GENERAL COMMENTS:
For all practical purposes, cash cattle market activity remains at a standstill. The report of limited cattle selling in Iowa at $112 per hundredweight (cwt) Tuesday is not expected to set a trend given the amount of cattle and timing in the market. Most bids are undeveloped at this time, although it is expected that when packers roll out initial bids, price levels will be seen from $108 to $109 live basis, just for a starting point. Asking prices are starting to slowly develop in the south with a few cattle priced at $115 per cwt. Most likely, the majority of trade will be pushed off until Thursday or Friday. According to the closing report, the national hog base is $0.53 higher compared with the Prior Day settlement ($58.50-$64.25, weighted average $63.24). Corn futures were higher in light activity with December futures closing 1 1/2 cent higher. The Dow Jones Index is 159 points higher with the Nasdaq down 2 points.
LIVE CATTLE:
Firm gains developed late in the session Tuesday with prices backing away from early morning pressure. Futures closed $0.10 to $0.52 higher. Buyer activity was very thin with live cattle trade mixed to mostly lower through most of the session. This may continue to limit the ability to bring active support back to the complex through the end of the week. October futures moved 30 cents per cwt higher, settling at $113.97 per cwt, while December contracts are testing levels of $119.50 per cwt. These recent gains continue to move through short-term resistance, but one swift market move lower could place prices back within a sideways trading range. Beef cut-outs: down, $0.65 lower (select, $193.98) to down $0.19 (choice, $204.89) with good demand and moderate offerings (54 loads of choice cuts, 34 loads of select cuts, 16 load of trimmings, 13 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $1 higher. Interest will remain sluggish once again Wednesday morning with bids expected to be hard to find. The few cattle that sold in Iowa are not enough to set the market trend, but it will be closely watched through the end of the week.
FEEDER CATTLE:
Early pressure through most of the morning was swept away by swift and active buying interest flooding into the market late Tuesday, pushing futures $0.42 to $0.70 higher. The fact that all contracts months traded within a generally tight trading pattern in the last hour of trade indicates uniformity across the complex. All remaining 2018 contracts posted price levels at $159 per cwt, holding a narrow discount to 2019 contracts. CME cash feeder index for 10/1 is $157.82, up $0.32.
LEAN HOGS:
Sluggish trade most of the session led to a mixed close, $0.70 lower to $1.67 higher. The front-month October futures contract continues to set the pace for higher price levels with traders quickly backing away from early pressure as spot-month futures posted a triple-digit gain, moving $1.67 per cwt higher, to $66.42 per cwt. The overall lack of support in other nearby contracts allowed December contracts to fall 70 cents per cwt at closing bell with traders trying to position holdings following the recent market gains. Pork cuts eroded Tuesday on strong pressure in picnic primal cuts. Pork cutout values fell $0.57 per cwt, moving to 80.48 per cwt. CME cash lean index for 9/28: $67.26, up $0.81. DTN Projected lean index for 10/1: $67.93, up $0.67.
WEDNESDAY'S CASH HOG CALL:
Mixed. Limited direction is expected to be seen early Wednesday morning with bids seen $1 lower to $1 per cwt higher. However, most bids are expected steady to weak early Wednesday morning. Slaughter numbers are expected to be seen at 472,000 head Wednesday morning.
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