GENERAL COMMENTS
Cash cattle markets remain generally sluggish midweek with no feedlot sales developing at this point. However, a few scattered token bids have started to develop in the North through the middle of the day. Bids in Nebraska are seen at $183 to $184 dressed basis, although given the support of futures trade it is unlikely that feedlot managers are willing to settle at this point. Asking prices are still hard to pin down in most areas but likely to be seen around $125 and higher live basis and $185 and higher dressed. It will likely be Thursday or Friday before cash business is actively traded. The Fed Cattle Exchange Auction report Wednesday listed a total of 1,515 head, with 274 actually sold, 913 head listed as unsold, and 328 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 1,081 total head, with 0 head sold, 913 head unsold, 168 head listed as PO ($119.50); NE no cattle reported; TX 434 total head, with 274 head sold at $120.00, 0 head unsold, and 160 head listed as PO ($120.25); 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: 1,515 head total, 274 head sold, with a weighted average price of $120.00. According to the closing report, the national hog base is $0.42 lower compared with the Prior Day settlement ($57.50-$64.75) weighted average $63.86. The corn futures moved higher in light activity. December futures were 2 cents higher Wednesday. The Dow Jones Index is 48 points higher with the Nasdaq down 15 points.
LIVE CATTLE
Moderate to firm gains redeveloped in live cattle futures, based on follow through support ($0.32 to $0.97 Higher). December contracts took over as spot contracts during the first day of November, moving contracts to contract highs of $126.60 per cwt after a 97 cent per cwt rally. This latest move pushed February contracts move to $130 per cwt even though prices have pulled away from earlier gains as the end of the session. But the ability to still hold aggressive market support at the increased price level is sparking widespread interest through the complex. Beef cut-outs: mixed, $0.19 lower (select, $193.71) and up $0.95 (choice, $207.39) with moderate to good demand and moderate to heavy offerings (82 loads of choice cuts, 40 loads of select cuts, no loads of trimmings, 17 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 Higher. Cash cattle trade remains developed in feedlot markets although a few bids have developed. It is expected that packer interest is likely to become more active early Thursday although asking prices will become much more defined as the week goes by. The more aggressive futures trade, the more focused on higher prices feedlot managers will stick to higher asking prices. This may push trade to Thursday and potentially late Friday once again.
FEEDER CATTLE:
Follow through gains set new contract highs once again across the feeder cattle market as firm buyer support was seen through the first trading session of November ($0.27 to $1.10 Higher). The lightly traded November contracts posted limited gains through the trading session, although strong buyer support stepped back into the complex with prices surging $1 to $1.10 per cwt higher even though trade remained moderate through most of the session. The underlying support by commercial traders helped to draw buyers back into the market with January futures moved above $160 per cwt. CME cash feeder index for 10/31 is $157.34 up $0.42.
LEAN HOGS:
Lean hog futures ended mixed in a wide range ($1.40 lower to $1.25 Higher) with strong early month pressure quickly developing in nearby December and January futures. The rest of the complex posted moderate to strong support in deferred contract months with summer contracts once again surging to new contract highs. This pressure created a sense of a hangover effect in both December and February contracts which was made more prevalent by light trade through most of the trading session. December futures posted a $1.40 per cwt loss, closing at $66.60 per cwt while all contracts past April 2018 posted strong market support. Carcass values shifted lower Wednesday following pressure in all primal cuts except belly cuts. Pork cut-out: $78.03 down $0.51. CME cash lean index for 10/30: $69.08, down $0.01. DTN Projected lean index for 10/31 $69.30 up $0.22.
THURSDAY'S CASH HOG CALL:
Steady to $1 Lower. Little is changing in the overall cash hog markets with packers able to easily gain access to needed access of hogs with steady to lower money even when futures continue to set strong upward market tones. Weekly slaughter is expected to be near 2.49 million head for the week, down slightly from the last couple of weeks, but not out of line with overall processing levels. Thursday's slaughter is expected at 465,000 head with an expected Saturday run at 165,000 head.
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