GENERAL COMMENTS:
A couple nuggets of light trade have been reported Wednesday in Texas at $101, which is $2 higher than last week's weighted average, although it's hard to say whether this will represent the start of a real recovery trend in cash cattle prices. More trade volume on Thursday or Friday will help address that question. Asking prices are around $103 plus in the South and $167 to $170 in the North. According to the closing report, the national hog base was $0.29 lower (weighted average $44.80). Corn futures closed 3 1/4 cents higher. Crude oil continues to pull back (down $1.10 per barrel). The stock market is near unchanged in the S&P 500, and that index remains above 3,000.
LIVE CATTLE
In a market that's generally poised for price recovery, October live cattle futures posted gains of more than $1 Wednesday, with deferred contracts showing smaller gains. Analyst estimates for the Sept. 1 Cattle on Feed report, due out on Friday, show a widespread expectation for lower inventory compared to last year at this time, but this doesn't necessarily mean the industry is starting to contract. Feedlots' optimism about profitability took a major hit through the month of August, and may only now be starting to recover, especially if last week's $93.40 futures price continues to hold as a chart low. Beef cutouts: lower, down $1.53 for choice at $218.24 and down $1.94 for select at $191.97, with light demand and heavy offerings (172 total loads of cuts, trimmings, and grinds).
THURSDAY'S CASH CATTLE CALL
Steady to $2 higher. We've seen hints that the market may be pointed upward for a recovery after last week's lows.
FEEDER CATTLE
Feeder cattle futures continue to display the most bullish behavior in the livestock sector this week, building on Tuesday's gains with another $1.10 bump in the October contract, bringing it to $138.40 at the close. Expectations for relatively low August placements to be shown in the upcoming Cattle on Feed report are a reminder that beautiful pasture conditions across most of cattle country may be encouraging calf owners to background and keep animals off the market for a while longer. The CME cash feeder index for 9/17: $137.33, up $0.21.
LEAN HOGS
Light trading volume made for jumpy spreads between lean hog futures contracts Wednesday, but the overall price levels remained inside previously tested ranges, with the October contract never venturing below $62 throughout the session. Another large daily slaughter number (488,000) emphasized the push-and-pull between heavy domestic supplies and uncertain international demand. Pork cutout: $68.11, down $0.10, with particular weakness in the loin values (down $3.28). CME cash lean index for 9/16: $57.49, down $0.99 (DTN Projected lean index for 9/17: $56.76, down $0.73).
THURSDAY'S CASH HOG CALL
Steady to $1 lower. The trend in both cutout and cash hog prices has been unrelentingly lower lately.
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