Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
CATTLE COMPLEX
USDA raised beef production for the 2024 and 2025
Strong gains were seen across the cattle complex yesterday. The USDA supply/demand report increased the 2024 beef production estimate by 59 million pounds to 26.765 billion on heavier cattle weights and higher cow slaughter in the 2nd half of this year. Estimated beef production for 2025 was increased 180 million pounds to 25.625 billion on higher steer heifer slaughter and heavier carcass weights. Beef exports for 2024 and 2025 were raised on continued expected strength in global beef demand. Cattle prices are forecast lower for the 2nd half of 2024 and that is expected to carry into 2025.The latest USDA steer carcass weights were 933 pounds, up 2 pounds from last week and up 25 pounds above year ago. Yesterday, 90% lean beef was significantly lower and is expected to continue to trend down. Cash cattle trade yesterday was reported at $180 in the north and $181 in the South and mostly steady with last week. With the futures rally yesterday, cash trade felt a little disappointing, but the market closed strong anyway. The 5-area, 5-day weighted average for the week is now 180.85, down from 181.27 last week. The USDA estimated cattle slaughter came in at 123,000 head Thursday. This brings the total for the week so far to 485,000 head, up from 376,000 last week at this time but down from 501,140 a year ago. The USDA boxed beef cutout was up 44 cents at mid-session Thursday and closed 18 cents lower at $307.18. This was down from $311.51 the previous week. US beef export sales for the week ending September 5 came in at 11,400 tonnes compared with the average of the previous four weeks of 19,500 tonnes. Cumulative sales for the 11.4 have reached 683,500 tonnes, up 2.8% versus last year’s pace.
PORK COMPLEX
USDA raised 2024 pork production but 2025 lower
December hogs pulled back slightly yesterday, and volatility was low. December remains just above the 20-day moving average which has offered support all week. USDA made only a few changes to the US supply demand balance sheets and increased 2024 pork production for the 4th quarter by 5%, the largest increase in 9 years. Estimated pork production for 2025 was lowered by 45 million pounds to 28.505 billion on slower than expected growth in carcass weights. Hog prices are forecast unchanged for 2024, but lower in the 1st half of 2025 due to stronger expected competition from poultry. Pork export sales were solid once again this week and good demand has been one of the reasons for the price rally recently. The CME Lean Hog Index as of September 10 was 85.46 down from 85.56 the previous session and from 86.27 the previous week. The USDA estimated hog slaughter came in at 483,000 head Thursday. This brings the total for the week so far to 1.936 million head, up from 1.450 million last week at this time and up from 1.908 million a year ago. The USDA pork cutout, released after the close Thursday, came in at $92.76, up $1.52 from Wednesday but down from $94.13 the previous week. US pork export sales for the week ending September 5 came in at 29,700 tonnes compared with the average of the previous four weeks of 26,000 tonnes. Cumulative sales for the 2024 marketing year have reached 1,374,800 tonnes, down 1.7% versus last year’s pace. Pork cutout at midsession was up 1.97 at 94.88.
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