GENERAL COMMENTS:
Livestock markets searched for stability Wednesday following the strong support seen Tuesday. Hog futures saw moderate-to-firm losses early in the session, but regained most of their initial losses on technical support. Cattle futures closed mostly higher, although nearby live cattle futures eroded midweek. Cash cattle activity remains generally sluggish Wednesday afternoon, though a few sales have been reported in Nebraska. Cash trade in Nebraska is seen at $107 live basis and $167 to $170 per cwt. These prices are generally $1 to $4 per cwt lower than last week. Most of the deals at $167 are scheduled for delayed delivery the week Sept. 23. Although there remain asking prices in the South of $105 per cwt, no bids are currently developing, and may be delayed until Thursday. Asking prices on cattle in the North remain at $178 dressed basis. The National Daily Direct afternoon hog report was $0.63 lower ($49-$55.50, weighted average $54.63). December corn futures were 2 1/2 cents lower. Stock markets were higher in moderate trade with the Dow up 232 points and the NASDAQ up 106 points.
LIVE CATTLE: Futures closed $0.75 lower to $0.65 higher. Traders focused more on contract delivery time than overall market direction Wednesday. Nearby October and December contracts failed to regain the market traction seen Tuesday with prices falling 25 to 75 cents per cwt. The softness in the cash cattle trade, as well as concerns that beef supplies will continue to grow over the next couple of months, is creating uncertainty. Deferred futures contracts posted moderate gains as traders focused more on long-term support with expectations that beef supplies will become more limited by early 2020 and demand will likely improve from current levels. This expectation is expanding the moderate-to-wide price spread between nearby and deferred contracts. Beef cut-outs: lower, down $2.67 (select, $208.95) to down $0.01 (choice, $230.65) with moderate demand and heavy offerings, 141 loads (46 loads of choice cuts, 41 loads of select cuts, 22 loads of trimmings, 32 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL: Steady to $5 lower from last week. With limited sales developing in Nebraska, more focus is expected to be seen in all areas of cattle country. Packer interest is expected to significantly improve through the day Thursday.
FEEDER CATTLE: Futures closed $0.95 to $1.40 higher. Feeder cattle trade saw additional commercial buyer support Wednesday. All nearby contracts saw increased activity with spot September leading the surge higher, rallying $1.40 per cwt. Combined weakness in corn markets and firm long-term support in live cattle trade has boosted prices well off long-term lows set in August, putting more focus on increased volume moving into the feeder cattle trade and increased commercial and noncommercial support over the near future. CME cash feeder index for 9/3 is $138.84, down $0.25.
LEAN HOGS: Futures closed mixed, $0.60 lower to $0.60 higher. Pressure quickly developed Wednesday morning across most lean hog futures contracts as traders tried to adjust to the sharp early week gains. The inability to spark additional liquidation allowed limited gains to redevelop in the October futures contract. The potential to bring buyers back into the complex at midweek helped to push prices well off of session lows, though most contracts still closed slightly lower. Traders remain cautious about quickly flooding into the market, but following the aggressive losses over the last two weeks, prices appear to be testing resistance levels. A move above August highs of $87.867 per cwt in the spot-October contract would spark additional technical support, also breaking outside of the recent sideways trading range. Pork values slipped lower with prices backing away from early week gains. Pork cutout values fell $1.74 per cwt, moving to $72.86 per cwt on 338 loads. CME cash lean index for 8/30 is $67.97, up $0.52. DTN Projected lean index for 9/3 is $69.57, down $0.30.
THURSDAY'S CASH HOG CALL: Steady to $1.50 lower. Continued weakness is expected in the cash hog trade with packers still fueling aggressive procurement levels. But with the holiday-shortened week, limited end-of-the-week buying is needed. Thursday slaughter numbers are expected at 485,000 head.
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