GENERAL COMMENTS:
Cash cattle interest remains extremely sluggish through midweek with a few token live bids developing in the South at $108 per hundredweight (cwt). This is well below asking prices of $113 to $114 live and $180 and higher dressed. Significant business may be delayed until after the Cattle on Feed report Friday. According to the closing report, the national hog base is $3.15 higher compared with the Prior Day settlement ($45-$59, weighted average $56.21). Corn futures are higher in light activity. September futures were 2 1/2 cents higher Wednesday. The Dow Jones Index is 172 points higher with the Nasdaq down 8 points.
LIVE CATTLE
Narrow losses slowly developed Wednesday with prices hovering in a thin market range and unable to spark increased volume. Futures closed steady to $0.17 lower. The narrow trading ranges continue to keep the potential alive for prices to move higher, but so far, there hasn't been enough momentum to accomplish that. Expected future support for beef values and traders still hovering in the upper range of trade is helping build a bullish argument for gains to be extended. But without additional traders, setting a course for higher prices in nearby and deferred contracts will be difficult. Beef cut-outs: lower, $1.29 higher (select, $194.18) and down $1.04 (choice, $204.25) with light demand and moderate to heavy offerings (93 loads of choice cuts, 32 loads of select cuts, 24 load of trimmings, 24 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady. Except for a few live bids expected to redevelop near $108 per cwt, overall cattle trade is likely to remain sluggish. At this point, it is likely to be the end of the week before active trade develops, potentially after the release of the Cattle on Feed report.
FEEDER CATTLE:
Limited volume kept prices contained in a moderate range, with prices closing mixed, $0.42 lower to $0.50 higher. Nearby feeder cattle futures trickled lower following the small gains in grains. An increase in production costs won't cause a significant shift in overall cattle sales and animals put into feedlots, but any hint of higher feed costs still makes the market nervous. Deferred futures remained lightly traded, but expected long-term demand and potentially softening supplies are helping bring traders back to the table. CME cash feeder index for 9/18 is $153.08, down $0.54.
LEAN HOGS:
Lean hog trade was mixed Wednesday, with limited direction. Futures closed $0.30 lower to $0.82 higher. Strong follow-through buyer support pushed front-month October futures 82 cents per cwt higher. This caused spot-month prices to settle at $60 per cwt. The two-day rally continues to narrow the price spreads between spot-month and 2019 contracts. Firming pork and lean hog values are helping bring traders back into the market. The rest of the complex remained in a narrowly mixed trading range as market participants look for additional late-week developments. Firm buyer interest continues to develop in pork cutout values following strong triple-digit gains in several primals. Pork cutout values gained $0.82 per cwt, moving to $78.39 per cwt. CME cash lean index for 9/17: $54.58, up $1.10. DTN Projected lean index for 9/18: $55.99, up $1.41.
THURSDAY'S CASH HOG CALL:
Steady to $2 higher. Additional buyer support is expected through the last half of the week. Most bids are expected $1 to $1.50 per cwt higher in early trade. Wednesday runs are projected to be 434,000 head. Saturday schedules are estimated at 194,000 head.
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