GENERAL COMMENTS
Cash cattle trade remains quiet Tuesday with significant activity likely delayed until Wednesday or later. Bids and asking prices are not even fully established at this point, giving packers and feeders very little to work on. There is talk that regional bids have been seen in Nebraska at $172 for select cattle. But it is not likely that these bids will get much attention at this point in the week given the support in futures trade and time in the week. According to the closing report, the national hog base is $1.31 higher compared with the Prior Day settlement ($48.00-$56.00) weighted average $54.74. The corn futures moved lower in light activity. December futures were 1/4 cent lower Tuesday. The Dow Jones Index is 52 points higher with the Nasdaq up 3 points.
LIVE CATTLE
Triple-digit gains have developed in nearby live cattle futures with all contracts holding firm gains ($0.62 to $2.27 Higher). Aggressive commercial buyer support flooded into the complex Tuesday morning with traders focusing traders pushing front month futures near $114 per cwt with the potential for increased buyer support in all nearby contracts. Support in all nearby contracts has developed across the complex with traders focusing through the market based on fundamental and technical support during mid-October based on the expectation that even with growing supplies, demand for beef continues to remain strong. Beef cut-outs: mixed, $1.36 higher (select, $190.02) and down $0.73 (choice, $197.40) with light demand and moderate offerings (63 loads of choice cuts, 23 loads of select cuts, 12 loads of trimmings, 24 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 Higher. Inactivity continues to be seen as feeders and packers move through the week with bids and asking prices generally undefined. The tone of the market is expected to firm through the last half of the week, although interest may not quickly appear until sometime late Wednesday or later.
FEEDER CATTLE:
Light to moderate gains developed across the complex with traders focusing on the main support in nearby live cattle futures ($0.30 to $70 cents higher). Firming buyer activity continues to draw buyer activity back into the feeder cattle complex with traders focusing on the live cattle complex, which posted triple-digit gains in nearby contracts. The potential to move increased long-term buyer activity into the November and January contracts is helping to draw increased buyer support back into the complex, which may spark even more long-term support through the complex through the end of the month. CME cash feeder index for 10/9 is $155.17 down $0.13.
LEAN HOGS:
Lean hog futures closed mixed in a wide range ($0.20 lower to $1.15 higher). October futures led the complex higher with strong buyer support moving into the spot month market as traders moved above the $60 per cwt price level. This helped to draw traders actively into the nearby contracts following the sluggish holiday trade on Columbus Day. Firm fundamental support is redeveloping through the market with the potential for support to be seen in the cash and pork values through mid-October. Carcass values trickled higher Tuesday. Sharp triple-digit gains in Ribs were offset in light pressure in ham and belly markets. Pork cut-out: $73.71 up $0.17. CME cash lean index for 10/6: $56.42, up 0.65. DTN Projected lean index for 10/9 $57.11 up $0.69.
WEDNESDAY'S CASH HOG CALL:
Steady to $2 higher. Packers are expected to return to the market following the strong upward movement in futures trade as firm cash market support is likely to be seen once again. Even though the full range is likely to be seen steady to $2 per cwt early in the session, most bids are expected to be seen steady to $1 per cwt higher with traders focusing on potential firmness in pork values through the end of the week and outside markets firming. Wednesday's slaughter is expected at 460,000 head with Saturday runs likely near 206,000 head.
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