Friday Midday Livestock Market Summary - Complex Sees Mixed Demand

GENERAL COMMENTS:

The livestock complex is seeing hit and miss support in Friday's market as the feeder cattle complex wanes lower as a lack of overall support stifles the market, especially now that corn is trading higher. The lean hog complex has seemed to run out of steam after trading excitedly through Thursday's market as the industry saw excellent cash demand earlier in the week and a strong export report. The live cattle complex has traded on both sides of steady Friday morning but with midday boxed beef prices sporting stronger figures, its market is trading mildly higher. December corn is up 8 1/4 cents per bushel and December soybean meal is up $4.90. The Dow Jones Industrial Average is down 541.17 points.

LIVE CATTLE:

The live cattle complex began the day off trading lower but as time has progressed the market has turned more friendly and is turning mildly higher heading into Friday's afternoon. October live cattle are up $0.02 at $145.35, December live cattle are up $0.35 at $148.22 and February live cattle are up $0.20 at $151.82. Helping the market grow stronger as the day's progressed is undoubtedly the notice of higher midday boxed beef prices. As the boxed beef market has seen more support this week, the market's recent support begs the reasonable question of: Have boxed beef prices found their bottom for the season? The cash cattle market hasn't seen any more trade develop as packers did most of their buying on Thursday. Throughout the week, Southern live cattle have traded at $144, which is $1.00 higher than last weeks weighted average and Northern dressed cattle sold mostly for $230, which is also $1.00 higher than last week's weighted average.

Fresh beef imports for the week total 21,245 metric tons with Canada, Mexico and Australia carrying the lion's share of the trade. To date, fresh beef imports in 2022 are 7% higher than compared to a year ago. Processed beef imports for the week totaled 1,628 metric tons with Brazil contributing 63% of the shipment. To date processed beef imports in 2022 are 18% higher than compared to a year ago.

Boxed beef prices are higher: choice up $0.19 ($247.55) and select up $1.67 ($218.66) with a movement of 83 loads (48.01 loads of choice, 18.33 loads of select, zero loads of trim and 17.05 loads of ground beef).

FEEDER CATTLE:

The feeder cattle wouldn't budge and even contemplate trading higher through Thursday's market, which lent some positive factors that could have helped the market trade mildly higher (weaker corn prices, higher fat cattle trade), but now that the market is looking at a $0.06 to $0.07 rally in corn, it's surely not trading higher into Friday's afternoon. October feeders are down $0.40 at $175.27, November feeders are down $0.22 at $176.20 and January feeders are down $0.82 at $177.02. The feeder cattle market has hit a lull where it desperately needs support, and with buyers and traders leery of the U.S. economy, feeder prices, interest rates and inflation -- the market could be settling into a lower tone for the mean time.

LEAN HOGS:

After posting a rather sporty rally throughout Thursday's market, which was largely fueled by strong exports and continued support in domestic demand, the lean hog complex has seemed to run of out steam come Friday. December lean hogs are down $0.57 at $77.20, February lean hogs are down $0.27 at $80.02 and April lean hogs are down $0.12 at $85.50. Midday pork cutout values are higher (which doesn't mean a whole lot given that anything could happen by the afternoon's report), but it is a stronger price nonetheless and packers are meticulously watching demand cues.

The projected lean hog index for Oct. 6 is down $0.12 at $92.65, and the actual index for Oct. 5 is down $0.16 at $92.77. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.68 with a weighted average of $87.64, ranging from $83.00 to $95.00 on 3,523 head and a five-day rolling average of $87.83. Pork cutouts total 166.92 loads with 144.57 loads of pork cuts and 22.35 loads of trim. Pork cutout values: up $1.76, $103.17.

U.S. Cattlemen’s Association Applauds SEC Protection Bill

More than 100 members of the U.S. House of Representatives introduced legislation that would shield agricultural producers from a climate disclosure rule proposed by the Securities and Exchange Commission. U.S. Cattlemen’s Association President Brooke Miller says, “U.S. farmers and ranchers absolutely need this exemption from the SEC’s climate disclosure proposal. Our producer-members already face nearly insurmountable proposed and ongoing regulatory burdens from an array of federal agencies.” Miller also says producers’ main job should be putting American beef on American plates, not managing the complex clerical duties of SEC compliance rules. The “Protect America’s Farmers from the SEC Act” prohibits the SEC from requiring an issuer of securities to disclose greenhouse gas emissions from upstream and downstream activities in the issuer’s value chain arising from a farm. The SEC’s proposed rule says registrants would be required to disclose information about their direct and indirect greenhouse gas emissions and climate-related risks.

Friday Morning Livestock Market Update - Another Uncertain Trading Day

GENERAL COMMENTS:

Cash cattle traded higher as expected with both live and dressed cattle $1.00 higher. Feedlots were able to hold for higher prices with packers needing to procure the cattle required for slaughter this week with some contracted ahead. It will be an interesting day and upcoming week as live cattle futures have not been able to trend higher even though cash traded higher. The pressure on the market mainly stemmed from less-than-desired weekly export sales. This leaves export potential in question through the end of the year as the dollar remains strong to many other currencies. Export sales totaled 16,400 metric tons (mt). Boxed beef was mixed again with choice up $0.30 and select down $2.23. Feeder cattle struggled even though corn futures were under pressure.

Hogs posted a good day right from the start Thursday with all futures contracts opening higher and extending the gains. The downside is now these chart gaps may need to be filled. Cash was not supportive Thursday with the National Direct Afternoon report showing a decline of $3.59 from Wednesday. However, this was offset by a gain of $2.00 in cutouts. Cash hogs are expected lower again Friday, which may temper some of the upside potential. Strong export sales pushed prices higher right from the start as there was fear export sales would not be very strong. Export sales totaled 34,300 mt with China again be listed as one of the top buyers. They have been fairly consistent for a while now. Exports to China during the month of August totaled 32,436 mt, up 21% from a year ago. Saturday hog slaughter is expected 150,000 head.

	BULL SIDE		BEAR SIDE
1)	Cash cattle traded solidly higher for the week. This will provide feedlots with more confidence to hold for higher prices again next week.	1)	Feeder cattle futures could not find strength, even though corn was under pressure much of the day.
2)	Cattle futures may be building support as traders see higher cash and tighter supplies in the future.	2)	Low export sales keep the concern over international demand slowing. This also is true for domestic demand.
3)	Strong export sales indicate international demand remains strong. China continues to buy pork with purchases higher than last year.	3)	Hog futures left a chart gap on the open Thursday which may be filled before the market trends higher.
4)	Hog futures have regained the losses from Tuesday, indicating the losses might have been an aberration rather than a fundamental reality.	4)	Cash is expected lower for hogs as most packers have their needs purchased for the week.

Thursday Closing Livestock Market Update - Cash Cattle Trade $1.00 Higher

GENERAL COMMENTS:

It was a mixed day for the livestock complex as cattle faced pushback from traders but did see cash cattle trade $1.00 higher, but the lean hog complex rallied throughout the day as it celebrated a strong export report. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.59 with a weighted average of $89.40 on 8,321 head. December corn is down 8 1/2 cents per bushel and December soybean meal is down $5.10. The Dow Jones Industrial Average is down 346.93 points.

LIVE CATTLE:

Traders may have kept an arm's distance from the live cattle complex throughout the day as they were discouraged right from the day's get-go with the lousy export report, but that didn't stop the cash cattle market from trading higher. A light trade was developed in the South at mostly $144 which is $1.00 higher than a week ago, and dressed cattle traded for $230 which is $1.00 higher than last week's business too. Some Northern trade was also reported at $148 as it's evident that packers are short bought and keenly aware that front-end supplies of cattle are thin and only going to become thinner as time passes by. October live cattle closed $0.65 higher at $145.32, December live cattle closed $0.05 lower at $147.87 and February live cattle closed $0.12 lower at $151.62. Thursday's slaughter is estimated at 127,000 head, steady with a week ago and 6,000 head more than a year ago.

Beef net sales of 16,400 mt for 2022 were primarily for South Korea (6,000 mt) Japan (2,200 mt) and Mexico (2,200 mt).

Thursday's actual slaughter data share that for the week ending Sept. 24, steers averaged 915 pounds, which is 3 pounds less than the previous week but 1 pound heavier than a year ago. Heifers for the same week averaged 836 pounds, which is 4 pounds more than a week ago and 3 pounds more than a year ago.

Boxed beef prices closed mixed: choice up $0.30 ($247.36) and select down $2.23 ($216.99) with a movement of 208 loads (116.51 loads of choice, 40.05 loads of select, 22.69 loads of trim and 29.10 loads of ground beef). The choice/select spread sits at 30.37.

FRIDAY'S CASH CATTLE CALL: Steady. Given that prices are now established in both regions they'll likely remain steady.

FEEDER CATTLE:

On a normal day, one would suspect that when the corn market is trading $0.07 to $0.08 lower and the cash cattle market is gaining steam that feeders would have traded higher, but that wasn't the case for Thursday's market. The feeder cattle contracts moved higher Wednesday afternoon but come Thursday the market simply ran out of technical support as traders kept a cautious distant between them and the cattle contracts. October feeders closed $0.82 lower at $175.72, November feeders closed $0.90 lower at $176.42 and January feeders closed $0.22 lower at $177.85. At La Junta Livestock Commission in La Junta, Colorado, compared to last week, steer calves traded $3.00 to $5.00 lower. Heifer calves weighing under 450 pounds were lightly tested, those weighing 450 to 500 pounds sold mostly steady, those weighing 500 to 600 pounds traded $5.00 to $8.00 lower, and those weighing 600 to 700 pounds traded steady. Yearling steers and heifers traded steady to $1.00 higher. Slaughter cows traded $5.00 to $8.00 lower and slaughter bulls sold $8.00 to $10.00 lower. Feeder cattle supply over 600 pounds was 46%. The CME Feeder Cattle Index for Oct. 5: up $0.11, $175.69.

LEAN HOGS:

While the cattle contracts had a retracting day technically, the lean hog complex took the market's strong export data as a sign to keep trading higher, and so the complex did! December lean hogs closed $1.27 higher at $77.77, February lean hogs closed $1.42 higher at $80.30 and April lean hogs closed $1.10 higher at $85.62. The market has gained momentum throughout the later half of the week, and given that the contracts gapped higher Thursday morning, traders are seeming more supportive of the market thanks to the steadiness of the fundamental support they've seen. Again, today pork cutout values closed higher (up $2.00 to $101.29 from Wednesday's close) which stemmed from both the ham and belly as they both jumped over $6.00 higher. Pork cutouts totaled 297.93 loads with 253.98 loads of pork cuts and 43.95 loads of trim. Pork cutout values: up $2.00, $101.29. Thursday's slaughter is estimated at 489,000 head, 13,000 head more than a week ago and 8,000 head more than a year ago. The CME Lean Hog Index for Oct. 4: down $0.51, $92.93.

Pork net sales of 34,300 mt for 2022 were primarily for Mexico (16,800 mt), China (10,100 mt) and Canada (1,900 mt).

­­­­­FRIDAY'S CASH HOG CALL: Lower. Packers bought aggressively on Tuesday and Wednesday, which likely means that they'll show the market little interest ahead of the weekend.