Friday Closing Livestock Market Update - Traders Support Contracts

GENERAL COMMENTS:

The livestock complex was well supported through the week's end, as all three markets rounded out the week mostly higher. Some cash cattle trade was reported shortly after the noon hour Friday, and the feedlots that elected to wait until late in the week to sell were rewarded with better prices than those who sold early. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.03 with a weighted average price of $84.62 on 2,129 head. December corn is down 1/4 cent per bushel and December soybean meal is up $2.70. The Dow Jones Industrial Average is up 247.54 points.

From Friday to Friday, livestock futures scored the following changes: august live cattle up $2.15, October live cattle up $2.35; August feeder cattle up $2.05, September feeder cattle up $2.68; October lean hogs down $2.30, December lean hogs down $2.47; September corn down $0.09, December corn down $0.05.

LIVE CATTLE:

Traders weren't sleeping on the job when it came to Friday's market as the live cattle contracts closed higher and again reassured the marketplace that even traders are aware of the complex's long-term supportive outlook. The fact that traders tested current support planes midweek and elected to push prices higher even though cash cattle traded $1.00 to $3.00 lower is extremely supportive. October live cattle closed $0.45 higher a $181.17, December live cattle closed $0.60 higher at $185.12 and February live cattle closed $0.60 higher at $189.20. A light trade has been reported in the South at mostly $179, which is generally steady with last week's weighted average. A few more Northern cattle have traded at $185, which is $1.00 lower than last week's weighted average. The cattle that sold on Thursday in the North traded at mostly $292 which is $3.00 lower than last week's weighted average. 

Friday's slaughter is estimated at 122,000 head, 4,000 head more than a week ago and 1,000 head less than a year ago. Saturday's slaughter is projected to be around 16,000 head. The week's estimated slaughter amounts to 626,000 head, 10,000 head more than a week ago and 52,000 head less than a year ago.

Boxed beef prices closed higher: choice up $0.27 ($317.90) and select up $0.76 ($292.67) with a movement of 79 loads (61.07 loads of choice, 10.59 loads of select, zero loads of trim and 7.66 loads of ground beef). Throughout the week, choice cuts averaged $317.04 (up $6.63 from last week's weighted average) and select cuts averaged $290.60 (up $6.03 from last week's weighted average) with a total movement of cuts, grinds and trim of 451 loads.

MONDAY'S CATTLE CALL: Steady. Packers are going to continue to try to work the market lower, but as we were again shown this past week, feedlots aren't going to hand them over cattle unless they pay close to what their asking prices are.

FEEDER CATTLE:

The feeder cattle complex had another stellar day as the market continues to thrive on the strength seeping over from the live cattle complex, and from the fact that corn prices are remaining stable and that buyer demand in the countryside is holding strong, even if higher temperatures were seen in most of the country this past week. September feeders closed $0.45 higher at $251.20, October feeders closed $0.72 higher at $253.97 and November feeders closed $1.05 higher at $255.40. So long as the live cattle market keeps its momentum, the feeder cattle complex should be able to maintain its strong position as feeder cattle supplies are only going to grow thinner as the year goes on. The Oklahoma Weekly Cattle Auction Summary shared that, throughout the entire state and when compared to a week ago, feeder steers traded steady to $3.00 lower and feeder heifers traded $2.00 to $3.00 lower. Steer calves sold $2.00 to $4.00 lower and heifer calves traded $8.00 to $10.00 lower, expect those weighing 500 to 600 pounds which sold steady. High temperatures were largely to blame for this week's softness as much of the state had temperatures topping over 100 degrees. Slaughter cows and bulls sold steady to $1.00 lower. Feeder cattle supply over 600 pounds was 59%. The CME Feeder Cattle Index for Aug. 25: up $0.45, $245.59.

LEAN HOGS:

All in all, the lean hog complex had another strong performing day throughout the futures complex, even though the spot October contract closed lower. I think the biggest reason why the October contract came under pressure ahead of closing was because traders aren't seeing the fundamental support necessary to break beyond current resistance levels. And, Friday's afternoon pork cutout report is just another example of the volatility that's currently laced throughout the hog and pork markets as the carcass value fell $11.50 lower because of the $58.48 drop in the belly. October lean hogs closed $0.65 lower at $79.82, December lean hogs closed $0.12 higher at $72.02 and February lean hogs closed $0.42 higher at $76.37. Pork cutouts total 317.82 loads with 277.73 loads of pork cuts and 40.09 loads of trim. Pork cutout values: down $11.50, $93.42. Friday's slaughter is estimated at 468,000 head, 1,000 head less than a week ago and 21,000 head more than a year ago. Saturday's slaughter is projected to be around 156,000 head. Thursday's slaughter was revised to 465,000 head. The CME Lean Hog Index for Aug. 23: down $0.97, $96.40.

MONDAY'S HOG CALL: Lower. Packers never really show much interest in the cash hog market on Monday, and with the sharp decline in cutout values, they'll likely remain cautious buyers early in the week.

Friday Midday Livestock Market Summary - Feedlots Continue to Hold Out

GENERAL COMMENTS:

The livestock complex is trading higher into Friday's noon hour as corn prices continue to trend mostly steady. No new cash cattle trade has been reported but more trade will likely develop later this afternoon. December corn is up 3/4 cent per bushel and December soybean meal is up $2.20. The Dow Jones Industrial Average is up 176.55 points.

LIVE CATTLE:

Seeing the continued support traders are throwing at the live cattle market is invigorating as traders seem to be looking beyond the technical pressure endured last week and instead fixating their attention on the market's strong long-term fundamentals. Still, no new cash cattle trade has been reported as feedlots simply refuse to puke cattle to packers. Packers would love nothing more than to be able to work the cash cattle complex $5.00 lower on a weekly basis over the next month or so, but feedlots are making that wish seem somewhat far-fetched at this point. Bids of $185 live and $292 dressed are currently being offered in Nebraska, but the market is still dead silent in the South. Asking prices in the South are noted at $180 to $182, and in the North at $294 plus. It's going to be a waiting game to see who wins this week's war. Will packers up their bids to ensure they get cattle bought? Or will feedlot managers let some cattle trade just to ensure their showlists don't become burdensome? Or last, but certainly not lacking any excitement, will this week's market be thinly traded and both parties saddle up nearly next week for a continued cage fight? Time will tell friends, don't go anywhere too soon.

A light to moderate trade was reported in the North Thursday afternoon at $292 dressed which is $3.00 lower than last week's weighted average. October live cattle are up $0.20 at $180.90, December live cattle are up $0.25 at $184.77 and February live cattle are up $0.27 at $188.87.

Boxed beef prices are higher: choice up $0.20 ($317.83) and select up $0.24 ($292.15) with a movement of 62 loads (50.60 loads of choice, 7.40 loads of select, zero loads of trim and 4.42 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is loving the support that's trickling into its market as traders note the continued support currently being seen in the live cattle complex, and in mostly steady corn prices. September feeders are down $0.02 at $250.72, October feeders are up $0.17 at $253.45 and November feeders are up $0.45 at $254.80. It's encouraging to see traders willing to support the feeder cattle late in the week as temperatures have been hot this week and cash cattle prices showing slightly weaker tones. But even so, the continued support of aggressive feeder cattle buying in the countryside cannot be overlooked nor downplayed as buyers are continuing to shell out money for both feeders and calves as they know supplies are only going to grow increasingly thin the later we get into 2023.

LEAN HOGS:

The lean hog complex is back to rallying as traders see the steady trade in corn prices as an opportunity on which they need to capitalize. October lean hogs are up $1.70 at $82.17, December lean hogs are up $2.00 at $73.90 and February lean hogs are up $2.00 at $77.95. The spot October contract is flirting with closing above the market's nearby resistance at $82.00, but it wouldn't be surprising to see traders round out Friday's close right below that threshold and look for support nearly next week to decide if that's a good decision or not. At this point technically there's enough support in the market for traders to push the contract above that level, but fundamentally speaking, support is lacking.

The projected lean hog index for 8/24/2023 is down $1.22 at $95.18, and the actual index for 8/23/2023 is down $0.90 at $96.40. Hog prices are lower on the Daily Direct Morning Hog Report, down $3.25 with a weighted average price of $84.60, ranging from $81.00 to $87.00 on 1,458 head and a five-day rolling average of $88.11. Pork cutouts are unavailable as the USDA seems to be experiencing technical issues.

Friday Morning Livestock Market Update - Cattle Trade Pushed to the End of the Week

GENERAL COMMENTS:

Live cattle futures struggled for a time, but traders found the wherewithal to buy aggressively into the market. It is possible traders are already looking past this week in anticipation cash will need to improve due to continued strength of boxed beef. Packers will not be able to reduce slaughter indefinitely if demand improves. Feedlots hope packers will become more aggressive due to improved margins. Boxed beef was again higher with choice up $0.58 and select up $0.32. Some cattle traded yesterday in Nebraska and Iowa about $2.00 to $3.00 lower than last week. No other trade has been done with the activity today likely following the lead so far. Weekly exports sales were 25% lower than the previous week totaling 11,400 mt. Feeder cattle found support as traders kept pace with live cattle and likely covered some short positions that had profit ahead of the weekend. Traders are likely trading for the short-term scalping the market due to it moving in a sideways pattern.

Hogs may be following a similar pattern to last week with short covering ahead of the weekend. If so, further strength should be seen today. This is likely due to very strong cutouts yesterday posting a gain of $4.13. The only category of cutouts showing a decline yesterday was ribs with a decline of $2.48. The National Direct Afternoon Hog report showed further weakness of cash with a decrease of $0.77. Packers are not expected to be aggressive today, but cash could trade slightly higher. Weekly export sales increased 15% from the previous week, totaling 33,000 mt. Saturday slaughter is estimated at 140,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures rebounded from technical support keeping the market in its recent sideways trend. Lower cash is already factored into the market.	1)	Cash cattle seem to be in a slow grind lower. Feedlots need to move some cattle as they will not hold onto them if it does not net any benefits.
2)	The cattle complex continues to be supported by tighter cattle numbers which should limit downside price potential through the end of the year.	2)	Average steer weights increased to 901 pounds, which is an increase of 6 pounds from the previous week and steady with last year. Cattle are not being pulled ahead as much as they had been, which is increasing tonnage.
3)	The sharp increase of pork cutouts is hopefully an indication of better demand surfacing. Prices have been beaten down sufficiently to increase consumer buying interest.	3)	The technical increase of hog futures may be difficult to retain if cash and cutouts remain weak.
4)	Good export sales may indicate international demand may increase due to attractive pork prices.	4)	Hog weights increased 1.l pounds to an average of 278.3 pounds this week. This is 1.8 pounds higher than a year ago.

Thursday Closing Livestock Market Update - Traders Support Contracts Through Closing

GENERAL COMMENTS:

All in all, it was a winning day for the livestock complex as traders supported the contracts and all three livestock markets were able to close higher Thursday. Cash cattle prices were tested in the North and prices were lower there, but that didn't have a negative effect on the futures complex. Hog prices are unavailable on the Daily Direct Afternoon Hog Report due to packer submission issues. December corn is down 2 1/4 cents per bushel and December soybean meal is up $11.30. The Dow Jones Industrial Average is down 252.39 points.

LIVE CATTLE:

Temperatures may be sweltering, and feedlot managers are praying that the weather breaks soon, but that didn't have a negative effect on the live cattle contracts in Thursday's trade. Traders supported the live cattle contracts throughout Thursday, which not only stands as a victory for the day, as cash cattle prices were pushed slightly lower, but also for the market's overall morale as traders seem to be establishing a bottom in the market's current trading range. October live cattle closed $2.05 higher at $180.72, December live cattle closed $1.60 higher at $184.52 and February live cattle closed $1.40 higher at $188.60. A light trade was reported throughout the day 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 $294 plus in the North. It's looking like trade will be slightly softer in terms of prices this week, but feedlots have done a tremendous job at only letting packers take a little here and there out of the market as opposed to hard $5.00 cuts each and every week. 

Thursday's slaughter is estimated at 124,000 head, 2,000 head more than a week ago and steady with a year ago.

Thursday's actual slaughter data shared that, for the week ending Aug. 12, steers averaged 901 pounds, which is 6 pounds more than a week ago but steady with a year ago. During the same week, heifers averaged 820 pounds, which is 9 pounds more than the previous week but still 2 pounds less than a year ago.

Beef net sales of 11,400 mt for 2023 were down 25% from the previous week and 28% from the prior four-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 closed higher: choice up $0.58 ($317.63) and select up $0.32 ($291.91) with a movement of 102 loads (60.81 loads of choice, 23.24 loads of select, 3.75 loads of trim and 14.62 loads of ground beef).

FRIDAY'S CATTLE CALL: $1.00 to $2.00 lower. Given that packers have been able to get some cattle bought out of the North for cheaper prices, the trend this week will likely be softer.

FEEDER CATTLE:

The feeder cattle complex was quick to rally in Thursday's market as traders showed up ready to play Thursday, and the combination of cheaper corn prices amid a higher trading live cattle complex was just enough to send prices $1.00 to $2.00 higher through closing. September feeders closed $2.17 higher at $250.75, October feeders closed $2.37 higher at $253.25 and November feeders closed $2.35 higher at $254.35. At Clovis Livestock Auction in Clovis, New Mexico, compared to last week, steers weighing 300 to 400 pounds traded steady to $1.00 lower while steers weighing 400 to 500 pounds traded steady to $3.00 lower. Feeder steers weighing 600 to 700 pounds sold softer but those weighing 700 to 800 pounds sold $2.00 to $12.00 higher. Heifer calves weighing 400 to 500 pounds sold $2.00 to $11.00 higher and feeder heifers weighing 600 to 700 pounds sold $7.00 to $12.00 stronger. Feeder cattle supply over 600 pounds was 22%. The CME Feeder Cattle Index for Auh. 23: up $0.39, $245.14.

LEAN HOGS:

Traders helped the lean hog complex close higher despite the market's lack of consistent support in pork cutout prices. October lean hogs closed $1.92 higher at $80.47, December lean hogs closed $0.85 higher at $71.90 and February lean hogs closed $0.57 higher at $75.95. The higher Thursday afternoon carcass price on the pork cutout report is somewhat misleading however as the belly alone jumped $15.24. Even so, gains were seen across all the other cuts except the rib which fell $2.48. Pork cutouts totaled 223.82 loads with 171.80 loads of pork cuts and 52.02 loads of trim. Pork cutout values: up $4.13, $104.92. Thursday's slaughter is estimated at 471,000 head, 5,000 head more than a week ago and 9,000 head less than a year ago. Wednesday's hog slaughter was revised to 464,000 head. The CME Lean Hog Index for Aug. 22: down $0.67, $97.37.

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

FRIDAY'S HOG CALL: Lower. Given that pork demand has been hard to come by, it's likely that prices will be lower in Friday's cash market.