Moderate-to-strong
follow-through pressure is developing in lean hog and feeder cattle
futures late morning Thursday. This may spark some additional
end-of-the-week liquidation as hog futures continue to show the most
aggressive market pressure during mid-October. Corn markets are higher
in light trade. December corn futures are 6 cents higher. Stock markets
are lower in light trade. The Dow Jones is 408 points lower while Nasdaq
is down 183 points.
LIVE CATTLE:
Cattle futures have hovered within a narrowly
mixed trading range through most of the morning. Nearby gains of 10
cents to 50 cents seem to be firmly planted through the complex, while
deferred futures are under light-to-moderate pressure in late morning
based in part to active pressure in feeder cattle trade. Markets are
likely to remain in the current trading range, with overall lack of
direction expected through the end of the session. Cash cattle trade is
starting to develop with light-to-moderate activity in most areas. Live
cattle trade is at $111 per cwt in both the North and South, which is
fully steady with last week's prices. A few more scattered dressed deals
have been seen in the North with prices at $173 per cwt. This is $2 per
cwt lower than last week, and generally $1 per cwt lower than the
limited activity, which developed Wednesday. This may not be able to
clear enough cattle for the week, although these moves may set the price
tone for additional sales that may take place the next two days. Asking
prices are at $113 to $114 per cwt live and $178 and higher dressed.
Boxed beef cutouts at midday are mixed, $0.63 lower (select) and up
$0.86 per cwt (choice) with moderate movement of 83 total loads reported
(43 loads of choice cuts, 19 loads of select cuts, 10 loads of
trimmings, 12 loads of ground beef).
FEEDER CATTLE:
Morning buyer support, which stepped into the
market for a portion of the Thursday trading session, quickly
evaporated, allowing for additional market uncertainty through the
entire complex. Nearby contracts remain firmly higher with prices 50
cents to 75 cents per cwt in remaining 2018 contract months. The
weakness in deferred contracts focuses on overall lack of commercial
interest moving back to the complex, following strong gains in corn
trade after the USDA crop report.
LEAN HOGS:
Even though lightly traded October contracts
continue to hold narrow gains, the rest of the complex continues to
quickly erode lower. This is holding triple-digit losses in all other
contracts months. December futures are currently leading the complex
lower with widespread commercial liquidation developing as prices are
$1.70 per cwt lower. This pressure is likely to influence market
activity through the rest of the week. Cash prices are higher on the
National Direct morning cash hog report. The weighted average price is
$0.34 higher at $62.99 per cwt with the range from $58.00 to $63.42 on
4,191 head reported sold. Cash prices are unreported due to
confidentiality on the Iowa/Minnesota Direct morning cash hog report.
The National Pork Plant Report posted 130 loads selling on the morning
report. Pork carcass values gained $0.11 per cwt at $79.31 per cwt. Lean
hog index for Oct.9 is at $69.34 up 0.01 with a projected two-day index
of 69.28, down 0.06.
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