Tuesday Closing Livestock Market Summary - Hog Futures Led Livestock Markets Higher in Active Trade

GENERAL COMMENTS

Cash cattle markets remain quiet Tuesday afternoon with bids and asking prices still undeveloped at this point. Show lists appear to be mixed to generally larger with sharply higher numbers available in Texas and modestly higher in Nebraska. Moderately smaller numbers are reported in Kansas, Iowa and Colorado. It is expected that cattle will be priced near $107 and higher live basis and $168 to $170 dressed, although it may be midweek or later before active trade is seen in all areas. According to the closing report, the national hog base is $0.22 higher compared with the Prior Day settlement ($57.50-$64.50) weighted average $61.89.The corn futures moved higher in light activity. September futures were 4 cents higher Tuesday. The Dow Jones Index is 219 points lower with the Nasdaq down 58 points.

LIVE CATTLE

Trade through the live cattle complex chopped around in a moderate range with wavering direction Tuesday as traders seemed conflicted as to which market to follow throughout the day and how aggressive to step into the market ($0.72 Lower to $0.25 Higher). Early pressure quickly developed in live cattle futures as trades took a cautionary tone following the holiday weekend as they focused on potential beef movement direction over the holiday weekend. But outside market support helped to quickly draw support back into the market and brought many traders in from the sidelines. This buyer activity seemed to be active, but short lived, as front month October futures quickly turned the attention back to the eroding feeder cattle markets while other nearby contracts still were able to maintain gains at closing bell. Traders are expected to focus on outside market direction early Wednesday morning as they try to balance nearby and deferred contract direction. Beef cut-outs: mixed, $0.18 lower (select, $190.47) to up $1.10 (choice, $192.45) with light to moderate demand and light offerings (74 loads of choice cuts, 30 loads of select cuts, 17 loads of trimmings, 20 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 Lower. Cash markets remain undeveloped Tuesday as bids and asking prices remain quiet due to the holiday weekend causing packers and feeders getting a delayed start to the week. Show lists are generally larger, which is not a surprise is given the sluggish market activity last week.

FEEDER CATTLE:

Feeder cattle futures closed firmly lower ($0.20 to $1.05 Lower) Tuesday following significant back and forth market shifts which created increased market volatility through the cattle complex Tuesday. Early losses quickly developed across the complex, but the inability for follow through seller activity and the aggressive support in the grain and hog market quickly allowed for uniform buyer support to move into the cattle complex through much of the trading session. This support quickly eroded in the last hour of trade across feeder cattle futures as trades backed out of the feeder cattle market as October and November feeder cattle futures moved to a $1 per cwt loss and closed at that level. CME cash feeder index: 9/4: $145.27, up $1.00.

LEAN HOGS:

Aggressive early week buyer support flooded through lean hog trade ($0.47 to $2.30 Higher) Tuesday morning with triple digit gains quickly moving into all nearby contracts. This pushed 2017 contracts $2 per cwt higher as October contracts led the complex with a $2.30 per cwt rally, closing at $63.75 per cwt. Although prices have backed away from session highs seen during the morning, the ability to sustain such strong levels through the entire session continues to keep markets focused on renewed commercial interest during the upcoming fall months. Carcass values moved higher in all primal meat markets except Picnic cuts, which fell $1.09 per cwt. Pork cut-out: $84.96 up $0.49.CME cash lean index for 8/31: $72.39, down 1.13. DTN Projected lean index for 9/1 $71.36, down $1.03.

WEDNESDAY'S CASH HOG CALL:

Steady to $1 lower. Early market expectations are focused on firm early market activity with most bids starting out steady to weak with the full range expected steady to $1 per cwt lower. The aggressive procurement levels through the week will try to make up lost time for the short holiday week. There is expectation that additional follow through support will develop in pork trade, which may help to spur increased support through the complex later in September. Wednesday plant runs are set at 450,000 head with Saturday numbers pegged at 375,000 head.