Wednesday Closing Livestock Market Summary - Cattle Futures Mixed Midweek in Sluggish Trade

GENERAL COMMENTS

Cash cattle markets remain generally quiet midweek with just a few bids developing late Wednesday at $108 through the South and $172 in the North. Asking prices are seen at $113 and higher in the South at this point. Although asking prices in the North are still hard to define, it is expected that prices are at $175 and higher. It is likely that active trade will be delayed until sometime Thursday or Friday, with late week trade not out of the question. The Fed Cattle Exchange Auction report Wednesday listed a total of 1,444 head, with 0 actually sold, 526 head listed as unsold, and 918 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 916 total head, with 0 head sold, 236 head unsold, 680 head listed as PO ($110.00-110.50); NE 124 total head, with 0 head sold, 124 head unsold; TX 404 total head, with 0 head sold, 166 head unsold, and 238 head listed as PO ($110.75); CO no cattle reported; IA no cattle reported; other states no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 845 head total, 0 head sold; 1-17 day delivery 422 head total, 0 head sold; 10-17 day delivery no cattle reported; 17-30 day delivery 124 head total, 0 head sold. According to the closing report, the national hog base is $0.82 higher compared with the Prior Day settlement ($50.00-$57.25) weighted average $55.82. The corn futures moved lower in light activity. December futures were 3-cent lower Wednesday. The Dow Jones Index is 22 points higher with the Nasdaq up 8 points.

LIVE CATTLE

Live cattle futures pulled back from the aggressive gains Tuesday as lackluster activity was seen through the complex. Mixed trade in a very narrow range developed ($0.27 lower to $0.22 Higher) through the end of the session based on the general lack of direction midweek and limited fundamental inactivity. What started out to be typical position taking activity through the complex, seemed to turn into a mixed up sloppy mess of price movement within a very narrow trading range. This overall lack of direction essentially kept the trading ranges, which developed Tuesday, but without drawing any additional major market attention back into the complex. It is uncertain just how much additional momentum will be seen through the rest of the week, or if traders will see further reactions over the near future to outside market shifts Thursday morning. Beef cut-outs: lower, $1.26 higher (select, $188.76) and down $1.08 (choice, $196.32) with moderate demand and moderate offerings (90 loads of choice cuts, 43 loads of select cuts, 19 loads of trimmings, 32 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 Higher. A few token bids have developed early Wednesday, although at this point nothing has been secured in the cash markets. No sales developed on the Fed Cattle exchange Auction once again leaving no indication of cash markets to leave feeders to go by midweek. It is likely to be the end of the week before active trade develops, although packer interest is expected to firm through the day Thursday.

FEEDER CATTLE:

Feeder cattle futures traded mostly lower through most of the session, although prices eased slightly at the end of the session ($0.47 lower to $0.07 higher). Lack of support in live cattle futures through midweek and lackluster volume across the entire cattle complex left most traders on the sidelines through the session. This allowed traders to hold losses of 20 to 50 cents per cwt during most of the session although front month October contracts gained light buyer support in the last hour of trade, moving to single-digit gains at closing bell. The ability to hold spot markets higher does nothing significant for the complex, but does help to contain the entire complex in a narrow trading range. It is expected that early trade Thursday will return to sluggish market activity with very little movement seen through the complex. CME cash feeder index for 10/10 is $155.22 up $0.05.

LEAN HOGS:

Traders spent another day with lean hog futures focusing on wide trading ranges. Mixed price direction developed as nearby gains offset deferred losses ($0.40 lower to $1.07 higher). The ability to bring active commercial buyers back to all nearby contracts as traders focused on higher cash trade activity midweek, as well as the potential for increased support in pork values early in the day, helped to push October and December contracts move nearly $1 per cwt higher through early trade. The initial support was unable to erode through the end of the session. Prices in October futures moved above $61 per cwt for the first time since early September, creating additional underlying support. Carcass values slipped slightly lower due to pressure in most primal cuts. Triple-digit losses in most markets were offset by strong triple-digit gains in ham and belly markets. Pork cut-out: $73.67 down $0.04. CME cash lean index for 10/9: $57.11, up $0.69. DTN Projected lean index for 10/10 $58.32 up $1.21.

THURSDAY'S CASH HOG CALL:

Steady to $1 higher. With additional firmness expected to be seen in packer spending through the rest of the week, as well as procurement levels likely to remain at 460,000 head during the rest of the workweek, little uncertainty is expected to develop at this point. Hog supplies continue to be readily available to packers although the firmness in futures trade and support in pork values will likely help to support cash markets. Thursday's slaughter is expected at 460,000 head with Saturday runs likely near 201,000 head.