Wednesday Closing Livestock Market Summary - Early Cattle Market Support Evaporates in Late Day Trade

GENERAL COMMENTS

Cash cattle trade is undeveloped in feedlot country Wednesday, although bids have been evident through much of the day. Bids have redeveloped in both the south with live bids seen at $106 per cwt in several areas, while dressed bids in Nebraska are seen at $168 per cwt. Asking prices are not fully defined, but remain around $110 to $112 live basis and $174 and higher dressed basis. Activity on the morning trade of the Fed Cattle Exchange Auction posted a total of 1,732 head, the FCE has sold 705 steers and heifers: 1-9 Day Delivery: 1,109 head total, 705 head sold, weighted average price $ 108.01; 1-17 Day Delivery: 501 head total, 79 head sold, weighted average price $ 108.00; 17-30 Day Delivery: 122 head total, no sales. According to the closing report, the national hog base is $1.30 higher compared with the Prior Day settlement ($46.00-$52.75) weighted average $50.97. The corn futures moved lower in light activity. December futures were 1 cent lower Tuesday. The Dow Jones Index is 25 points higher with the Nasdaq up 2 points.

LIVE CATTLE

Following the firm pullback in feeder cattle trade during the last hour of market trading activity, live cattle futures closed mixed in a moderate range ($0.30 Lower to $0.40 Higher). There was very little long term direction in the market seen, as well as no sense of change in fundamental or technical factors during the Wednesday session. This could allow live cattle markets to shift in moderate patterns over the next several weeks as traders continue to focus on recent price patterns. Beef cut-outs: mixed, $0.53 higher (select, $189.55) and down $0.46 (choice, $197.41) with light demand and moderate offerings (48 loads of choice cuts, 23 loads of select cuts, 16 loads of trimmings, 32 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady $2 Higher. The early week movement across the live cattle futures is setting up expectations of higher cash cattle trade by the end of the week. But at this point, bids and asking prices remain generally undeveloped. This is likely to push trade into the last half of the week, focusing on several market factors over the next couple of days. 

FEEDER CATTLE:

Early gains which held through most of the session quickly eroded at closing bell ($0.32 to $1.17 Lower). Buyer support quickly ran out of gas following the midday trade activity as markets posted a wide market swing midweek, although very little additional fundamental or technical market direction developed during the session. The recent pullback in feeder cattle and live cattle markets is not expected to be seen as a significant market shift, with traders looking at the late day pressure as a market correction due partially to light volume. CME cash feeder index is unreported at this time.

LEAN HOGS:

Futures trade had a hard time finding a sense of direction Wednesday following aggressive buyer support that stepped into the market earlier in the week. Prices closed mixed ($0.17 Lower to $0.90 Higher) following choppy price shifts as traders slowly but steadily stepped in and out of the complex over the midweek session as the higher cash market support was not enough to draw active buyer support back into the complex. Firm gains redeveloped in October contracts, while other nearby contracts posted narrow losses through the end of the session. Carcass values posted moderate to firm gains Wednesday as a wide range of price shifts developed between pork primal cuts. Moderate to strong pressure was seen in Loin, Butt, Rib and Belly markets. The firm triple digit gains developing in Picnic and Ham cuts overshadowed any market pressure in the other meat cuts. Pork cut-out: $72.88 up $0.42. CME cash lean index for 10/2: $54.39, up $0.10. DTN Projected lean index for 10/3 $54.97 up $0.58.

THURSDAY'S CASH HOG CALL:

$1 to $2 higher. Total weekly hog procurement is expected to be around 2.53 million head following aggressive plant chain speed and the ability to continue to gain access to market ready hogs. Cash prices are expected to continue to see market support with most bids expected to be $1 per cwt higher early Thursday morning. Thursday's slaughter is expected at 460,000 head with Saturday procurement likely to hit 240,000 head.