Wednesday Closing Livestock Market Summary - Pressure Developed Across All Livestock Futures at Midweek

GENERAL COMMENTS

Light cash trade developed in the North on live and dressed basis with prices generally $3 to $4 per cwt lower than last week. Trade in eastern Nebraska through the afternoon was at $171 to $172 per cwt, while live cattle sold in the western part of the state and South Dakota at $107 per cwt. The rest of the country remained quiet. Asking prices are $112 to $113 live basis and $178 and higher dressed basis. The Fed Cattle Exchange Auction report Wednesday listed a total of 1,067 head, with 0 actually sold, 731 head listed as unsold, and 336 listed as PO. The state by state breakdown: Kansas 271 total head, with 0 head sold, 141 head unsold, 130 head listed as PO ($107.25); Nebraska no cattle offered this week; Texas 427 total head, with 0 head sold, 221 head unsold, and 206 head listed as PO ($107.00); Colorado 176 total head, with 0 head sold, 176 head unsold, and 0 head listed as PO; Iowa 193 total head, with 0 head sold, 193 head unsold, and 0 head listed as PO; other states no cattle offered this week. According to the closing report, the national hog base is $1.40 lower compared with the Prior Day settlement ($66.00-$71.00) weighted average $69.19. The corn futures moved lower in light activity. September futures were 4 cents lower Wednesday. The Dow Jones Index is 87 points lower with the Nasdaq down 19 points.

LIVE CATTLE

Firm pressure redeveloped in live cattle futures as lack of additional direction weighed on the midweek session ($0.65 to $1.55 lower). Traders quickly started to back away from Tuesday's firm buyer support as the focus on potential supply growth took a significant toll on the market Wednesday. The expectation for additional softness in cash and meat values over the fall months is having an impact on futures trade and is being realized in both nearby and deferred futures contracts. Beef cut-outs: lower, $1.42 lower (select, $189.47) to down $0.70 (choice, $192.33) with light to moderate demand and heavy offerings (103 loads of choice cuts, 35 loads of select cuts, 1 loads of trimmings, 20 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

$2 to $4 lower. The light trade seen in the North Wednesday afternoon at $3 to $4 per cwt may be enough put the writing on the wall and set the tone of the market for the week. Even though the lion's share of trade still needs to occur, the fact that no sales developed on the Fed Cattle Exchange once again could allow prices to move lower within the range seen Wednesday afternoon.

FEEDER CATTLE

Nearby feeder cattle futures traded lower in a narrow range, while firm pressure redeveloped in deferred futures ($0.15 to $1.20 lower). Sharp, triple-digit gains seen Tuesday seemed to have very limited impact on traders in Wednesday's session, but overall market softness was limited to deferred contracts as traders are looking for increased stability in the nearby contracts. CME cash feeder index: 8/22: $143.38, down $0.05.

LEAN HOGS

Lean hog futures turned lower, but backed away from strong market pressure at closing bell ($0.15 to $0.50 lower). The overall lack of volume during the last two thirds of the trading session created some market calmness and pulled futures away from triple-digit losses. Even though the overall tone of the market remains weak and traders are looking at technical and fundamental market softness through the end of the week, the potential for market stability is starting to develop. With October and December contracts both closing above session lows, the focus now will be on whether buyer support can redevelop early Thursday morning, and spark enough underlying support to sustain gains in the market over the next couple of trading sessions. Carcass values posted moderate to firm losses with all but loin primals posting losses Wednesday. Belly markets, which posted a double-digit loss Tuesday, led the market lower once again during the Wednesday session, falling $6.31 per cwt. Pork cut-out: $87.93 down $1.21. CME cash lean index for 8/21: $81.53, down 0.82. DTN Projected lean index for 8/22 $80.49, down $1.04.

THURSDAY'S CASH HOG CALL:

Steady to $1.50 lower. Additional pressure is expected in the cash hog complex Thursday with traders focusing on even more weakness in pork values and eroding futures trade. This is giving packers even more ammunition to lower bids through the end of the week as supplies continue to remain plentiful. Thursday plant runs are set at 440,000 head with Saturday numbers pegged at 144,000 head.