Buyers quickly stepped back into cattle futures Tuesday morning as traders tried to "balance the scales" following active liquidation in live cattle trade Monday. Firm underlying gains in live cattle and feeder cattle futures helped to minimize the fears that a widespread market freefall is developing. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.19 with a weighted average of $63.79 ($58.00 - $67.00) on 7,805 head. December corn is up 2 1/4 cents per bushel and December soybean meal is up $1.70. The Dow Jones Industrial Average is down 219.56 points and NASDAQ is down 27.51 points.
LIVE CATTLE:
Firm buyer support flooded the market Tuesday as traders quickly re-owned live cattle positions in all contract months. October live cattle closed $0.47 higher at $108.82, December live cattle closed $0.40 higher at $111.22 and February live cattle closed $0.57 higher at $113.65. After testing month-long support at $110.17 Monday in spot November contracts, traders seemed to remain content with the ability to regain a portion of previous losses. The focus on firming cash values and beef market stability helped to bring buyers back to the table, moving prices back above $111 per cwt in November contracts. The recent market shifts over the last week is setting up the potential for a strong sideways market trend that could hold through most of October as traders continue to wrestle with short-term beef demand growth and continued uncertainty of market-ready cattle still waiting to be shipped. Tuesday's cash cattle trade remains generally lackluster, which is not unexpected for a Tuesday. There have been a few token bids developing at $107 to $108 live basis and $169 dressed basis, but well below expected asking prices, which will likely push any active trade toward the end of the week. Asking prices in the North seem to remain very illusive, although there are a few reports of cattle in the South pricing cattle at $111 to $112 per cwt. Given the very slim trade seen Monday as high as $109 per cwt, it is expected that most feeders will not settle early in the week without prices at least $1 to $2 per cwt higher than last week. Tuesday's slaughter is estimated at 120,000 head, steady with a week ago and 1,000 head more than a year ago.
Boxed beef prices closed lower: choice down $2.18 ($212.44) and select down $0.26 ($200.08) with a movement of 157 loads (82.94 loads of choice, 45.83 loads of select, 11.82 loads of trim and 16.85 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to $2.00 higher. Limited cash cattle activity is seen going into midweek. The ability for feeders to keep asking prices elevated is likely to support steady to higher trade by the end of the week. It may be Thursday or Friday before active trade develops in most areas.
FEEDER CATTLE:
Feeder cattle led the cattle market higher Tuesday afternoon with active support slowly but steadily trickling back into the complex. Spot November futures led the renewed rally, as traders look for additional midweek support. October feeders closed $0.82 higher at $138.12, November feeders closed $1.27 higher at $136.82 and January feeders closed $0.57 higher at $134.22. It is too early to determine if last Friday's close in November feeder cattle futures at $135.52 per cwt will stand as the seasonal low to the market, but the strong triple-digit move higher Tuesday seemed to indicate that the market has renewed life following early holiday positioning done in most cattle contracts. Continued focus on feeder cattle sales developing across the country through the upcoming weeks will likely create speculation of short- and long-term market direction. For now, the feeder cattle market direction continues to be a day-to-day situation with traders closely focusing on both beef values and outside grain market moves. The CME feeder cattle index for Oct. 12: down $0.57, $140.71.
LEAN HOGS:
Mixed trade developed in lean hog futures Tuesday, with light to moderate follow-through pressure in deferred contracts offset by firm gains in later month contracts. December lean hogs closed $0.47 lower at $66.15, February lean hogs closed $0.10 lower at $70.12 and April lean hogs closed $0.22 higher at $74.62. Moves in December lean hog futures continue to lead the e complex with recent strong gains running into significant resistance levels near $67 per cwt. The ability to move through these levels over the next couple of trading sessions will likely depend on underlying fundamental support, although technical buying may remain limited in the near future. Pork cutouts totaled 362.45 loads with 324.37 loads of pork cuts and 38.08 loads of trim. Pork cutout values: up $1.59, $95.90. Ham cuts led the price surge higher, increasing $4.04 per cwt Tuesday. Tuesday's slaughter is estimated at 488,000 head, 1,000 head more than a week ago and 1,000 head less than a year ago. The CME lean hog index for Oct. 9: up $0.43, $78.14, with projected CME lean hog index for 10/12/2000: up $0.07, $78.21.
WEDNESDAY'S CASH HOG CALL: Steady. Given the recent strength in cash hog values during the last month, packers seem to be limiting further spending levels in the near future. This could allow for choppy market moves in the coming days as cash values are moving back and forth within a narrow to moderate range.
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