DTN Midday Livestock Comments 09/07 11:18

DTN Midday Livestock Comments 09/07 11:18 Livestock Lower on Risk-Off Day October contracts of live cattle, feeder cattle and lean hogs are all lower at mid-morning Tuesday, pressured by last week's indications of weaker retail demand and the anticipation of more slowing after Labor Day. Outside markets are also lending bearish influence. Todd Hultman DTN Lead Analyst LIVE CATTLE October live cattle opened up $0.87 Tuesday but are now down $0.22. Weekend news that two cases of atypical mad cow disease were confirmed in Brazil added bullish interest to the open, but the buying interest may be short-lived. Brazilian beef shipments to China have been stopped, but the atypical form of mad cow is considered less dangerous and is more common in older cattle. China can decide when it will accept Brazil's beef again but has not made a statement yet. Later Tuesday, USDA will publish last week's weighted cash averages and the averages should come in around $123 to $124 live and $203 to $204 dressed. Choice boxed beef fell $8.92 last week and was down another 95 cents Tuesday morning. At $335.47, choice boxed beef is still among its highest prices since last summer's coronavirus spike. Selects were up $1.51 Tuesday and are also high at $305.64. Year-to-date cattle slaughter is running almost 4% above a year ago at this time, but levels have plateaued. Dow Jones estimated Tuesday's cattle slaughter at 119,000, down from 121,000 a week ago. Friday's Commitments of Traders report said noncommercial net longs in live cattle totaled 87,565 as of Aug. 31, vulnerable to a sell-off with retail demand expected to wane the next few months. FEEDER CATTLE: October feeders are trading down $1.85 Tuesday, even as December corn is down 10 1/2 cents. October feeders have been trading higher most of the summer and peaked at $172.55 in August. Last week's $5.95 drop turned the weekly stochastic down and caught noncommercials vulnerable on the long side of the market. Friday's CFTC data showed noncommercials net long 8,254 contracts as of Aug. 31, a moderately high amount for feeders. The CME Feeder Index was priced at $157.74 for Sept. 2, roughly $3.00 below the current price. LEAN HOGS: October lean hogs opened 40 cents higher, quickly sold off and are now trading down $0.85 Tuesday. Since peaking just short of $98.00 in June, October hog prices have corrected into a sideways range and are staying close to their 100-day average at $89.25. Here in the U.S., retail demand remains strong, but pork carcass values are down from the May peak of $133.29 and dropped another $8.44 last week. Tuesday morning showed pork carcass valued at $116.31, up $8.16 from Friday. China also remains an active customer, accounting for 2,000 mt of last week's 33,500 mt of reported pork export sales. Negotiated hog prices are $86.23 on the National Direct Morning Hog Report, down from $88.85 Friday afternoon. The national weighted average of the Swine/Pork Market Formula is $96.21, down from $98.04 Friday and this year's May high of $123.60. Year-to-date hog slaughter is down almost 2% from a year ago with fewer hogs available in 2021. Dow Jones estimated Tuesday's hog slaughter at 478,000, up from 476,000 a week ago. The CME Lean Hog Index is estimated at $100.06 for Sept. 2. Friday's CFTC data showed 74,486 noncommercial net longs in lean hogs as of Aug. 31, a large position that is potentially vulnerable to selling, but is currently supported by a lack of available hogs. Todd Hultman can be reached at todd.hultman1@dtn.com Follow him on Twitter @ToddHultman1 (c) Copyright 2021 DTN, LLC. All rights reserved.