GENERAL COMMENTS:
Cash cattle trade remained quiet Thursday, with only a few scattered bids on the table ($101 in Kansas; $162 in Iowa). Asking prices are around $103 plus in the South and $167 to $170 in the North. A light trade took place in parts of the South Wednesday at mostly $101 or $2 higher than last week's weighted averages. It is looking more and more likely that additional trade could be delayed until sometime Friday. According to the closing report, the national hog base was $0.25 lower ($41-$46.50, weighted average $44.48). Corn futures closed 1 1/2 cents higher amid outside markets that finally seem to have quieted down this week. The stock market is down 3 points in the S&P 500, with the index still above 3,000.
LIVE CATTLE
Narrowly mixed futures prices Thursday, down $0.575 in the nearby and up $0.15 in the February contract, mostly continued the short-term pattern of higher chart movement. Futures trading volume was notably low, suggesting fund traders have already positioned themselves ahead of Friday's monthly Cattle on Feed report, which is confidently expected to show a year-over-year drop after an anxious month of lower placements. Week-to-date slaughter numbers (467,000) show a still-eager pace of business amid favorable packer margins. Beef cutouts: steady, down $0.07 for choice at $218.17, and up $0.19 for select at $192.16, with moderate demand and moderate offerings (139 total loads of cuts, trimmings, and grinds).
FRIDAY'S CASH CATTLE CALL
$2 higher or more. The light trade that's taken place so far this week has improved on last week's numbers, and the time may be ripe for this market to recover off past lows.
FEEDER CATTLE
Fall feeder contracts led the futures gains on Thursday, with October up $0.525 and November up $0.95, suggesting there's growing interest in the upcoming fall calf crop. Feed prices have stayed mostly flat this week, and pasture conditions and hay availability remain favorable. Sale barn receipts remain extremely quiet this season, but nevertheless, the CME cash feeder index for 9/18 was $137.29, down $0.04.
LEAN HOGS
Lean hog futures were mostly higher across the board, and the futures spreads resumed their trend of widening out, with $6.4250 between the April and May 2020 contracts, for instance. The rumor of the day out of China is that some tentative deal for purchasing more U.S. agricultural products could be penciled out by next month (It's always "next month," isn't it?), and any positive signs about that relationship will be interpreted bullishly in the deferred lean hog market. Pork cutout: $69.02, up $0.91, with loins values rebuilding after their Wednesday weakness. CME cash lean index for 9/17: $56.76, down $0.73 (DTN Projected lean index for 9/18: $56.32, down $0.44).
FRIDAY'S CASH HOG CALL
Steady. The trend of lower cutout and cash hog prices may be bottoming out, at least temporarily.
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