GENERAL COMMENTS:
Cash cattle trade remains generally quiet with just a few token dressed bids of $180 per cwt. More activity should develop from packers in the next couple of days. Asking prices are $118 live and $185-plus dressed. Active trade may not develop until the second half of the week. According to the closing report, the national hog base is $0.55 lower compared with the prior day settlement ($51.00-$57.00) weighted average $55.80. Corn futures are lower in light activity. December futures were 3/4 cent lower. Dow Jones Index is 110 points higher with Nasdaq up 26 points.
LIVE CATTLE:
Prices shifted higher through most of Tuesday's session, although traders quickly backed away from narrow gains with a mixed market close ($0.37 lower to $0.20 higher). Narrow trading ranges were noted late Tuesday with prices in nearby contracts hovering from 20 cents lower to 10 cents higher. The ability to bring some stability into the market following sharp early week losses may be the largest victory in the cattle complex. But with uncertainty about further demand through the end of the year and beyond, traders seem to be reluctant to aggressively move into the market. Beef cut-outs: higher, $2.31 higher (select, $204.66) and up $0.17 (choice, $218.76) with light demand and light to moderate offerings, 127 loads (56 loads of choice cuts, 30 loads of select cuts, 8 load of trimmings, 33 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady. Interest in cash cattle markets remains quiet although feedlot managers continue to focus on the ability to move prices higher over the last couple of weeks and will remain aggressive with asking prices through the next couple of days. Active trade may not materialize until late in the week.
FEEDER CATTLE:
Midday market support quickly eroded in the late minutes of trade, allowing mixed market direction Tuesday ($0.40 lower to $0.47 higher). Feeder cattle futures have bounced higher and lower as traders continue to react to Monday's sharp losses. Firm gains moved into the complex through midday, allowing traders to cover short positions. But the underlying depth of buying activity remained limited, pushing deferred contracts lower through the end of the session. Narrow gains in nearby contracts could support additional buyer activity through the end of the week. CME cash feeder index for 11/05 is $153.32 down $0.23.
LEAN HOGS:
Limit losses developed in front-month December futures as active pressure quickly swept through all lean hog trade ($0.85 to $3 lower). Aggressive selling pressure went unchecked through the trading session Tuesday with all nearby contracts holding triple-digit losses. December's limit move will expand trading limits Wednesday morning and create the possibility of additional wide market swings. Even with the sharp losses seen in the complex, traders remain locked in the wide sideways trading range seen over the last couple of weeks. The fact that prices are still a long ways from support or resistance levels is allowing traders free rein in aggressive market swings. Pork cuts eroded Tuesday with firm gains in loin cuts offset by triple-digit losses in butts, picnics and belly primals. Pork cutout values fell $0.78 per cwt, moving to $74.08 per cwt. CME cash lean index for 11/02 $64.08 down $0.04. DTN Projected lean index for 11/05 $64.00 down $0.08.
WEDNESDAY'S CASH HOG CALL:
Steady to $2 lower. Follow-through pressure is expected to continue in hog prices at midweek. Most bids should be $1 to $1.50 per cwt lower, with the general weak trend still being established. Slaughter is estimated at 476,000 head Wednesday morning. Saturday runs are expected to be 240,000 head.
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