Thursday Closing Livestock Market Update - Feeders Close Higher While Corn Prints Red

GENERAL COMMENTS:

It was a mixed day for the livestock complex as feeder cattle were the only livestock market able to close higher in the futures complex. The lean hog market continues to face a lack of interest from packers and the live cattle market saw hit-and-miss support. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.91 with a weighted average of $94.98 on 6,503 head. December corn is down 2 1/2 cents per bushel and December soybean meal is down $5.60. The Dow Jones Industrial Average is up 193.24 points.

LIVE CATTLE:

It was a mixed day for the live cattle complex as cash cattle sold steady to $2.50 lower, the futures market traded mixed, boxed beef prices dipped lower for the day, but Thursday's actual slaughter data had impressive news to share. Nevertheless, the cattle market is trudging through the beginning of September knowing that the sooner the month can come to an end, the market will be that much closer to thinner market-ready fed cattle supplies and likely better beef demand. October live cattle closed $0.12 higher at $144.37, December live cattle closed $0.42 lower at $149.65 and February live cattle closed $0.22 lower at $154.27. A light movement of cattle traded in the North with dressed cattle selling for mostly $226 which is $2.50 lower than last week. Southern live cattle traded for mostly $141 which is about steady with last week's market. Thursday's slaughter is estimated at 127,000 head, 2,000 head more than a week ago and 6,000 head more than a year ago.

Thursday's actual slaughter data shared that, for the week ending Aug. 27, the market processed 677,878 head of cattle, which is the largest slaughter thus far for 2022. For the week steers averaged 904 pounds, which was steady with the week before but was 3 pounds heavier than a year ago, and heifers averaged 821 pounds, which was 1 pound lighter than the previous week but was steady with a year ago.

Boxed beef prices closed lower: choice down $3.33 ($258.01) and select down $1.47 ($236.04) with a movement of 189 loads (133.20 loads of choice, 31.86 loads of select, 8.39 loads of trim and 15.30 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Given that cattle have already traded in both regions, it's likely that prices hold steady through the week's end.

FEEDER CATTLE:

After closing lower Wednesday afternoon, the feeder cattle market was able to rebound slightly throughout Thursday's market as the corn complex closed $0.02 lower and no immediate technical pressures overpowered the market. September feeders closed $0.30 higher at $182.32, October feeders closed $0.45 at $184.40 and November feeders closed $0.30 higher at $185.75. Sales are beginning to see more spring born calves at their auctions as some producers are already shipping calves for the fall run. Auction receipts will likely only continue to get bigger until the fall run is over with, and if the corn complex can trade steady to somewhat lower and cash cattle begin to trade higher again, then upside potential in the feeder cattle marekt is ripe. At Torrington Livestock Feeder Cattle Auction in Torrington, Wyoming, compared to past week, feeder steers and heifers traded $3.00 to $7.00 stronger. The market was active with many lots of reputation cattle selling. No trend of calves right off the cow was noted but there was high demand for calves with both spring and fall shots. Feeder cattle supply over 600 pounds was 71%. The CME Feeder Cattle Index for Sept. 7: up $1.17, $180.31.

LEAN HOGS:

The lean hog complex is continuing to chop sideways as the market desperately longs for support. With packers having thin margins to work with, their interest in the cash hog market has been limited and will likely continue to be limited until their have more funds to operate with. Demand will continue to be one of the biggest driving factors of the lean hog market as both packers and producers need and want to see robust demand from our domestic consumers. October lean hogs closed $1.05 higher at $92.12, December lean hogs closed $0.92 lower at $82.67 and February lean hogs closed $0.62 lower at $86.80. Pork cutouts totaled 284.70 loads with 252.22 loads of pork cuts and 32.48 loads of trim. Pork cutout values: down $0.71, $102.44. Thursday's slaughter is estimated at 478,000 head, 2,000 head less than a week ago and 3,000 head less than a year ago. The CME Lean Hog Index for Sept. 6: down $1.78, $101.48.

­­­­­FRIDAY'S CASH HOG CALL: Lower. Given that packers have shown the market little to no interest throughout the week, it's very unlikely that they change their tone come Friday.

Thursday Midday Livestock Market Summary - Weaker Tones Spread Across Live Cattle, Lean Hog Contracts

GENERAL COMMENTS:

The livestock complex is seeing a lower tone spread across both the live cattle and lean hog contracts, while the feeder cattle market takes advantage of cheaper corn. The cash cattle market has seen a thin volume traded in Nebraska, but otherwise the market is still largely untested and undeveloped. December corn is down 5 3/4 cents per bushel and December soybean meal is down $3.90. The Dow Jones Industrial Average is down 138.57 points.

LIVE CATTLE:

Live cattle futures are trending slightly lower into Thursday afternoon as the market is beginning to see cash cattle trade develop in the North for $1.00 to $2.00 lower than last week. The South has yet to sell any cattle and it seems as though Southern feedlots are dead set on getting their early asking prices of $143 to $144. Packers know in the weeks ahead they won't be able to control the market as much as beef demand through September is usually slow and they're still able to play off the shortened week thanks to Labor Day. But as the market gets closer to October and market-ready supplies run even thinner, feedlots will then sit in the driver's seat of the cash cattle market and prices are expected to get substantially higher. October live cattle are down $0.15 at $144.07, December live cattle are down $0.32 at $149.75, and February live cattle are down $0.40 at $154.10.

Boxed beef prices are lower: choice down $2.29 ($259.05) and select down $0.72 ($236.79) with a movement of 96 loads (66.52 loads of choice, 15.83 loads of select, 6.89 loads of trim and 6.30 loads of ground beef).

FEEDER CATTLE:

As the corn market trends 5 to 7 cents lower in its nearby contracts, the feeder cattle futures are rallying modestly after Wednesday's weak performance. September feeders are up $0.15 at $182.17, October feeders are up $0.40 at $184.35 and November feeders are up $0.42 at $185.87. Even with cash cattle trade developing in the North for $1.00 to $2.00 lower than last week's business, the feeder cattle market should be able to keep its upward ascent as feedlots knew their chances of getting more money this week in the cash market was slim.

LEAN HOGS:

After the sharp descent the market endured two weeks ago, the lean hog complex is now trading in a choppy, sideways pattern as it looks for any little crumb of support. October lean hogs are down $0.02 at $91.05, December lean hogs are down $0.57 at $83.02, and February lean hogs are down $0.35 at $87.07. With both cash prices and pork cutout values cheaper Thursday morning, it isn't shocking to see the contracts falling lower and it's likely that this doggish, uneventful demeanor sticks with the market through the week and until packers see more margin.

The projected CME Lean Hog Index for 9/7/2022 is down $1.22 at $100.26, and the actual index for 9/6/2022 is down $1.78 at $101.48. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.29 with a weighted average of $94.18, ranging from $88.00 to $105.00 on 5,373 head and a five-day rolling average of $95.93. Pork cutouts total 169.02 loads with 145.73 loads of pork cuts and 23.29 loads of trim. Pork cutout values: up $0.97, $104.12.

Thursday Morning Livestock Market Update - Cash Cattle Trade Expected

GENERAL COMMENTS:

Traders anticipated cash cattle would trade Wednesday, but when no business was done, caution set in, and live cattle futures slipped. Spillover pressure was felt from the triple-digit losses in feeder cattle. Cash trading has been pushed off until Thursday with anticipation packers will need to step up and pay more for cattle due to strong movement of beef over the holiday weekend. This does not necessarily mean packers will need to be aggressive as they have some cattle contracted ahead, but with the lower cash prices last week, they may pay steady to slightly higher money and still retain good margins. Boxed beef was mixed Wednesday with choice up $0.87 while select declined $1.79.

Hogs showed much promise early Wednesday, but futures slipped as cash and cutouts showed weakness. All but front-month October hogs closed in positive territory, keeping hopes alive for higher prices. Traders were looking for strong movement of pork over the holiday, and it seems that has been the case. However, packers are still wrestling with low margins and are working the market aggressively. The National Direct Afternoon hog report showed cash down $0.41. Cutouts was down $1.18 with good movement of product. Packers look to be making up for lost time with a projected Saturday slaughter of 310,000 head.

	BULL SIDE		BEAR SIDE
1)	Steady to higher cash trade should support the market. Packers will need to keep ahead of the strong slaughter pace.	1)	Cattle futures already have an increase in cash price factored in. This may keep futures choppy through the end of the week.
2)	Beef production is expected to decline during the fourth quarter, which may result in increased cattle prices if demand holds as well as it has been.	2)	Feeder cattle prices at auctions have been weaker over the past two weeks. Buyers have become more cautious over feed prices and upside price potential for beef in the current market environment.
3)	Hog slaughter is improving, suggesting demand remains strong. Even though packer margins are low, packers will need to purchase hogs to satisfy demand.	3)	Packers may not be overly aggressive in the cash market as margins are tight and sufficient hogs are available for slaughter.
4)	Hog futures may be building support after retesting long-term price support. If this holds, traders may buy into the market more aggressively.	4)	Pork exports have been slower than desired and with the uncertainty over exports due to export sales reports not being released the past two weeks and again this week, traders are cautious.

Wednesday Closing Livestock Market Update - Beef and Pork Markets Move Lots of Product

GENERAL COMMENTS:

It was a mixed day throughout the livestock complex, as both the pork and beef markets were able to move a lot of product throughout the day, but the cattle complex faced pushback technically. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.41 with a weighted average of $97.89 on 10,957 head. December corn is down 5 cents per bushel and December soybean meal is up $4.70. The Dow Jones Industrial Average is up 435.98 points.

LIVE CATTLE:

The live cattle market had a pullback kind of day as the futures market ran out of steam while it waits for cash cattle to really trade this week. After powering higher late last week and early this week, the futures complex seemed to need to pause before it works higher. October live cattle closed $0.80 lower at $144.25, December live cattle closed $0.80 lower at $150.07 and February live cattle closed $0.70 lower at $154.50. Another positive thing about Wednesday's market was the huge movement in boxed beef product. After retailers sold aggressively over the three-day weekend, they're now restocking. The cash cattle market didn't see much interest throughout Wednesday's market as feedlots and packers are in a deadlock. Feedlots know that packers need to buy cattle in order to keep from getting short-bought, but packers also know that if there's a time to pump the breaks on this year's cash cattle market, now is the time to do so. 

Wednesday's slaughter is estimated at 128,000 head, 3,000 head more than a week ago and 6,000 head more than a year ago.

Boxed beef prices closed mixed: choice up $0.87 ($261.34) and select down $1.79 ($237.51) with a movement of 218 loads (121.05 loads of choice, 42.46 loads of select, 23.11 loads of trim and 30.94 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady to $2.00 higher. Given that feedlots are playing hard ball, it's not unlikely that prices trade slightly higher as packers need to buy cattle to keep from becoming short-bought.

FEEDER CATTLE:

The feeder cattle market was hesitant, but as weakness started to spread throughout the live cattle complex, feeders plunged lower. September feeders closed $2.15 lower at $182.02, October feeders closed $2.15 lower at $183.95 and November feeders closed $1.57 lower at $185.45. The market still sits in a fine position to rally, but after a strong push last week, the feeder cattle complex seemed to wave its white flag for the day and took the easy option in trading lower. If the cash cattle market can establish steady to higher trade later this week, then the gusto that the market possessed last week may come alive again. At Winter Livestock in Dodge City, Kansas, compared to last week, feeder steers weighing 600 to 1,000 pounds sold steady to $2.00 lower. Steer calves weighing 400 to 600 pounds traded $5.00 to $10.00 higher. Feeder heifers weighing 700 to 900 pounds sold steady to $2.00 higher. Heifer calves weighing 400 to 700 pounds sold $5.00 to $10.00 lower. Slaughter cows and culls sold steady to $2.00 higher. Feeder cattle supply over 600 pounds was 39%. The CME Feeder Cattle Index for Sept. 6: down $0.44, $179.14.

LEAN HOGS:

The lean hog market trudged through Wednesday's trade with modestly higher tones as the futures complex closed higher, packers moved a considerable volume of product, and even though cash hog prices closed slightly lower, more than 10,000 head did trade. October lean hogs closed $0.02 lower at $91.07, December lean hogs closed $0.10 higher at $83.60 and February lean hogs closed $0.35 higher at $87.42. It makes perfect sense that after the long Labor Day weekend, packers are seeing orders pop up as retailers begin to restock their coolers. Seeing the movement of product is an especially important point for the hog sector as packers need somewhere to go with product given that export markets are limited. Pork cutouts total 352.46 loads with 318.83 loads of pork cuts and 33.63 loads of trim. Pork cutout values: down $1.18, $103.15. Wednesday's slaughter is estimated at 483,000 head, 8,000 head more than a week ago and 6,000 head more than a year ago. The CME Lean Hog Index for Sept. 5: down $1.48, $103.26.

­­­­­THURSDAY'S CASH HOG CALL: Steady. Packers still have a long rope to walk even that their margins are so incredibly thin. It's likely that the market sees another sizeable movement of hogs trade but it's unlikely that prices strengthen much until packers have more margin to work with.