GENERAL COMMENTS:
Firm pressure in all nearby livestock contracts left traders unwilling to actively move into the market with significant volume. Lean hog trade posted the most aggressive losses, with triple-digit losses in all contracts. However, these losses were not enough to offset previous market gains and seemingly is creating more stability in the market with February futures hovering around $80 per cwt. Cattle futures posted moderate losses in nearby contracts, while limited but noticeable buyer support started to redevelop in deferred trade. Hog prices moved lower on the National Direct Afternoon Hog Report in moderate trade, falling $0.27 with a weighted average of $66.97 on 7,593 head. December corn is down 2 1/2 cents per bushel and December soybean meal is up $4.70 per ton. The Dow Jones Industrial Average is up 198 points and NASDAQ is up 107 points.
LIVE CATTLE:
Follow-through selling pressure trickled into live cattle trade Tuesday morning. The early week softness in the complex brought about renewed concerns of further market weakness into the market. Although the live cattle market remains well above support levels and relatively near six-month highs, seller momentum pushed spot contracts back to $125 per cwt, while December futures are hovering at $130 per cwt. The inability to draw active additional buyer support may be limited through the week as the upcoming cattle on feed report is also keeping some traders nervous. On-feed numbers are expected to fall less than 1% from year-ago levels, according to the pre-report estimate. However, if overall cattle numbers are higher than expected, additional market weakness is likely to redevelop next week. October live cattle closed $0.45 lower at $125.00, December live cattle closed $0.40 lower at $130.02 and February live cattle unchanged at $135.00. Cash cattle activity spent another day with undeveloped trade and market activity. A few asking prices are seen in the South at $126 and higher live basis, but Northern asking prices are still undeveloped. Packers have been unwilling to put bids out at this point, which is not unusual. It is uncertain at this point if feeders will be willing to settle for steady money as in the week's past, or will they hold out through the rest of the week, trying to drive prices higher due to packers need to access market-ready cattle.
Tuesday's slaughter is estimated at 121,000 head, 1,000 more than a week ago and 2,000 less than year ago totals.
Boxed beef prices closed higher: choice up $0.79 ($280.88) and select up $1.72 ($261.53) with a movement of 147 loads (96.97 loads of choice, 30.83 loads of select, 7.89 loads of trim and 13.39 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Packer interest is expected to improve through the morning Wednesday, although feeders may be very hesitant to accept initial bids, which could push active trade into Thursday or Friday this week.
FEEDER CATTLE:
Pressure redeveloped in nearby feeder cattle trade Tuesday afternoon following aggressive early week losses. October futures posted the most weakness, falling 65 cents per cwt as traders continue to adjust positions based on short- and long-term direction expectations. Although there still is little consensus of just how much additional supply level will be, the early analyst estimates point to a 1.4% increase over year ago levels. This would continue to put pressure on nearby feeder cattle trade. This is also why moderate buyer support started to trickle into deferred contracts as supplies through the late spring and summer months next year may continue to be decreased. October feeders closed $0.65 lower at $155.10, November feeders closed $0.50 lower at $158.85 and January futures closed $0.32 lower at $159.22. The CME Feeder Cattle Index on Oct. 18: $154.10, up $0.20.
LEAN HOGS:
Triple-digit losses swept through lean hog trade Tuesday as traders unwound previous gains seen over the last two sessions. The overall weakness in several commodity markets and livestock trade in general led to increased buyer apathy. Little to no technical market factors developed Tuesday as traders continue to look for increased direction from both the cash and pork markets but are likely to hold the current trading range through much of October. December lean hogs closed $1.35 lower at $77.40, February lean hogs closed $1.32 lower at $80.45, and April lean hog futures closed $1.27 lower at $84.40. Pork prices slipped lower following active double-digit pressure in belly cuts. Pork cutouts totaled 430.44 loads with 391.62 loads of pork cutouts and 38.94 loads of trim. Pork cutout values: down $1.44, $99.34. Tuesday's slaughter is estimated at 478,000 head, 1,000 higher than a week ago and 12,000 lower than a year ago. The CME Lean Hog Index for Oct. 18: down $0.25, $86.63.
WEDNESDAY'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.
No comments:
Post a Comment