GENERAL COMMENTS:
Though livestock contracts closed the day somewhat lower, Thursday was mostly uneventful in the futures market. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.36 with a weighted average of $53.87. December corn is down 1 cent per bushel and December soybean meal is down $3.00. The Dow Jones Industrial Average is down 28.42 points and NASDAQ is up 66.01 points.
LIVE CATTLE:
There's no need for tuning into the noon hour reality-TV show or calling your crazy grandma to hear some small-town drama to spark your day -- just watch this week's live cattle market and you'll get your nail biting, head scratching fix for sure! First, let's note that on Friday the Cattle on Feed Report comes out. Typically, fat cattle do not ... I repeat DO NOT trade until after the report. It has historically been advantageous for packers to wait until after the report comes out in hopes that a bearish finding would be unveiled.
Secondly, Northern cattle are typically the later of the two bunches to trade, but this week, Northern cattle traded as early as Wednesday, for $2.00 less than last week's weighted average while the board was moving for higher prices. For the last three weeks in a row, cattle in places of Nebraska, Colorado and Wyoming have reluctantly waited to sell fat cattle until Saturday to push packers as hard as they could for more money, and the strategy has proven to be fruitful.
Now, on Thursday, fats are selling for $2.00 higher in the South and for steady money in the North. To say this week has been "out-of-the-ordinary" would be an understatement. Friday's market will be one for the watching in hopes that some answers for the week's behavior are revealed. Live cattle contracts closed mostly lower. December like cattle are down $0.52 at $114.72 and February like cattle are down $0.37 at $120.05.
Closing boxed beef prices are up: choice up $2.34 ($225.62) and select up $0.15 ($199.09) with a movement of 118 loads (75.36 loads of choice, 20.41 loads of select, 5.57 loads of trim and 16.91 loads of ground beef). The monthly livestock slaughter noted that beef production for September totaled 2.19 billion pounds, which is 1% above a year and the average live weight was down seven pounds for the previous year, at 1,352 pounds.
FRIDAY'S CASH CATTLE CALL: Steady to $1.00 higher. It wouldn't surprise many if Friday's COF Report comes out more bullish than analysis projections entail, why else would packers be eager to buy cattle before the monthly report comes out?
FEEDER CATTLE:
Feeder cattle prices remained only slightly lower for most of the day, but closed anywhere from $0.55 to $0.62 lower, except for the expiring October contract which closed up $0.20. November feeder cattle are down $0.57 at $144.17 and January feeder cattle are down $0.62 at $140.57. On an estimated run of 3,058 head (up 375 head from the previous week) Huss Livestock Market in Kearney, Nebraska, called steers under 550 pounds steady to $2.00 lower, 550 to 700-pound steers $2.00 to $7.00 higher and steers weighing over 700 pounds were sold $3.00 to $5.00 lower. Heifers under 500 pounds sold steady to $4.00 lower and heifers over 500 pounds sold steady to $3.00 higher. Demand was called moderate to good at times. Though cattlemen wish for a feeder cattle market like 2014, most have been surprised with how the market has held up come October. The CME feeder cattle index 10/23/19: up $0.12 at $144.96.
LEAN HOGS:
Like most of the livestock contracts, the lean hog sector traded mostly steady Thursday morning but then trickled down after the noon hour. December lean hogs are down $1.27 at $64.55, February lean hogs are down $1.62 at $73.47, and the biggest losses were in the May and June 2020 contracts, both down $2.02. Pork cutouts totaled 283.70 loads with 254.87 loads of pork cuts and 28.84 loads of trim. Pork cutout values: down $0.51 at $74.53. CME lean hog index 10/22/19: $65.72, up $0.25. In the monthly livestock slaughter report, pork production totaled 2.24 billion pounds, up 11% from the previous year, and September 2019 contained only four Saturday kills where as 2018 contained five Saturday kills.
FRIDAY'S CASH HOG CALL: $1.00 lower. With no news of a trade deal, and Friday most likely being consumed with cattle contracts and the COF report, higher hog prices are likely.
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