Tuesday Closing Livestock Market Summary - Live Cattle Futures Stabilize in Late-Day Trade

GENERAL COMMENTS

Cash cattle trade interest remains generally undeveloped with bids and asking prices still hard to pin down through cattle country. The overall lack of interest by packers may push active trade off until late in the week. There is a report that some cattle in the South are priced at $121 per cwt. Both asking prices and bids are expected to become more evident through the day Wednesday. According to the closing report, the national hog base is $1.30 higher compared with the Prior Day settlement ($50-$60) weighted average $57.92. The corn futures moved lower in light activity. December futures were 2 1/2 cents lower Tuesday. The Dow Jones Index is 255 points higher with the Nasdaq up 33 points.

LIVE CATTLE

Even though cattle futures closed lower, late-day buying helped to offset initial triple-digit losses as the market ended with slight-to-moderate pressure ($0.02 to $0.45 Lower). Position-squaring early in the session as traders tried to adjust positions following the early week gains helped to push prices sharply lower through most of the session. But overall lack of volume in the complex in the waning minutes of trade allowed prices to partially recover. Front-month December contracts moved nearly $1 per cwt above session lows and closed just 17 cents per cwt lower at $119.65 per cwt. Beef cut-outs: lower, $0.08 lower (select, $187.20) and down $0.94 (choice, $208.63) with light-to-moderate demand and moderate to heavy offerings (86 loads of choice cuts, 45 loads of select cuts, 9 loads of trimmings, 28 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady to $2 higher. Trade interest remains sluggish going into midweek. With bids and asking prices generally hard to fully pin down, it is expected to be the tail end of the week before active trade develops. Packer interest will likely pick up Wednesday morning as the Fed Cattle Exchange Auction may also give more definition to trade direction through the morning Wednesday.

FEEDER CATTLE:

Light buying support trickled into the feeder cattle complex at the end of the session despite pressure through most of the day ($0.05 to $0.40 higher). Pressure in live cattle futures through most of the session left feeder cattle traders trying to catch up and look for additional market support while buyers seemed to be willing to stand on the sidelines focusing on a market pullback from Monday's gains. But late-day support stepped into all feeder cattle futures just before closing bell. Even though light pressure continues to develop in live cattle trade, the focus on firmness in feeder cattle markets is still the main support through the complex. CME cash feeder index for 11/27 is $156.75 up $1.49.

LEAN HOGS:

Moderate-to-strong buyer support returned to the market as buyers quickly focus on firming market tones ($0.10 to $1.42 higher). Triple-digit gains held in nearby contracts, which is helping to spark additional buyer support through the week as front-month futures have posted a $3-per-cwt rally over the last couple of weeks based on renewed commercial support quickly moving back into the market. This is not only adding support to futures markets, but also helping to stimulate buying in the cash hog and pork complex through the end of November. Carcass values shifted lower as all primals moved lower except for ribs and bellies, which posted gains over $2 per cwt. The sharp losses in picnics led the entire complex lower. Pork cut-out: $82.23 down $0.35. CME cash lean index for 11/24 $63.08, down $0.58. DTN Projected lean index for 11/27 $62.89 down $0.19.

WEDNESDAY'S CASH HOG CALL:

Mixed. Very little additional market direction is expected to be seen across the complex as packers seem to be able to easily find market-ready hogs to fill procurement schedules. The expectation that increased overall processing speeds will develop over the coming weeks is being countered by uncertainty of pushing the system even harder given the current hogs going through on a weekly basis. Wednesday's slaughter is expected at 465,000 head with an expected Saturday run at 251,000 head.