Limited market movements developed in live cattle and lean hog futures Monday as traders continue to slowly adjust to recent market shifts through the complex. Live cattle futures posted moderate losses of 40 to 55 cents per cwt as prices have backed away from six-week highs as traders try to focus on the potential for additional short-term market moves and the direction of cash trade through the next week. Lean hog futures have moved higher following late-week support Friday. The expectation in hog trade is that short-term price support may be in place, allowing traders to focus on potential support through the rest of October. Feeder cattle trade was the most volatile Monday with triple-digit losses sweeping through the complex, creating concerns that further weakness may soon develop surrounding this Friday's Cattle on Feed report. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.09 with a weighted average of $67.24 on 8,354 head. December corn is up 7 cents per bushel and December soybean meal is up $1.30 per ton. The Dow Jones Industrial Average is down 36 points, and the NASDAQ is up 124 points.
LIVE CATTLE:
Live cattle futures pulled back from six-week highs Monday as traders slowly but systematically backed away from the market. The ability to test the 100-day moving average at the end of last week did help spark some expectations of further gains. But active pressure in feeder cattle futures and continued sideways movement in beef values has limited active buyer interest for the time being. At current price levels, traders are more than willing to take profits, although there is likely to be some additional protection-taking ahead of Friday's USDA Cattle on Feed report. October live cattle closed $0.52 lower at $125.45, December live cattle closed $0.55 lower at $130.42 and February live cattle closed $0.35 lower at $135. Cash cattle activity remains quiet, which is usual for a Monday. The overall lack of asking prices and bids will likely keep any significant movement to Wednesday or later. Higher cash cattle trade on the 5-area weekly average price helped to limit underlying pressure for the week ahead with last week's average moving 88 cents higher to $123.84 per cwt.
Monday's slaughter is estimated at 120,000 head -- 1,000 less than a week ago and 2,000 more than year-ago totals.
Boxed beef prices closed lower: choice down $0.15 ($280.09) and select down $0.81 ($259.81) with a movement of 115 loads (48.97 loads of choice, 30.83 loads of select, 20.89 loads of trim and 14.39 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Quiet activity from both sides Monday will likely push active trade to midweek or later. Some interest may start to develop Tuesday, but it is not expected to be enough to give a good test to the market.
FEEDER CATTLE:
Strong pressure developed Friday as traders continue to back away from last week's market highs. Triple-digit losses were seen in all nearby contracts with the November futures contract leading the complex lower with a $2.07-per-cwt loss. Combined losses over the last two days are nearing $2.50 to $3 per cwt in all nearby contract months, as traders had a hard time finding underlying support at this point. With November and January futures falling below $160 per cwt, additional negative pressure may continue to develop as traders return to the complex Tuesday. October feeders closed $1.82 lower at $155.75, November feeders closed $2.07 lower at $159.35 and January futures closed $1.97 lower at $159.55. The CME feeder cattle index 10/15/2021: $153.90, up $0.65.
LEAN HOGS:
A two-day market shift higher has now developed in lean hog futures. This helped create increased underlying support through the entire complex. But given the fact that markets are still near October lows, it is going to take more consistent buyer interest to draw additional traders back into the market. A portion of the price support is expected to have filtered over from the erosion in cattle trade, as many feel the lean hog complex remains well oversold and is ripe for a moderate to firm upward shift in the near future. December lean hogs closed $0.47 higher at $78.75, February lean hogs closed $0.45 higher at $81.77, and April lean hog futures closed $0.50 higher at $85.67. Pork prices slipped lower following mixed primal cut moves in a moderate price range. Pork cutouts totaled 344.75 loads with 301.81 loads of pork cutouts and 42.94 loads of trim. Pork cutout values: down $0.54, $100.78. Monday's slaughter is estimated at 478,000 head -- 1,000 higher than a week ago and a year ago. The CME lean hog index 10/15/2021: down $0.71, $86.88.
TUESDAY'S CASH HOG CALL: Steady. Despite stability in futures and pork values, it appears that cash values are still having a hard time turning the corner and posting consistent gains at this point.
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