GENERAL COMMENTS:
It was an exhilarating day for the cattle complex as feedlot managers successfully pushed the cash market $2.00 to $4.00 higher. Meanwhile, the lean hog complex wasn't as fruitful as traders withdrew from the market ahead of the Quarterly report. December corn is down 2 cents per bushel and December soybean meal is down $1.40. The Dow Jones Industrial Average is up 260.36 points.
Thursday's export report stated that beef net sales of 10,100 mt for 2024 were down 35% from the previous week and 34% from the prior 4-week average. The three largest buyers were China (2,100 mt), Japan (1,700 mt) and Mexico (1,600 mt). Pork net sales of 28,000 mt for 2024 were down 3% from the previous week and 8% from the prior 4-week average. The three largest buyers were Mexico (13,000 mt), Canada (3,300 mt) and China (2,700 mt).
Thursday's Cold Storage Report shared that total red meat supplies in freezers were down 1% from the previous month and down 2% from last year. Total pounds of beef in freezers were down 2% from the previous month and down slightly from last year. Frozen pork supplies were up slightly from the previous month but down 3% from last year. Stocks of pork bellies were down 39% from last month and down 30% from last year.
LIVE CATTLE:
I originally thought that seeing steady cash cattle prices would be a victory for feedlot managers this week as last week they pushed the market $2.00 to $4.00 higher, but low and behold, they did it again! Throughout the day Southern trade was marked at mostly $185 live which is $2.00 higher than last week's weighted average, and Northern dressed sales were noted at mostly $294 which is $4.00 higher than last week's weighted average. The recent advancement in the cash market really
It builds a strong case that packers are somewhat short-bought and even though the Cattle on Feed report claims that we have more cattle on feed than a year ago, packers are paying up and need more cattle. Regardless of the reason, feedlot managers deserve a round of applause in their strategic marketing this week because if they hadn't waited until late in the week and been committed to trying to advance the market, prices wouldn't have traded higher. And thankfully the cash cattle market's higher trend helped encourage traders and consequently led the futures market to a higher close as well. October live cattle closed $1.05 higher at $184.10, December live cattle closed $0.50 higher at $184.82 and February live cattle closed $0.15 higher at $185.65.
Thursday's slaughter is estimated at 124,000 head -- 2,000 head more than a week ago and steady with a year ago.
Boxed beef prices closed lower: choice down $1.80 ($296.37) and select down $0.91 ($282.37) with a movement of 157 loads (67.16 loads of choice, 31.05 loads of select, 23.73 loads of trim and 35.31 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Given that prices have developed in both regions now, the week's trend is likely set.
FEEDER CATTLE:
The feeder cattle complex grinded higher all through Thursday's trade and was elated to see the fed cash cattle market trade $2.00 to $4.00 higher as that was the fundamental boost that traders needed to feel confident about their upward trend. October feeders closed $0.90 higher at $246.92, November feeders closed $0.92 higher at $244.97 and January feeders closed $0.22 higher at $238.75. Given that the market was indeed able to see fed cash cattle prices trade higher this week -- the market should be able to keep this strong tone through Friday's end. At the Winter Livestock Auction in Dodge City, Kansas, compared to last week feeder steers under 500 pounds sold $10.00 higher, while steers weighing 500 to 700 pounds traded $3.00 to $7.00 higher and steers over 750 pounds sold $5.00 to $9.00 stronger. Heifers under 500 pounds sold $4.00 higher, heifers weighing 500 to 700 pounds sold $3.00 to $8.00 higher and heifers over 700 pounds sold $2.00 to $6.00 stronger. Feeder cattle supply over 600 pounds was 76%. The CME feeder cattle index 9/25/2024: down $0.10, $244.20.
LEAN HOGS:
Traders were right to be skeptical about the afternoon's Quarterly Hogs and Pigs report as the marketing data was alarming. The total number of hogs weighing 180 pounds or more totaled 13,014,000 head which is up 5% compared to a year ago, and hogs weighing 120 to 179 pounds totaled 14,997,000 head which is up 3% compared to a year ago. The market closed before the report was unveiled, but it's likely that traders react poorly to the data as front-end supplies are burdensome to the market. October lean hogs closed $0.45 lower at $82.02, December lean hogs closed $0.97 lower at $73.92 and February lean hogs closed $0.80 lower at $77.82. It was supportive, however, to see afternoon pork cutout prices close higher as the only cut that printed a lower end was the butt (down $1.32) but otherwise all the other cuts ended the day higher. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.14 with a weighted average price of $78.18 on 2,820 head. Pork cutouts totaled 294.76 loads with 266.70 loads of pork cuts and 28.05 loads of trim. Pork cutout values: up $0.54, $95.65. Thursday's slaughter is estimated at 486,000 head -- 23,000 head more than a week ago and steady with a year ago. The CME lean hog index 9/24/2024: down $0.16, $84.05.
FRIDAY'S HOG CALL: Lower. Given that packers have been active in the cash market throughout the earlier part of the week, it's likely that they'll show little to no interest in the cash hog market on Friday.
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