Thursday Closing Livestock Market Update - Cattle Come Alive

GENERAL COMMENTS:

It was a tremendous day for the cattle complex as the contracts charged higher through Thursday's end, as traders seem to rooting for the market's long-term bullish outlook to re-spark the marketplace's morale. Some cash cattle trade was reported in the North, but the South remains quiet with feedlots holding out for at least steady prices. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.13 with a weighted average price of $80.26, ranging from $74.00 to $83.00 on 3,735 head. December corn is up 1/2 cent per bushel and December soybean meal is down $3.90. The Dow Jones Industrial Average is up 84.36 points.

LIVE CATTLE:

It was a ball-of-fire kind of day for the live cattle complex as bear-pushers expected the market to trade lower after the aggressive gains in which Wednesday's market saw, but the live cattle complex continued to truck higher throughout Thursday's trade. The spot October contract closed at the second highest price point that the contract has seen, which has traders and feedlots managers wondering if the fall rally is going to begin already? October live cattle closed $0.95 higher at $183.65, December live cattle closed $1.00 higher at $187.50 and February live cattle closed $1.02 higher at $191.40. A light trade was reported in Nebraska at $290 Thursday afternoon with is fully steady with last week's weighted average. The South didn't see any cash cattle trade and asking prices remain firm at $180 plus. 

Thursday's slaughter is estimated at 126,000 head, 2,000 head more than a week ago and 2,000 head less than a year ago.

Thursday's actual slaughter data shared that, for the week ending Aug. 26, steers averaged 906 pounds, which is 1 pound more than the previous week and 2 pounds heavier than a year ago. During the same week, heifers averaged 819 pounds, which is 1 pound less than the previous week and 2 pounds lighter than a year ago.

Boxed beef prices closed lower: choice down $1.91 ($311.66) and select down $1.44 ($286.17) with a movement of 167 loads (109.53 loads of choice, 32.96 loads of select, 2.96 loads of trim and 21.69 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady. Given the added momentum that the live cattle contracts saw throughout Thursday's trade, feedlots will likely hold out for at least steady prices.

FEEDER CATTLE:

With the corn complex again closing mostly steady, the feeder cattle contracts were able to thrive through Thursday's end as the market loved seeing the momentum in the live cattle market. September feeders closed $2.42 higher at $255.57, October feeders closed $2.40 higher at $258.87 and November feeders closed $2.07 higher at $260.27. The spot October contract rounded out the day at a new contract high, which continues to beg the question of 2023: What's next, and how high can this rocket soar? At Torrington Livestock Auction in Torrington, Wyoming, compared to last week, yearling steers traded $2.00 to $4.00 higher while yearling heifers traded mostly steady. There was only a small package of calves right off the cow offered so no market trend was noted. Feeder cattle supply over 600 pounds was 85%. The CME Feeder Cattle Index for Sept. 6: not available at this time.

LEAN HOGS:

With the lean hog complex closed sharply lower Wednesday afternoon, the contracts could trade mildly higher throughout Thursday's market without running into any pressure. Yes, cash prices did close higher Thursday afternoon, but less than 4,000 head traded, which isn't anything for the hog complex. Pork cutout values closed sharply lower as the $19.77 drop in the belly combined with the $7.27 drop in the ham left little room for the carcass price to even hope that it could close higher. October lean hogs closed $0.95 higher at $82.82, December lean hogs closed $0.82 higher at $75.27 and February lean hogs closed $0.70 higher at $79.15. Pork cutouts totaled 327.66 loads with 290.60 loads of pork cuts and 37.07 loads of trim. Pork cutout values: down $4.12, $94.21. Thursday's slaughter is estimated at 460,000 head, 9,000 head less than a week and 15,000 head less than a year ago. The CME Lean Hog Index for Sept. 5: down $0.55, $86.01.

FRIDAY'S HOG CALL: Lower. Given that packers aren't showing much interest in the cash market after having bought somewhat aggressively on Wednesday, it's likely that the market will see little interest on Friday.

Thursday Midday Livestock Market Summary - Cattle Charge Onward

GENERAL COMMENTS:

The livestock complex is trading higher into Thursday's afternoon as traders see opportunities amid steady corn prices. Still no cash cattle trade has developed and, at this point, it's looking like trade could develop on Friday potentially. December corn is up 1 cent per bushel and December soybean meal is down $2.30. The Dow Jones Industrial Average is up 106.03 points.

LIVE CATTLE:

The live cattle complex is continuing to etch higher, rallying off the strong move made Wednesday afternoon. The cash cattle market has yet to see any substantial trade develop and given the added support of the live cattle market's strength, feedlots could be emboldened to hold out for fully steady prices. Asking prices in the South remain firm at $180-plus but are still not established in the North. Given how quiet the market is at this point, it's seeming like trade could wait to develop until Friday unless packers show better interest and offer up steady bids from the get-go. October live cattle are up $0.72 at $183.42, December live cattle are up $0.65 at $187.15 and February live cattle are up $0.70 at $191.07.

Boxed beef prices are lower: choice down $2.65 ($310.92) and select down $1.13 ($286.48) with a movement of 108 loads (63.83 loads of choice, 22.70 loads of select, 2.91 loads of trim and 18.09 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts aren't messing around Thursday as some of the nearby contracts break to new contract highs given the continued supportive nature of the markets with higher trends continuing to be seen in the live cattle complex and steady tones throughout the corn sector. September feeders are up $2.20 at $255.35, October feeders are up $2.15 at $258.60 and November feeders are up $1.70 at $259.90. So long as this relationship continues (supportive live cattle market, steady corn prices), the feeder cattle complex should have absolutely no issue maintaining these levels. And if the cash cattle market sees steady to somewhat higher trade, then a bold move may even be in the works.

LEAN HOGS:

After closing lower Wednesday afternoon, the lean hog complex is back to trading modestly higher as traders aren't in immediate danger of coming up against resistance pressure. It's not likely that the move will grow much more bullish as fundamentally the market isn't seeing the support it needs in Thursday's trade with only 175 hogs having been traded in the cash market this morning and pork cutout values lower. October lean hogs are up $1.07 at $83.00, December lean hogs are up $1.12 at $75.57 and February lean hogs are up $0.82 at $79.30.

The projected lean hog index for Sept. 6 is up $0.18 at $86.19, and the actual index for Sept. 5 is down $0.55 at $86.01. Pork cutouts total 196.48 loads with 164.85 loads of pork cuts and 31.63 loads of trim. Pork cutout values: down $0.16, $98.17. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality. However, we can see that only 175 head have traded and that the market's five-day rolling average now sits at $79.75.

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Thursday Morning Livestock Market Update - Cash Trade Expected

GENERAL COMMENTS:

Traders felt enough is enough and decided to buy aggressively on the expectation cash might trade higher this week. Packers are purchasing for a full slaughter week next week and it is already Thursday. Some light trading took place Wednesday in Kansas at $179 and higher than last week. Nebraska had some dressed sales averaging $287.75. There was not enough to get an indication of prices for the week. October live cattle closed at the highest level since Aug. 4 and could potentially test the highs if cash and boxed beef provide the support. However, that was lacking Wednesday as choice declined $1.91 and select declined $1.93. It will be important for further cash sales to take place higher this week or futures will fall back.

Hogs struggled with more of the pressure on the October contract. Cash was higher with the National Direct Afternoon report showing a gain of $0.94, but that was not enough to stem the selling. If the recent pattern holds, October might trade higher Thursday, reversing some of the losses as that has been a pattern recently. It will depend what traders will focus on today. Cutouts were lower Wednesday, posting a decline of $0.54. Packers need more hogs to round out the week of purchases, which may result in higher cash. African swine fever has been discovered in Sweden for the first time ever. It was discovered in a dead wild boar with personnel scrambling to determine how it was spread. Saturday slaughter is expected at 344,000 head as packers want to make up for being dark on Monday. That is the highest Saturday slaughter I recall seeing.

	BULL SIDE		BEAR SIDE
1)	The gains Wednesday in cattle futures could move nearby months back to contract highs again as traders remain confident prices will hold.	1)	If the rally of cattle futures is not supported by cash, the market will come back down again. Feedlots may want to sell rather than hold cattle over another week.
2)	April and later live cattle futures established new contract highs Wednesday as there is growing optimism over demand. Cattle numbers will remain tight throughout next year.	2)	Even though cattle numbers are expected to remain tight for some time, higher beef prices may reduce demand if inflation concerns increase.
3)	Packers will need more hogs and it is already Thursday. They should remain aggressive in the cash market.	3)	Hogs have not been able to find consistent positive fundamentals to provide support under the market.
4)	A high volume of slaughter slated for Saturday is needed to satisfy demand. This will keep hogs from backing up in the country.	4)	The erratic nature of the market leaves traders scalping with short-term trading rather than taking long-term positions. This keeps the market choppy

Wednesday Closing Livestock Market Update - Cattle Charge

GENERAL COMMENTS:

The cattle contracts climbed higher through Wednesday's end as the market's underlying bullish tone charged traders into action and helped them push the contracts substantially higher. The lean hog complex didn't see the same type of energy throughout it's market as traders long to see more consistent fundamental support. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.94 with a weighted average price of $79.13 on 7,496 head. December corn is down 1/4 cent per bushel and December soybean meal is up $1.60. The Dow Jones Industrial Average is down 198.78 points.

LIVE CATTLE:

The live cattle complex took Wednesday by storm and surpassed last week's high. Traders boldly moved the nearby contracts $2.00 higher, while the rest of the market closed mostly $1.00 higher. Come Thursday, traders will be pressured to either support Wednesday's bullish move or to back off and let the contracts drift lower again. October live cattle closed $2.75 higher at $182.70, December live cattle closed $2.35 higher at $186.50 and February live cattle closed $1.90 higher at $190.37. There was a little big of cash cattle trade in the North at $288, but largely the market is still waiting to trade. Asking prices in the South remain firm at $180 plus and are still elusive in the North. 

Wednesday's slaughter is estimated at 126,000 head, 1,000 head less than a week ago and 4,000 head less than a year ago.

Boxed beef prices closed lower: choice down $1.91 ($313.57) and select down $1.93 ($287.61) with a movement of 152 loads (70.51 loads of choice, 28.41 loads of select, 30.74 loads of trim and 22.36 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. This week's market will again be a battle of the minds between packers and feedlots wanting different outcomes in the cash complex.

FEEDER CATTLE:

The feeder cattle complex kept with its rallying nature through Wednesday's end as the market applauded the mostly steady close in the corn complex and was elated to see the stronger close in the live cattle contracts. September feeders closed $1.77 higher at $253.15, October feeders closed $2.17 higher at $256.47 and November feeders closed $2.00 higher at $258.20. So long as feeders continues to see support from the live cattle/cash cattle markets, the market could elect to pressure resistance later this week. A OKC West Livestock Auction in El Reno, Oklahoma, compared to last week feeder, steers sold mostly steady to $1.00 higher with the exception of the cattle over 900 pounds selling $1.00 to $3.00 lower. Feeder heifers traded fully steady. Steer and heifer calves that were weaned sold $2.00 to $3.00 lower. The bulk of this week's offering was unweaned or short weaned bawling calves. Feeder cattle supply over 600 pounds was 74%. The CME Feeder Cattle Index for Sept. 5: down $0.32, $247.49.

LEAN HOGS:

The lean hog complex wasn't as vigorous throughout Wednesday's market as the cattle contracts were, even though the market saw moderate support fundamentally. Traders were aggressive last week in rallying the contracts, but now as they evaluate the futures complex, seeing stable and consistent fundamental support is essential if they're going to maintain these technical levels. The belly wasn't to blame in Wednesday afternoon's weaker cutout close, as it was the picnic (down $6.82) and the rib (down $2.12), which saw the biggest losses day over day. The cash market did see packers buy close to 7,500 head which is noteworthy given little they've supported the market as of late. October lean hogs closed $1.30 lower at $81.87, December lean hogs closed $0.62 lower at $74.45 and February lean hogs closed $0.37 lower at $78.47. Pork cutouts totaled 284.92 loads with 237.07 loads of pork cuts and 47.85 loads of trim. Pork cutout values: down $0.54, $98.33. Wednesday's slaughter is estimated at 480,000 head - 7,000 head more than a week ago and 7,000 head less than a year ago. Tuesday's slaughter was also revised to 470,000 head. The CME Lean Hog Index for Sept. 4: down $1.21, $86.56.

THURSDAY'S HOG CALL: Steady to somewhat higher. Packers did show the cash market fairly good interest throughout the day, but it's likely that they still need more hogs which could either keep prices steady on Thursday or push them slightly higher.