Consumer Demand Remains a worry

MORNING LIVESTOCK FUTURES OUTLOOK

LIVE CATTLE

December live cattle took it on the chin Friday with a very weak close, which may have been partly sparked by the poor jobs report Friday morning. Consumer demand remains a worry and losses were larger in feeder cattle than fats on Friday, due to the recent rally in grain prices. The technical picture remains weak and we look for selling on rallies to continue to pressure the market. Cash trade was

$2-$3 weaker last week with mostly $181 trade in the South on Friday and $180-183 in the north. The 5-day, 5-area weighted average for the week ended at 181.25, down from 183.57 the previous week. U.S. beef export sales for the week ending August 29 came in at 16,500 tonnes compared with the average of the previous four weeks of 17,800 tonnes. Cumulative sales for the 16.5 have reached 672,100 tonnes, up 2.4% versus last year’s pace. The estimated average dressed cattle weight for the week ending September 7 is 851 pounds, up from 849 the previous week and up from 828 a year ago. The 5-year average weight for that week is 827 pounds. Estimated beef production last week was 460.6 million pounds, down from 461.8 million a year ago. The USDA estimated cattle slaughter came in at 123,000 head Friday and 43,000 head for Saturday. This brought the total for last week to 542,000 head, down from 611,000 the previous week and down from 558,921 a year ago. The USDA boxed beef cutout was down $1.92 at mid-session Friday and closed $2.10 lower at $309.41. This was up from $308.66 the previous week.

Cattle positioning in the Commitments of Traders for the week ending September 3rd showed Managed Money traders are net long 38,058 contracts after net buying 44 contracts. CIT traders net sold 105 contracts and are now net long 86,551 contracts. Non-Commercial No CIT traders were net long 18,715 contracts after decreasing their long position by 1,247 contracts. Non-Commercial & Non-Reportable traders are net long 39,227 contracts after net selling 2,486 contracts.

LEAN HOGS

December hogs closed weak Friday after the downside reversal midweek and closed back below the 100-day moving average. Foreign meat buyers are finding US pork prices attractive but strong pork production and higher carcass weights are weighing on the futures. Weekly pork export sales pulled back after a couple of very strong weeks in a row. The pullback may continue to 1st retracement support at 70.10 and possibly the 50% retracement at 68.80.

U.S. pork export sales for the week ending August 29 came in at 20,800 tonnes compared with the average of the previous four weeks of 29,500 tonnes. Cumulative sales for the 2024 marketing year have reached 1,345,100 tonnes, down 1.8% versus last year’s pace. Estimated US pork production for the week ending September 7 is 488.9 million pounds, down from 509.7 the previous week and up from 466.2 a year ago. The CME Lean Hog Index as of September 4 was 86.43 up from 86.27 the previous session but down from 87.45 the previous week. The USDA estimated hog slaughter came in at 482,000 head Friday and 295,000 head for Saturday. This brought the total for last week to 2.327 million head, down from 2.429 million the previous week but up from 2.245 million a year ago. The USDA pork cutout, released after the close Friday, came in at $94.72, up 59 cents from Thursday but down from $95.32 the previous week.

The September 3rd Commitments of Traders report showed Hogs Managed Money traders are net long 39,060 contracts after net buying 10,399 contracts. CIT traders were net long 104,973 contracts after increasing their already long position by 3,681 contracts. Non-Commercial No CIT traders net bought 6,267 contracts and are now net short 7,143 contracts. Non-Commercial & Non-Reportable traders are net long 32,925 contracts after net buying 6,586 contracts.

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