GENERAL COMMENTS:
Cash cattle trade Thursday kicked off steady with last week, setting anchor prices ahead of the majority of the week's business to develop Friday. Asking prices are seen around $113-$114 in the South, and $180 in the North. Futures traders seem to have their guesses and positions already dialed in ahead of Friday's Cattle on Feed report, and trading volume was relatively light Thursday. Lean hog futures sustained their ongoing rally with $1.25 gains focused on the October contract. The national hog base has jumped higher then lower from day to day, now $4.44 lower Thursday, according to the closing report: weighted average $51.77. Corn futures were higher (6 3/4 cents) alongside sudden double-digit gains in soybeans, which will be vulnerable to disappearing again just as suddenly if it turns out China's suggested tariff reductions won't really apply to these markets. The Dow Jones Index is 260.22 points higher and the Nasdaq is up 80.47 points.
LIVE CATTLE
Live cattle futures pared recent gains and pulled back into a consolidation zone with $0.65 losses in the October contract but more limited losses in the summer contracts of only $0.02 to $0.08. Speculative traders have been actively positioning ahead of Friday's upcoming Cattle on Feed report, which is expected to show 105.5% of the number in feedlots last Sept. 1. But the bulk of that trading volume seems to have been made in previous sessions, and now the market will just "wait and see." A little cash business popped up Thursday just before the noon hour and prices have so far held steady with last week. The light trade noted Thursday took place in Nebraska and Iowa at $175 dressed. Beef cut-outs were stronger across the board: choice $0.76 higher ($205.01), select $1.29 higher ($195.47), with light demand and offerings (29 loads of choice cuts, 16 loads of select cuts, 13 load of trimmings, and 15 loads of coarse grinds).
FRIDAY'S CASH CATTLE CALL:
Steady. Asking prices are seen around $113-$114 in the South, and $180 in the North.
FEEDER CATTLE:
With the exception of some upward movement in the nearby September feeder contract, which will expire next week, futures were lower Thursday, with losses of $0.40 to $0.60. These deferred contracts may have been spooked by the suddenly higher prices seen in the feed grains markets Thursday. CME cash feeder index for 9/19 is $154.46, up $1.38.
LEAN HOGS:
October hog futures continued their upward surge Thursday with gains of $1.25, but 2019 contracts have been more reluctant to rally, and most closed the session with light losses. The sudden enthusiasm for buying nearby lean hog futures may have been tied to swirling ideas that China may soon reduce tariffs on some imported products from some countries, which could benefit U.S. pork export prices. In recent months, overall quantities of exported pork have been stronger than last year and stronger than a five-year average, but the demand from China specifically has suffered compared to 2017 numbers. Processing plants in North Carolina have been starting back up, with more to follow Friday. Certain primal values have been the highlight of the day-to-day surge in cutout values, and with bellies up $4.03 Thursday and loins up $2.11, the overall carcass value gained $0.56 to reach $78.95 per cwt Thursday. CME cash lean index for 9/18: $55.99, up $1.41. DTN Projected lean index for 9/18 is $57.44, up $1.45.
FRIDAY'S CASH HOG CALL:
Steady to $1 higher. Uncertainty remains for how willing the cash market will be to follow the excitability of the nearby futures market.
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