000 head more than a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be around 43,000 head. The week's total slaughter is estimated at 542,000 head -- incomparable to last week, but 16,000 head less than a year ago.
Boxed beef prices closed lower: choice down $2.10 ($309.41) and select down $0.66 ($296.12) with a movement of 135 loads (94.55 loads of choice, 16.45 loads of select, 3.74 loads of trim and 19.99 loads of ground beef).
MONDAY'S CATTLE CALL: Lower. With packers buying cattle with time and the board being soft, cash prices will likely be lower next week.
FEEDER CATTLE:
It was a brutal day for the feeder cattle complex because the day's pressure never eased ahead of Friday's close. With most of the contracts closing upward of $3.00 lower -- cattlemen seemed to hold their breath as they watched the contracts sink lower and lower through the day. So why you ask? Today's pressure was largely triggered by economic concerns and the commodity markets reacted poorly to the external pressure. And without the support of the live cattle or fed cash cattle markets, feeders stood little to no chance at trading higher. September feeders closed $2.82 lower at $234.30, October feeders closed $3.62 lower at $230.95 and November feeders closed $3.65 lower at $228.02. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week steers traded unevenly steady at $3.00 lower to $4.00 higher. Heifers traded $1.00 to $5.00 higher. Slaughter cows sold $2.00 to $4.00 lower and slaughter bulls sold $3.00 lower. Feeder cattle supply over 600 pounds was 61%. The CME Feeder Cattle Index 9/5/2024: up $0.91, $242.18.
LEAN HOGS:
It's pretty impressive that the lean hog complex was able to keep its deferred contracts higher through the day's technical setback. The nearby contracts felt the pressures of the country's weak economic state, but that didn't seem to affect the deferred contracts as they still closed higher. Heading into next week's market, demand will again be a key factor for traders as they will look to see how consumers are buying and if demand is plentiful, a higher trend could be noted again if support surfaces. October lean hogs closed $1.20 lower at $79.50, December lean hogs closed $0.82 lower at $71.22 and February lean hogs closed $0.35 lower at $74.90. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.05 with a weighted average price of $76.79 on 2,391 head. Pork cutouts totaled 285.66 loads with 249.09 loads of pork cuts and 36.56 loads of trim. Pork cutout values: up $1.23, $96.10. Friday's slaughter is estimated at 482,000 head -- 6,000 head more than a week ago and 5,000 head more than a year ago. Saturday's slaughter is projected to be around 395,000 head. The CME Lean Hog Index 9/4/2024: up $0.16, $86.43.
MONDAY'S HOG CALL: Steady. It's interesting to note Saturday's projected kill of 395,000 head. If packer do indeed process that many hogs, they may have to be more aggressive in the cash market next week.
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