GENERAL COMMENTS:
From Friday to Friday: livestock futures scored the following changes: October live cattle up $0.40, December live cattle up $0.72; October feeder cattle off $1.90, November feeder cattle up $0.28; December lean hogs off $3.22, February lean hogs off $2.55
The abrupt shift in lean hog futures at the end of the week created the most noticeable market shift in all livestock trade, as traders seem to finally have found underlying support following a pullback in price levels over the last week. Mixed trade in cattle markets developed as follow-through buyer interest slowly but steadily developed in live cattle trade, while feeder cattle prices closed firmly lower based on active buying in grain trade. Traders are looking for more fundamental market direction early next week, as cash cattle trade ended generally steady, but overall disappointing given the expectations of higher market moves through September. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.96 with a weighted average of $67.33 on 86,171 head. December corn is up 9 cents per bushel and December soybean meal is up $2.50 per ton. The Dow Jones Industrial Average is up 382 points and NASDAQ is up 73 points.
LIVE CATTLE:
Follow-through support steadily moved through live cattle futures Friday, as nearby and deferred traders continue to focus on firmness in beef values and the potential to expand the market rally. Nearby contracts have now moved to six-month highs, allowing for increased underlying support in all markets and drawing renewed interest from both commercial and noncommercial traders. October live cattle closed $0.22 higher at $125.97, December live cattle closed 0.67 higher at $130.97 and February live cattle closed $0.70 higher at $135.35. Cash cattle markets are quiet Friday with trade starting Wednesday and limited but noticeable clean-up activity developing Thursday. Trade for the week is reported generally steady with last week with most live cattle trade priced at $124 per cwt, while dressed cattle in the North are reported at $196 per cwt. Cattle left on showlists will likely be carried over to next week, but still priced at $125 in the South and $198 in the North. Early trade next week is not expected, but it is likely that initial asking prices will just be carried over from this week's price list, although given the renewed support in futures trade and beef values, firmer prices are being expected.
Friday's slaughter is estimated at 107,000 head, 9,000 less than a week ago and year ago totals. Week to date totals are at 646,000, including an expected 59,000 head Saturday, 13,000 less than year ago levels.
Boxed beef prices closed lower: choice down $0.08 ($280.24) and select down $0.06 ($260.62) with a movement of 154 loads (109.15 loads of choice, 24.89 loads of select, 10.34 loads of trim and 9.43 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady. Limited activity is expected Monday morning with bids and asking prices unlikely to be available until later in the week. The focus on steady to firm price levels by feed yard managers may be harder for packers to get any business done without offering higher price levels.
FEEDER CATTLE:
Following a generally stable week in feeder cattle trade, sellers moved back into the complex following renewed price gains in grain trade. The corn market continues to have a strong grasp on the direction and activity level of feeder cattle and Friday's move lower in all feeder cattle contracts was no exception. Even though firming live cattle markets seem to solidify previous buyer support, there still is uneasy feelings by some traders about the ability to push feeder cattle even higher over the near future. November and January futures are hovering at $161 per cwt, and if upcoming placement levels in the next two reports are larger than expected, these price levels may be hard to maintain. October feeders closed $0.92 lower at $157.65, November feeders closed $0.82 lower at $160.97 and January futures closed $1.32 lower at $161.45. The CME Feeder Cattle Index for Oct. 12: $154.26, up $0.11.
LEAN HOGS:
Strong underlying support developed in all lean hog futures Friday as December contracts took over as the spot month contract following October contracts expiring at the end of Thursday's session. This created the potential that additional buyer support may continue to move into what is expected as a moderately oversold lean hog complex following a weak of active pressure. Traders are holding prices well above September lows, but the late September shock in inventory reduction is being tempered by concerns that pork demand may not be as bullish over the next six months as previously expected. This will likely leave prices hovering within the current trading range, while traders try to find more stable price support during late October. December lean hogs closed $0.95 higher at $78.27, February lean hogs closed $1.02 higher at $81.32, and April lean hog futures closed $1.37 higher at $85.17. Pork prices retreated once again Friday afternoon following firm losses in Loin, Ham and Belly cuts. Pork cutouts totaled 334.38 loads with 303.55 loads of pork cutouts and 30.82 loads of trim. Pork cutout values: down $4.74, $101.32. Friday's slaughter is estimated at 477,000 head, steady with a week ago and down 5,000 from a year ago. Saturday runs are expected at 256,000 head. This would move weekly slaughter numbers to 2.63 million head. The CME Lean Hog Index for Oct. 14: down $1.23, $87.59.
MONDAY'S CASH HOG CALL: Steady. The late week stability in futures trade and potential to move pork values higher in the coming days is helping to solidify cash market prices, although given the number of current market ready hogs, strong gains are unexpected in the immediate future.
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