GENERAL COMMENTS:
The livestock complex's nearby contracts closed mostly lower Thursday afternoon as traders questioned whether they overdid the market's run on Wednesday and were left unsupported fundamentally as they don't know the direction of the cash market yet, boxed beef prices closed mixed and pork cutout values closed lower. December corn is down 4 1/4 cents per bushel and December soybean meal is down $7.90. The Dow Jones Industrial Average is down 184.93 points.
Beef net sales of 22,500 mt for 2024 were up noticeably from the previous week and up 68% from the prior 4-week average. The three largest buyers were South Korea (7,900 mt), China (6,200 mt) and Mexico (2,800 mt). Pork net sales for 43,400 mt for 2024 were up 55% from the previous week and 61% from the prior 4-week average. The three largest buyers were Mexico (24,000 mt), China (7,900 mt) and Canada (2,900 mt).
LIVE CATTLE:
Over the last two weeks, the live cattle complex sported an aggressive rally, but traders pulled back the reins throughout Thursday's market and began to ask questions. It's yet to be seen whether traders will continue with their upward trend if the cash cattle market trades higher as there's been no cattle traded yet this week. Bids of $294 dressed were offered throughout the day in Nebraska, but feedlot managers weren't willing to accept that offer. At this point, it's anyone's call what the cash cattle market will do as feedlot managers are current enough with inventory to simply roll this week's showlist to next week if prices aren't what they desire. But packers won't be easily pushed around either as they're up against thin margins as it is already. With choice cuts ducking below $300 again, they're going to be extremely cautious about overbuying in the cash market when they can simply cut throughput.
Wednesday's sharp rally in the commodity markets helped push the live cattle complex back to the price point at which it was trading before the equity meltdown in early August. But it's yet to be seen whether traders will view that technical territory as too much of a resistance threshold to take on or whether they'll advance the market again if cash prices prove to be supportive. As always, time will tell.
October live cattle closed $1.42 lower at $186.00, December live cattle closed $1.30 lower at $186.40 and February live cattle closed $0.65 lower at $187.75.
Thursday's slaughter is estimated at 124,000 head -- steady with a week and a year ago.
Boxed beef prices closed lower: choice down $0.01 ($299.80) and select down $0.64 ($283.29) with a movement of 146 loads (89.77 loads of choice, 27.74 loads of select, 11.26 loads of trim and 17.19 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $1.00 higher. Even though packers are operating with thin margins, I believe that feedlot managers will stick to their guns this week and potentially let cattle trade steady/$1.00 higher or keep them and take a chance on next week's market as opposed to letting them sell lower.
FEEDER CATTLE:
The feeder cattle complex was timid throughout the day as it wanted to respect how the live cattle market was trading but was torn between whether or not it should trade higher as demand in the countryside is strong. But by the end of the day the feeder cattle complex closed mixed with the market's nearby contracts closing slightly lower all while the deferred markets kept their higher position. October feeders closed $).75 lower at $248.97, November feeders closed $0.42 lower a $248.12 and January feeders closed $0.47 higher at $242.55. At La Junta Livestock Commission in La Junta, Colorado, compared to last week feeder steers traded $2.00 to $14.00 higher with instances of even higher prices. Feeder heifers under 650 pounds sold $5.00 to $14.00 lower but heifers over 650 pounds sold mostly $4.00 to $14.00 higher. Feeder cattle supply over 600 pounds was 43%. The CME feeder cattle index 10/2/2024: up $0.96, $248.25.
LEAN HOGS:
The lean hog complex closed mixed as the market's nearby contracts closed mildly lower but thankfully the deferred months kept their stronger position. I believe that some of the nearby contract's struggles stem from last week's Quarterly Hogs and Pigs Report as traders know that market-ready supplies of pork are ample, and when they see current cutout values printing lower, they fear what prices could do later this year. October lean hogs closed $0.50 lower at $84.17, December lean hogs closed $0.35 lower at $76.40 and February lean hogs closed steady at $80.15. The belly (down $2.24) and the loin (down $1.82) were the biggest reasons why carcass prices fell lower Thursday afternoon. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.92 with a weighted average price of $73.99 on 990 head. Pork cutouts total 284.08 loads with 254.97 loads of pork cuts and 29.11 loads of trim. Pork cutout values: down $0.22, $94.80. Thursday's slaughter is estimated at 481,000 head -- steady with a week ago and 2,000 head less than a year ago. The CME lean hog index 10/1/2024: up $0.32, $84.45.
FRIDAY'S HOG CALL: Lower. Packers are most likely done buying cash hogs this week.
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