GENERAL COMMENTS:
Firm gains have moved back into live cattle futures as traders confirm buyer support which developed Thursday, moving prices to six-week highs. The ability of live cattle contracts to move back to pre-Labor Day levels is expected to spark even more momentum through the entire complex. Hog futures have been trying to establish supportive price levels all week. Firmness in cash hog prices and pork values over the last couple of days seem to have been enough to entice buyers back into the complex. Feeder cattle trade is pulling back from previous gains, driven primarily by aggressive moves higher in corn trade, putting focus on higher production costs for cattle feeders. December corn is up 8 cents per bushel and December soybean meal is up $1.80 per ton. The Dow Jones Industrial Average is up 280 points with Nasdaq up 45 points.
LIVE CATTLE:
Firm, follow-through gains have moved back into live cattle futures Friday morning with traders adding Thursday's strength. This is posting six-week market highs and the ability to hold price levels in this range will leave nearby contract moves positive for the week. Combined with last week gains, nearby live cattle futures have rallied $4 to $5 per cwt during the first two weeks of October. This support is likely to be the spark needed to bring additional noncommercial interest back into the market. December live cattle futures are finding firm fundamental support since moving above the $130 per cwt level, which has the potential to help bring about additional support in cash values next week. Cash cattle activity remains quiet Friday morning with the bulk of trade done for the week. Although there may be some clean-up trade taking place in several areas, the price tone for the market appears to be set. Cattle left on showlists remain priced at $125 live in the South and $198 dressed in the North. Feeders appear content carrying any additional cattle into next week, rather than lowering asking prices at this point. Cash prices for the week appear to be generally steady with last week's levels at $124 live and $196 dressed, but it will be interesting once average prices are listed Monday to see if market firmness once again developed. This could spark further longer-term market support and lead to a trend of higher prices through the rest of the year.
Friday morning's boxed beef prices are higher in moderate trade, with choice cuts $0.97 higher at $281.29 and selects up $0.80 at $261.48 on a total count of 101 loads. Dow Jones estimated Friday's cattle slaughter at 109,000 -- 7,000 less than a week ago and year ago levels.
FEEDER CATTLE:
Feeder cattle have turned lower in Friday morning trade as strong, end-of-week support across the grain complex has created a shift in trader interest despite gains redeveloping across the cattle complex. Traders are focusing on overall production costs at the end of the week, but also some end-of-week adjustments are seen Friday following the firm market rally since the first of October. Traders are looking for price stability and developing a sustainable market range through the near future. It appears November futures may be finding longer-term support between $160 and $163 per cwt, building a stronger base to draw even more volume and commercial trade interest back into the complex. The CME Feeder Index was priced at $154.01 for Oct. 13.
LEAN HOGS:
Light to moderate gains have slowly but steadily trickled back into lean hog futures Friday. Following a week of lower moving markets, traders took the Friday session to adjust positions. Given current price levels in futures, and building support in wholesale pork cuts, it appears nearby lean hog futures are at or near support levels. The perception of a slow but deliberate change in market direction is likely enough to spark follow-through buyer support early next week. Traders are closely following nearby contract months as this will focus on demand levels through the end of the year. In addition, the shifting supply and demand situation during the first half of 2022 is helping stimulate late-week buyer interest. Cutouts are down $1.07 at $104.99 Friday morning on 211.65 loads. Negotiated hog prices are $0.74 lower at $67.94 per cwt on 4,917 head. The swine/pork market formula price is listed at $86.88 per cwt. Dow Jones estimated Friday's hog slaughter at 474,000 -- 2,000 less than a week ago and 8,000 less than year ago levels. The CME Lean Hog Index is listed at $87.59 per cwt for Oct. 14.
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