Thursday Closing Livestock Market Summary - Lean Hog Futures Resume Early Fall Meltdown

GENERAL COMMENTS

Although a few Northern cattle buyers left some bids of the table (e.g., $104/$165-$168) here and there, for the most part, feedlot country remained as a closed library. Some asking prices were reported at $110 in the South and $172-$174 in the North. According to the closing report, the national hog base is $1.12 lower ($45-$51.50, weighted average $49.09). Corn futures closed fractionally higher at the conclusion of a boring and featureless session. The stock market closed lower with the Dow off 53 points and the Nasdaq down by 33.

LIVE CATTLE

Live futures settled on a mixed basis with prices ranging from 40 higher to 85 lower. But clearly the damages could have been worse. Selling tied to profit-taking and long liquidation seemed more determined and consistent through midsession. But short-covering and technical-buying late worked to lift most issues well off session lows. Beef cut-outs: moderately lower, off $0.11 (select, $188.41) to $0.53 (choice, $191.41) with light-to-moderate demand and moderate offerings (91 loads of choice cuts, 23 loads of select cuts, 11 loads of trimmings, 14 loads of ground beef).

FRIDAY'S CASH CATTLE CALL:

Steady to $2 higher. Friday will mark the third consecutive Friday showdown. Indeed, with the On Feed report not scheduled for release until 2 p.m. CDT, the development of cash volume could be especially late.

FEEDER CATTLE:

Feeder contracts closed mostly lower with settlements ranging from 10 higher to 140 lower. Besides long specs moving to take profits won earlier in the week, front-end selling was also prompted by the discount of the cash index. Like their live counterparts, many contracts did manage to rally significantly off session lows by the close. CME cash feeder index: 09/20: $151.11, up $0.65.

LEAN HOGS:

Spot October crashed to a new contract low, significantly pressured by the steady deterioration of fundamentals. After knocking on the door of its 40-day moving average at midweek, December fell apart Thursday to settle well below its 10-day moving average high. Overall, lean prices finished 20 to 212 lower with deferreds spared aggressive selling thanks to bear-spreading. Carcass value imploded by more than $3 Thursday as all primals retreated in the face of relentless tonnage. Pork cut-out: $73.04, off $3.28. CME cash lean index for 09/19: $60.92, off $0.96 (DTN Projected lean index for 09/20: $60.12, off $0.80).

FRIDAY'S CASH HOG CALL:

$1-$2 lower. Hog buyers are likely to remain on the defensive given the struggling nature of the wholesale market.