Thursday Midday Livestock Market Summary - Livestock Contracts Trade Higher

GENERAL COMMENTS:

The livestock complex is trading with slightly higher tones as Thursday's afternoon approaches. The cash cattle market has seen a few sales develop here and there, but largely the market hasn't seen a set price established in either region yet. December corn is down 4 cents per bushel and December soybean meal is up $8.40. The Dow Jones Industrial Average is down 177.31 points.

LIVE CATTLE:

The live cattle complex is trading higher into Thursday's noon hour as traders consciously keep the market trading merely sideways as they wait for cash cattle trade to develop. The market saw and handful of cattle traded in Iowa late Wednesday afternoon for $295 live and $185 to $186 dressed, and this morning a light (extremely light) volume of cattle sold in Nebraska at $292 which is $3.00 lower than last week's weighted average. Asking prices in the South remain firm at $180 to $182 and in the North at $294 plus. More business will likely develop throughout the day, and at this point, steady to slightly weaker tones seem to summarize the market's early trades. October live cattle are up $0.40 at $179.07, December live cattle are up $0.20 at $183.10.

Beef net sales of 11,400 mt for 2023 were down 25% from the previous week and 28% from the prior 4-week average. The three primary buyers were South Korea (4,200 mt), Japan (2,300 mt) and Hong Kong (1,300 mt).

Boxed beef prices are higher: choice up $0.16 ($317.21) and select up $0.50 ($292.09) with a movement of 60 loads (31.90 loads of choice, 15.46 loads of select, 3.40 loads of trim and 9.07 loads of ground beef).

FEEDER CATTLE:

With corn prices again trading lower and the live cattle contracts pushing higher prices into Thursday's noon hour, the feeder cattle complex is seeing ample signs of support which is why the complex is trading higher. September feeders are up $1.05 at $249.62, October feeders are up $1.20 at $252.07 and November feeders are up $1.17 at $253.17. Hot temperatures this week are affecting cattle and are stressful on all classes, and some sale barns are noting that again this year buyers are buying unweaned calves without a vaccination protocol at a discount compared to the rest of the market.

LEAN HOGS:

The lean hog complex is chopping sideways as traders throw mixed interest toward the market. At this point, it seems as if traders want to respect the support plane around $78.00 as they're advancing the market despite pork demand continuing to remain in question. October lean hogs are up $0.75 at $79.30, December lean hogs are up $0.22 at $71.30 and February lean hogs are up $0.12 at $75.50. Our Southern neighbor (Mexico) was an aggressive buyer this past week which helped boost this week's export sales data.

The projected lean hog index for 8/23/2023 is down $0.97 at $96.40, and the actual index for 8/22/2023 is down $0.67 at $97.37. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.15 with a weighted average price of $87.85, ranging from $82.00 to $89.50 on 2,582 head and five-day rolling average of $89.79. Pork cutouts total 139.31 loads with 114.82 loads of pork cuts and 24.49 loads of trim. Pork cutout values: up $3.38, $104.17.

Pork net sales of 33,000 mt for 2023 were up 15% from the previous week and 40% from the prior 4-week average. The three primary buyers were Mexico (18,000 mt), South Korea (5,800 mt) and Colombia (3,300 mt).

Thursday Morning Livestock Market Update - Hogs Struggle to Find Support

GENERAL COMMENTS:

Cash cattle have not traded as the standoff continues for another week. Feedlots believe they will be able to receive higher prices due to the strength of boxed beef. They feel packers will need to step up to purchase to supply the market. Smaller show lists also provide feedlots with some confidence for higher prices. Packers are seeing better margins but want to keep or improve those margins. There may be some trade today, but it is expected to be very limited. Boxed beef showed choice unchanged from the previous day at $317.05 with select up $2.08. The buying interest for feeder cattle recently has been tempered a bit which is likely the result of the choppiness of futures. Weekly export sales will be released this morning but may have limited impact on trading as the focus is cash.

Hog futures were unable to find support with both cash and cutouts down again yesterday. The nearby October discount to cash is narrowing but not in a supportive way. Cash continues to decline, and futures continue to decline but at a slower pace. October futures are now $10.00 under cash while they had been over $20 under cash not too long ago. The National Direct Afternoon Hog report showed a decline of $1.33 with the weighted average at $88.42. Cutouts fell again yesterday posting a loss of $2.86. The positive aspect yesterday was July inventory of frozen pork was down 10% from a year ago. Saturday hog slaughter is estimated at 140,000 head.

	BULL SIDE		BEAR SIDE
1)	Show lists are smaller this week which may require packers to step up to purchase what they need and for deferred delivery.	1)	Cattle futures have been struggling and unable to resume an uptrend. The market may have run out of steam as traders turn cautious.
2)	Boxed beef continues to show strength improving packer margins allowing them to spend a little more to obtain the supply they need and to keep ahead by purchasing for deferred delivery.	2)	The friendly Cattle on Feed report failed to generate strong buying interest with the results already factored in at current prices.
3)	A decrease of pork in cold storage during July indicates demand was good and increased slaughter pace was not adding to stocks.	3)	Pork cutouts continue to decline putting pressure on cash and futures.
4)	Three days of liquidation may have run its course with some hog futures contracts at a support level. The second half of the week could provide some short covering again.	4)	If hog futures move below the lows of yesterday and below technical support, further liquidation may be triggered.

Wednesday Closing Livestock Market Update - Live Cattle Close Slightly Higher

GENERAL COMMENTS:

The livestock complex struggled with the corn market's slight uptick as both the feeder cattle and lean hog contracts closed lower, but the live cattle complex was able to keep a mildly higher position through closing. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.33 with a weighted average price of $88.42 on 6,410 head and a five-day rolling average of $90.23. December corn is up 11 cents per bushel and December soybean meal is up $6.00. The Dow Jones Industrial Average is up 184.15 points.

Wednesday's Cold Storage Report shared that total red meat supplies in freezers were down slightly from the previous month and down 14% from a year ago. Total pounds of beef in freezers were up 2% from last month but down 18% from a year ago. Frozen pork supplies were down 3% from last month and down 10% from a year ago. Stocks of pork bellies were down 26% from last month but up 21% from last year.

LIVE CATTLE:

The live cattle complex closed mostly higher with just the December 2023 and February 2024 contracts closing slightly lower. Traders are appreciating the support in boxed beef prices, although they know that prices could be pressured again in the next couple of weeks before holiday buying begins. It's also encouraging that feedlots are holding out for at least steady prices as still no cattle have traded, and feedlots have turned down bids. A single bid of $290 was offered throughout the day in Nebraska, but feedlots didn't jump at its showing. October live cattle closed $0.05 higher at $178.67, December live cattle closed $0.22 lower at $182.92 and February live cattle closed $0.10 lower at $187.20. 

Wednesday's slaughter is estimated at 118,000 head, 5,000 head less than a week ago and 6,000 head less than a year ago.

Boxed beef prices closed higher: choice steady ($317.05) and select up $2.08 ($291.59) with a movement of 109 loads (64.51 loads of choice, 33.04 loads of select, zero loads of trim and 11.68 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. Packers are going to fight "guns blazing" to work prices lower, but feedlots also want to keep prices as close to steady as possible, so, once again, this week's trade is a gamble of wills between packers and feedlots.

FEEDER CATTLE:

The feeder cattle complex tried to keep its momentum through Wednesday's closing, but, with corn prices closing $0.09 to $0.11 higher, traders instead waived their white flag and let the contracts close lower. September feeders closed $0.42 lower at $248.57, October feeders closed $0.35 lower at $250.87 and November feeders closed $0.27 lower at $252.00. At Huss Livestock Market in Kearney, Nebraska, compared to the last sale two weeks ago, steers weighing 950 pounds and over sold $2.00 higher. Demand was moderate to good from the buyers in the crowd. Feeder cattle supply over 600 pounds was 97%. The CME Feeder Cattle Index for Aug. 22: down $0.21, $244.75.

LEAN HOGS:

The lean hog complex sank lower yet again through Wednesday's end as traders noted the uptick in corn prices and the continued pressured in pork cutout values. October lean hogs closed $1.02 lower at $78.55, December lean hogs closed $1.30 lower at $71.05 and February lean hogs closed $1.17 at $75.37. Thursday's market will be interesting to watch because traders are at the bottom side of this trading range and if pressure continues through Thursday's market, they'll have to decide if they're going to break through this support plane or chop the market sideways. If the belly wouldn't have had a $17.19 drop, the cutout value may have been able to close slightly higher as the butt gained $3.17 and the rib closed $2.51 higher. Pork cutouts totaled 298.96 loads with 264.41 loads of pork cuts and 34.55 loads of trim. Pork cutout values: down $2.86, $100.79. Wednesday's slaughter is estimated at 473,000 head, 2,000 head more than a week ago and 9,000 head less than a year ago. The CME Lean Hog Index for Aug. 21: down $0.77, $98.04.

THURSDAY'S HOG CALL: Steady. Packers showed Wednesday's market a little more support but, with cutout values being mostly pressured, I tend to believe that prices will remain steady.

Wednesday Midday Livestock Market Summary - Cattle Look Past Higher Corn Prices and Push Onward

GENERAL COMMENTS:

The livestock complex is seeing mixed interest heading into Wednesday's noon hour as the cattle contracts are looking past the slight uptick in corn prices as they climb higher into the day's afternoon. Meanwhile, the lean hog complex continues to struggle as pork demand remains scant. December corn is up 8 3/4 cents per bushel and December soybean meal is up $5.00. The Dow Jones Industrial Average is up 146.08 points.

LIVE CATTLE:

The back-and-forth trading saga continues in the live cattle complex as the live cattle market is pushing for higher prices heading into Wednesday's noon hour. Traders are looking at the market's strong demand and believe that's a valid enough reason, coupled with the market's bullish fundamental outlook, to push the contracts higher into today's afternoon. Still, no cash cattle trade has developed and with bids and asking prices still elusive, trade could be delayed until Thursday at this point. October live cattle are up $0.52 at $179.15, December live cattle are up $0.25 at $183.40 and February live cattle are up $0.35 at $187.65.

Boxed beef prices are higher: choice up $0.43 ($317.48) and select up $2.55 ($292.06) with a movement of 62 loads (36.51 loads of choice, 17.19 loads of select, zero loads of trim and 8.51 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex seems to be looking at Wednesday's market saying, "Ok, we can trade higher on the fact that feeder cattle demand is strong and given the recent onset of slightly higher tones in the live cattle contracts, but if any of that support dissipates, the pressure from the corn complex may not be able to be overlooked." Heading into Wednesday's noon hour corn prices are trading $0.07 to $0.08 higher which isn't a massive concern given the market's recent decline, but feeders never feel overly confident ahead of harvest when corn prices do flirt with trade higher. September feeders are trading steady at $249.00, October feeders are up $0.15 at $251.37 and November feeders are up $0.15 at $252.42.

LEAN HOGS:

The lean hog complex is continuing to traipse lower as slightly higher corn prices and a lack of demand don't bode well for the market. October lean hogs are down $0.37 at $79.20, December lean hogs are down $0.82 at $71.52 and February lean hogs are down $0.75 at $75.80. At this point, the market's sideways/somewhat lower trading range is expected to continue until traders find some better fundamental support -- especially in the form of better pork demand, which could be a challenging request given the uncertainty of Prop 12 going into state later this year.

The projected lean hog index for 8/22/2023 is down $0.67 at $97.37, and the actual index for 8/21/2023 is down $0.77 at $98.04. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.84 with a weighted average price of $90.00, ranging from $86.00 to $94.00 on 2,158 head and a five-day rolling average of $90.99. Pork cutouts total 169.78 loads with 148.40 loads of pork cuts and 21.38 loads of trim. Pork cutout values: down $1.64, $102.01.