Thursday Closing Livestock Market Update - Official Slaughter Data Points to Higher Cattle Carcass Weights

GENERAL COMMENTS:

Thursday treated the livestock complex better than the earlier part of the week did, but still the market is trading in a slow and lackadaisical manner as the markets seem exhausted. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $7.88 with a weighted average of $117.62 on 5,314 head. December corn is down 7 1/4 cents per bushel and December soybean meal is down $15.00. The Dow Jones Industrial Average is up 322.55 points.

LIVE CATTLE:

It was a mixed day for the live cattle complex as the day continued to see hesitant trading by traders in the market's nearby contracts while the deferred months set out to do business and closed higher. October live cattle closed $0.12 lower at $143.65, December live cattle closed $0.10 higher at $149.90 and February live cattle closed at $154.67. The cash cattle market saw a little more business develop but it was mainly in the form of clean-up sales as nothing challenged the prices the market established earlier in the week. Thus far throughout the week, Southern live cattle have traded for mostly $142 which is steady with last week's weighted averages, and Northern dressed cattle have traded for $232 to $233 which is $1.00 to $2.00 lower than Nebraska's weighted average last week. The week's movement is still thin with less than 55,000 head having been traded. Thursday's slaughter is estimated at 124,000 head -- 2,000 head less than a week ago and 11,000 head more than a year ago.

Thursday's export report shared that beef net sales of 17,000 mt for 2022 were primarily for China (7,100 mt), Japan (3,100 mt) and South Korea (3,100 mt).

Thursday's actual slaughter data shared that for the week ending 8/13/2022 steers averaged 901 pounds (up nine pounds from the previous week, and up three pounds from a year ago). For the same week heifers averaged 822 pounds (up eight pounds from a week ago, and up five pounds from a year ago). This carcass data is somewhat bewildering as a hike in carcass weights doesn't seem logical as processing speeds have been running aggressively, temperatures are still too warm for maximum feeding potential and showlists are extremely current.

Boxed beef prices closed mixed: choice up $0.71 ($263.54) and select down $0.08 ($237.54) with a movement of 124 loads (77.74 loads of choice, 19.97 loads of select, 8.28 loads of trim and 17.99 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. It's likely that the bulk of this week's business is done with as packers are showing the market every little attention.

FEEDER CATTLE:

The feeder cattle complex was refreshed to see corn prices trend $0.07 to $0.08 lower into the day's close which consequently allowed for the feeder cattle complex to rally through closing. September feeders closed $1.22 higher at $184.25, October feeders closed $1.07 higher at $185.52 and November feeders closed $1.02 higher at $187.07. With the corn market easing some of the pressure it imploded on the market earlier this week, feeders were again able to advance their position and will likely set out to regain all of what the market lost earlier in the week as feeder cattle demand is still strong. At Winter Livestock Auction in Pratt, Kansas at their midsession point prices for feeder steers weighing 700 to 900 pounds were called $2.00 to $4.00 higher than last week and feeder heifers weighing 600 to 900 pounds sold $3.00 to $6.00 higher. Feeder cattle weighing over 600 pounds made up 91% of the sale. The CME feeder cattle index 8/24/2022: up $0.95, $181.00.

LEAN HOGS:

The lean hog market waltzed through Thursday's market seeming unphased by the market's lousy export report as the complex trotted through the day with fully higher prices. October lean hogs closed $0.72 higher at $91.10, December lean hogs closed $0.45 higher at $82.62 and February lean hogs closed $0.17 higher at $85.92. Pork cutout values closed lower again but the report's lowest performing cut for the day was the loin, which fell $6.67 from Wednesday's end. Belly prices saw a mild $0.98 addition after their nose-dive earlier this week. Slaughter speeds are running aggressively which likely means that pork cutout values could come under pressure again if domestic consumer support doesn't see much improvement. Pork cutouts totaled 254.18 loads with 222.69 loads of pork cuts and 31.50 loads of trim. Pork cutout values: down $0.33, $102.66. Thursday's slaughter is estimated at 476,000 head - 2,000 head more than a week ago and 3,000 head more than a year ago. The CME lean hog index 8/23/2022: down $1.18, $118.00.

Thursday's export report shared that pork net sales of 6,700 mt for 2022 were reported for Canada (2,400 mt), Mexico (2,400 mt) and Japan (900 mt).

­­­­­FRIDAY'S CASH HOG CALL: Lower. With packers seeing little interest in the export market for U.S. pork and teetering demand domestically.

Thursday Midday Livestock Market Summary - Traders Pay the Complex a Little More Attention

GENERAL COMMENTS:

The livestock complex is trending mostly higher into Thursday's afternoon as traders pay the market a little more attention after having given the complex the cold shoulder earlier in the week. Heading into the afternoon, cattlemen and hog producers both will be looking for the market's latest carcass data. December corn is down 2 cents per bushel and December soybean meal is down $10.00. The Dow Jones Industrial Average is up 23.53 points.

LIVE CATTLE:

The live cattle market is trading mixed into Thursday's afternoon as traders are showing the market mild attention. October live cattle are down $0.27 at $143.50, December live cattle are down $0.20 at $149.80 and February live cattle are up $0.02 at $154.65. The cash cattle market hasn't seen any more business develop as packers are paying the cash market little attention this week. So far this week, live deals in Kansas and Texas have been marked at mostly $142, generally steady with last week's weighted averages. Dressed sales in Nebraska and Iowa have been at $232 to $233, about $1 to $2 lower than last week's weighted average basis Nebraska. The market expects to see some more clean up trade develop, but largely this week's cash cattle trade is expected to be thin.

Beef net sales of 17,000 mt for 2022 were primarily for China (7,100 mt), Japan (3,100 mt) and South Korea (3,100 mt).

Boxed beef prices are higher: choice up $1.26 ($264.09) and select up $0.86 ($238.48) with a movement of 47 loads (23.64 loads of choice, 9.67 loads of select, 7.56 loads of trim and 5.71 loads of ground beef).

FEEDER CATTLE:

As the corn market prints a mild $0.02 regression in its nearby contracts, the feeder cattle market is leaning into Thursday's afternoon mildly higher. September feeders are up $0.62 at $183.65, October feeders are up $0.60 at $185.02 and November feeders are up $0.45 at $186.50. Feeder cattle demand throughout the countryside has continued to see extremely strong demand from farmer feeders, but some corporate feedlots have noticeably backed down their buying as they aim to cool this rallying market.

LEAN HOGS:

After two weeks of immense down pressure, the lean hog contracts are finding support in Thursday's market despite seeing a pitiful export report this morning. October lean hogs are up $0.37 at $90.72, December lean hogs are up $0.25 at $82.42 and February lean hogs are up $0.10 at $85.85. It's not surprising to see cash prices lower as packers already bought aggressively two days this week, and the rest of the week will likely see a lower reduced tone in the cash market. Pork cutout values are somewhat higher at midday with a rebounding $15.37 jump from bellied. Watching long-term pork cutout value trends will be important as it will decern what domestic pork demand is.

Pork net sales of 6,700 mt for 2022 were reported for Canada (2,400 mt), Mexico (2,400 mt) and Japan (900 mt).

The projected lean hog index is unavailable at this time. Hog prices are lower on the Daily Direct Morning Hog Report, down $14.95 with a weighted average of $111.19, ranging from $106.00 to $131.00 on 3,469 head and a five-day rolling average of $122.45. Pork cutouts total 123.31 loads with 104.12 loads of pork cuts and 19.20 loads of trim. Pork cutout values: up $2.71, $105.70.

Thursday Morning Livestock Market Update - Hog Support Remains Elusive

GENERAL COMMENTS:

Fear and reality seem to be coming together with cash looking to be steady to lower this week. The rebound of corn prices is putting reactionary pressure on the market. Feedlots that have cattle that need to be moved are anxious to sell as the cost of feeding them is rising. Packers are looking at seasonality and potentially slower demand. Boxed beef was mixed with choice up $0.03 and select down $1.18. Nearby feeder cattle closed slightly higher as demand remains strong due to lower availability. Thursday is the last day to trade the August feeder contract.

Hogs just cannot find support. The December contract closed the chart gap easily Wednesday and then continued to fall. October still needs to accomplish that task and a lower opening could finish the job. The National Direct Afternoon report showed a decline of $1.62. This coupled with a decline of $2.09 in cutouts, does not provide much hope for finding support Thursday. It is likely weekly export sales may be meaningless in the current market. Saturday slaughter is estimated at 37,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle have been able to hold well in the face of rising corn prices. Feedlots are looking ahead to better beef prices.	1)	Cash cattle trading $1.00 lower does not bode well for the market in the near term with Labor Day just around the corner.
2)	Liquidation of the cattle herd continues due to drought conditions in some areas. This will impact supply later.	2)	The uptrend line has been penetrated, opening the possibility of a price correction.
3)	Hog futures are oversold and ripe for a bounce. Heavy selling should be near the end as futures near strong technical support.	3)	Hog weights increased nearly a pound this week. Increasing slaughter will leave plentiful product available to the market.
4)	Closing the chart gap in December hogs and potentially closing the October gap today could generate some buying interest. Futures hold a large discount to cash.	4)	October still needs to close the chart gap below the market. This may be accomplished this week as cash and cutouts remain weak.

Wednesday Closing Livestock Market Update - Nearby Feeder Cattle Contracts Close Higher Amid Elevated Corn Prices

GENERAL COMMENTS:

It was a mostly lower trending day for the livestock complex as both the live cattle and lean hog markets closed fully lower Wednesday, but the feeder cattle market saw its nearby contracts round out the day green. Nevertheless, both the hog and beef markets would be elated to see a strong export report early Thursday morning. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.62 with a weighted average of $125.50 on 20,613 head. December corn is up 2 cents per bushel and December soybean meal is up $2.10. The Dow Jones Industrial Average is up 59.64 points.

LIVE CATTLE:

The live cattle contracts rounded out the day lower as the market saw little support from traders and faced a slightly weaker cash market. October live cattle closed $0.82 lower at $143.77, December live cattle closed $0.67 lower at $150.00 and February live cattle closed $0.32 lower at $154.62. The market has steadily declined since last week's high point, which could be the market's tone until after Labor Day. There were some cattle traded in the North for $233, which is $1.00 softer than last week's weighted average. Southern cattle have traded for $142, which is mostly steady with last week's trend. Wednesday's afternoon reports share that only 33,827 head have sold thus far this week. Thursday's market will look for more clean-up business to develop, but it's likely that this week's volume is thin. 

Wednesday's slaughter is estimated at 124,000 head, 2,000 head less than a week ago but still 10,000 head more than a year ago.

Boxed beef prices closed mixed: choice up $0.03 ($262.83) and select down $1.18 ($237.62) with a movement of 121 loads (61.30 loads of choice, 23.92 loads of select, 20.98 loads of trim and 14.55 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both regions now, it's likely that the week's price trend holds steady.

FEEDER CATTLE:

The feeder cattle complex performed far better than I expected given that Tuesday's corn rally served the complex a mere blood bath, and that, in Wednesday's market, the nearby corn contracts closed steady to $0.05 stronger but even so the nearby feeder cattle contracts saw slightly higher close. September feeders closed $0.57 higher at $183.02, October feeder cattle closed steady at $184.45 and November feeders closed $0.37 lower at $186.05. It's quite impressive that the nearby feeder cattle contracts were able to close slightly higher given the immense pressure that the corn market has added over the last couple of days and with fat cattle trading steady to $1.00 lower. Then again, this week's market is a great reminder that, even though markets can break higher or lower at any given point in time, strong fundamental demand like we are seeing right now in the market is a tough force to run over. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, steer calves weighing under 450 pounds traded $15.00 to $20.00 higher while heavier weight steers traded steady to $4.00 higher. Feeder steers and heifers were not well tested but steady to firm prices were noted. It was noted that buyers outnumbered sellers throughout most of the day and there were buyers in the crowd that hadn't been present in several months. Feeder cattle supply over 600 pounds was 26%. The CME Feeder Cattle Index for Aug. 23: down $0.10, $180.50.

LEAN HOGS:

The lean hog complex trended lower throughout Wednesday's market, which didn't come as a surprise given the tough day that it endured on Tuesday with cutout prices dropping a staggering $12.53. Pork cutout values closed lower again today, but the day's decline came from blended pressure from both bellies and butts; bellies fell $6.15 lower and butts dropped $6.98 lower. Regardless, it's evident that packers are needing to move product as they're increasing chain speeds and cutting product prices. October lean hogs closed $2.52 lower at $90.37, December lean hogs closed $2.05 lower at $82.17 and February lean hogs closed $1.82 lower at $85.75. Pork cutouts totaled 305.50 loads with 262.81 loads of pork cuts, and 42.69 loads of trim. Pork cutout values: down $2.09, $102.99. Wednesday's slaughter is estimated at 480,000 head, 2,000 head more than a week ago and 7,000 head more than a year ago. The CME Lean Hog Index for Aug. 22: down $0.80, $119.18.

­­­­­THURSDAY'S CASH HOG CALL: Lower. Given that packers have bought hogs for two days now likely means that they'll inactive buyers throughout the rest of the week.