Wednesday Closing Livestock Market Summary - Cattle Futures Regain Support in Late Day Trade

GENERAL COMMENTS

Cash cattle trade remains undeveloped midweek in feedlot country with a few bids developing through the morning at $117-to-$118 live basis and $188 dressed. Asking prices are becoming more defined through the week with cattle priced at $121 and higher live and $192-to-$195 dressed. The Fed Cattle Exchange Auction report Wednesday listed a total of 967 head, with 0 actually sold, 750 head listed as unsold, and 217 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 223 total head, with 0 head sold, 118 head unsold, 105 head listed as PO ($118.00); NE 507 total head, with 0 head sold, 507 head unsold, and 0 head listed as PO; TX 237 total head, with 0 head sold, 125 head unsold, and 112 head listed as PO ($117.00); 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: 865 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery 102 head total, 0 head sold. According to the closing report, the national hog base is $0.73 higher compared with the Prior Day settlement ($52.00-$60.00) weighted average $58.81. The corn futures moved higher in light activity. December futures were 2 3/4 cents higher Wednesday. The Dow Jones Index is 103 points higher with the Nasdaq down 88 points.

LIVE CATTLE

Firm gains redeveloped late in the session Wednesday following a market shift, which sparked selling pressure through most of the morning ($0.07-to-$0.92 Higher). The ability for moderate-to-strong buyer activity to hold in nearby contracts pushed December futures above $120 per cwt for the first time in nearly two weeks. This could spark some additional end of the month buyer activity and may stimulate additional support through early December. Beef cut-outs: lower, $1.36 lower (select, $185.84) and down $2.08 (choice, $206.55) with light demand and moderate offerings (112 loads of choice cuts, 44 loads of select cuts, 14 loads of trimmings, 24 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:

Steady to $2 Higher. Cash cattle markets remain generally undeveloped with packers showing a little interest midweek as a few scattered bids have slowly developed. Bids were seen at $117-to-$118 live and $188 dressed. This is expected to be where bids early Thursday morning will pick up, but may not gain the attention of feedlot managers until late Thursday or sometime Friday.

FEEDER CATTLE:

Strong gains developed late in the session despite moderate pressure seen during the session, allowing for higher trade Wednesday ($0.15-to-$1.07 Higher). Choppy moves in live cattle trade during the middle of the trading session pulled initial buyer support back from the complex. But the inability to maintain this selling pressure has created some late day support as traders quickly focused on stepping back into the complex through the end of the session. CME cash feeder index for 11/28 is $156.81, up $0.06.

LEAN HOGS:

Early support in lean hog futures Wednesday morning was quickly disrupted by moderate pressure that swept through the complex. This was not able to draw buyer interest back into the complex in nearby futures through the second half of the session. Light gains developed in deferred futures. Contracts remain mixed at closing bell ($0.67 lower to $0.22 Higher). Carcass values posted triple-digit gains following aggressive support in Loin, Picnic and belly markets. This move higher helped to draw additional attention to the entire complex. Pork cut-out: $83.45 up $1.22. CME cash lean index for 11/27 $62.89, down $0.19. DTN Projected lean index for 11/28 $62.96 up $0.07.

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Despite the spending activity seen early Wednesday, packers still seem to be focused on the overall availability of hogs in the market. With the end of the month looming Thursday, there may be some market shifts as packers try to adjust inventory levels. Thursday's slaughter is expected at 465,000 head with an expected Saturday run at 238,000 head.