Futures trading volume picked up in the later part of Wednesday's trading session, with enough buying interest for nearby lean hog contracts to pull them into higher territory, but the rest of the livestock sector ended the day with losses. Hog prices closed lower on the National Direct Afternoon Hog Report, off $0.20 with a weighted average of $58.65 on 5,778 head. December corn closed up 5 1/2 cents per bushel and December soybean meal closed down $0.90 per ton. The Dow Jones Industrial Average is down 344.93 points and NASDAQ is down 82.78 points.
LIVE CATTLE:
Some light rounds of trade developed Wednesday in Texas, Kansas and Nebraska, fully steady with last week's cash cattle prices: weighted average of $110 on a live basis and $172 on a dressed basis. Asking prices have now moved to $112-plus in the South and $177 in the North. This stability is supportive to the nearby live cattle futures contracts that remain within $2 of last week's highs. The December contract closed down $0.675 at $110.65, the February contract closed down $0.425 at $113.15, and the April contract closed down $0.625 at $116.625. Futures trade could get more active through the end of the week in anticipation of Friday's Cattle on Feed report, which is expected to show an 1.8% year-over-year increase in Nov. 1 cattle inventory. Wednesday's slaughter was seen at 119,000 head -- 4,000 more than last week but even with a year ago.
Boxed beef prices were mixed: choice up $2.12 ($235.84) and select down $0.34 ($213.62).
THURSDAY'S CASH CATTLE CALL: Steady to higher. Consistent willingness from the packers to pay last week's prices may embolden asking prices for the larger portion of this week's business.
FEEDER CATTLE:
Demand from feeder cattle buyers at sale barns this week is called good or moderate everywhere, with prices anywhere from $1 lower for heifers at an Oklahoma sale to $10 higher for heifers at a big Miles City, Montana, sale where the quality of the calves was characterized as "outstanding." Similar business throughout this week ahead of the Thanksgiving holiday could give a boost to the CME feeder cattle index, which has been consistently trending upward and now sits at $137.38 from Nov. 17, and therefore keep a floor under the futures outlook. On Wednesday, the November feeder cattle futures contract closed down $0.35 at $137.025, the January closed down $2.425 at $137.30, giving up all of Tuesday's gains, and the March was down $2.275 at $136.90.
LEAN HOGS:
The December lean hog contract closed up $0.275 at $65.80, the February contract closed up $0.275 at $65.90, and the April contract closed down $0.45 at $68.775. Nearby lean hog futures contracts benefited from some buying interest in the second half of Wednesday's trading session, but these mild gains aren't enough to change much about the ongoing lower trend seen on the hog charts since mid-October. Although this tends to be a time of year when grocery stores feature certain pork cuts, like ham for the Thanksgiving table, in topsy turvy 2020 this retail feature activity is lagging behind its five-year average. Looking ahead, weakness in ham prices Wednesday contributed to an overall slide in the cutout value: down $0.92 at $77.68. Pork cutouts total 394.12 loads with 327.95 loads of pork cuts and 66.17 loads of trim. Wednesday's slaughter was seen at 494,000 head -- much higher than last week's Veteran's Day number but only 1,000 higher than a year ago. The CME lean hog index for Nov. 16: down $0.35 at $69.73, and the DTN projected CME lean hog index for Nov. 17 isn't available due to packer submission issues.
THURSDAY's CASH HOG CALL: Steady to slightly lower. There has been a trend of steady erosion in weighted average prices with lower high bids and also lower low bids.
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