Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LEAN HOGS
Lean Hog trading is mostly spread trading. October lean hogs are the long leg of hog spreads and long legs of cattle/hog spreads. Hog slaughter is increasing, cash hog prices and pork prices are steadily going down. Pork imports are above a year ago. Add to it that beef prices are trending down. The outlook for better hog prices are not good.
LIVE CATTLE
Steer and heifer carcasses compared to a year ago are up 31.5 pounds. Carcasses are grading 83.15% compared to a year ago at 79.6%. If packers needed beef or more cattle, they could increase kill. But with beef prices going down, it isn’t likely they will want to add cattle. However, with increasing placements, packers will need to increase slaughter. On the other hand, cheaper feed will encourage feedlots to hold cattle adding weight. Cooler temperatures will increase feed efficiency with weights increasing. Into the 4th quarter look for increasing weight along with more cattle.
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