Live cattle have been on a seesaw with futures trying to hold losses to a minimum. Front-month October is converging to cash, showing limited movement, but a slight gain. The same cannot be said for feeder cattle as they suffer triple-digit losses. Futures have broken through support and have increased technical bearishness. Lean hogs are diverging with closer months higher and later months lower. December corn is down a penny. The Dow is up 219 points while the Nasdaq is 53 points higher.
LIVE CATTLE:
Cattle futures remain entrenched in a sideways pattern. Traders are cautious as to the direction of cash this week. The feeling is that futures are well-priced in light of the cash market leaving little reason to get excited one way or the other. The October futures contract will cease trading Wednesday and is attempting to remain very close to underlying cash. December is priced nearly $3 above October, providing some encouragement. There is interest in doing business in the country, but packers and feedlots continue to do their song and dance, waiting to see who will make the effort to accomplish that business. Feedlots are offering $1-$3 higher than last week in the hopes that packers will need to step up again. Boxed beef cut-outs at midday are higher with choice up $2.19 and select up $1.70 with light movement of 48 loads reported (21 loads of choice cuts, 11 loads of select cuts, 5 loads of trimmings, and 11 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures remain under pressure with contracts punching through price support, but so far have been able to rebound slightly above that support. Technically, this could open the way for further price erosion as the market reacts to a somewhat benign live cattle market. Front-month November carries a premium of $4 to January.
LEAN HOGS:
Hogs have made a nice rally, supported by reoccurring news of African swine flu. Closer futures contracts show slight gains, while deferred contracts show slight declines. Cash price is higher on the Nation Direct morning cash report. The weighted average price is $0.43 higher at $58.13 per cwt with a range of $52 to $59.50 on 6,925 head sold. The National Pork Plant report reported 242 loads selling (204 loads of cuts and 38 loads of trim). The lean hog index for 10/26 is $64.16, down $0.45, with a projected two-day index of $63.95, down $0.23.
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