GENERAL COMMENTS:
Cattle futures moved mostly lower with October live cattle futures the only contract month able to etch out a gain by the end of the session. Strong underlying pressure redeveloped in feeder cattle futures, offsetting most of Tuesday's gains by the end for the day. Hog prices closed mixed with October futures holding a $1.90 per cwt gain. The focus on strong outside market support moved traders' attention away from the livestock complex. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.57 with a weighted average of $83.50 on 8,193 head. December corn is up 13 1/4 cents per bushel and December soybean meal is down $2.20 per ton. The Dow Jones Industrial Average is up 267 points and NASDAQ is up 126 points.
LIVE CATTLE:
Live cattle prices remain mixed at the end of the session Wednesday. Although all contracts have actively moved away from session lows, October futures were the only contract to close higher by the end of the session. Limited interest developed in the live cattle market, with most of the pressure seen in feeder cattle trade. The majority of Tuesday's gains are holding but concerns of follow-through weakness in beef values may slowly erode prices back near support levels seen Monday. October live cattle closed $0.05 higher at $124.17, December live cattle closed $0.20 lower at $129.45, and February live cattle closed $0.10 lower at $133.15. Cash cattle trade started to trickle in Wednesday morning with light live trade seen in both Kansas and Texas at mostly $124 per cwt. This is generally steady with last week's average. Trade in Nebraska remains light but seen at $200 dressed and $125 per cwt live basis. The bulk of trade is $1 per cwt lower than last week's weighted average price. Asking prices remain firm on unsold cattle at $125 and higher in the South and $202 and higher in the North. Due to technical difficulties the Fed Cattle Exchange Auction, which trades on Wednesday, was not held. It is unclear at this time if the sale will be pushed to Thursday, or canceled for the week, resuming next week.
Wednesday's slaughter is estimated at 121,000 head, steady with a week ago and 1,000 more than a year ago. Week to date levels are at 355,000 head, 110,000 ahead of last week, 5,000 below year-ago levels. Due to the active post-holiday kill rate last Saturday, week to date totals will not align well with previous levels until the end of the week.
Boxed beef prices closed lower: choice down $3.07 ($319.82) and select down $6.73 ($283.89) with a movement of 191 loads (110.94 loads of choice, 40.28 loads of select, 13.96 loads of trim and 26.02 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady to $1 lower. Early trade that developed Wednesday would indicate that the weekly direction of trade will remain steady to weak compared with week ago levels. This could leave both sides holding out until late Thursday or Friday, but most of the needed activity could likely be done in the next day.
FEEDER CATTLE:
Feeder cattle led the cattle market lower Wednesday as strong triple-digit losses developed in most contract months. Although spot futures backed away from session lows by the end of the trading day, losses in November contracts of $2.15 per cwt screamed market weakness, despite the strong rally seen Tuesday. The widespread market support that developed Tuesday was very important to not only stop the aggressive downward price cycle but could be the point needed to help establish long-term support in a still weak feeder cattle market. Over the next two trading sessions, nearby feeder cattle contracts will need to hold above Monday's support level, or additional liquidation is likely to actively develop in all contract months. Demand at cash feeder cattle sales earlier in the week have been listed as light to moderate. Prices are generally steady to $3 per cwt lower, with uncertainty as to how buyer demand will increase once more new crop calves flood the markets over the coming weeks. September feeders closed $0.55 lower at $154.72, October feeders closed $1.65 lower at $156.50 and November feeders closed $2.15 lower at $157.57. The CME Feeder Cattle Index for Sept. 14: $154.20, down $0.19.
LEAN HOGS:
Lean hog futures found limited but much needed buyer support Wednesday morning as spot month October contracts moved higher for the first time in over two weeks. The triple-digit gains in front month contracts helped to push prices above $82 per cwt, but given the long stretch of downward shifting prices, the tone of the market remains under pressure. Even though all contracts posted positive moves at some point in the session, October and December contracts were the only markets to hold gains at closing bell. This weakness in 2022 contract months is evidence that underlying pressure continues to hold, limiting buyer support from actively moving back into the complex. October lean hogs closed $1.90 higher at $82.27, December lean hogs closed $0.07 higher at $72.25, and February lean hog futures closed $0.37 lower at $75.37. Pork prices trickled lower despite mixed primal cut moves. Pork cutouts totaled 402.10 loads with 373.79 loads of pork cutouts and 28.85 loads of trim. Pork cutout values: up $0.50, $105.70. Wednesday's slaughter is estimated at 481,000 head, 7,000 more than a week ago and down 3,000 from a year ago. Week to date slaughter is listed at 1.43 million head. Currently 21,000 below year ago levels. The CME Lean Hog Index for Sept. 14: down $1.42, $95.35.
THURSDAY'S CASH HOG CALL: Steady to $1 lower. Continued volatility in cash hog and pork values, combined with wide swings in futures trade, will likely keep hog bids steady to weak early Thursday morning.
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