GENERAL COMMENTS:
The live cattle contracts closed lower but the market's fundamentals continue to beg for higher prices. Before the week is all said and done, it's likely that the cash cattle market achieves higher prices again this week and that the futures market comes around once follow-through support is seen in the cash market. The feeder cattle contracts battled a rallying corn market throughout Monday's trade and the hog market continues see lower cash prices and a weakening cutout value. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.67 with a weighted average of $61.03, ranging from $60.00 to $62.50 on 5,895 head.
LIVE CATTLE:
Boxed beef prices closed higher, Monday's slaughter was above 120,000 head and showlists are lighter throughout the nation -- one can undoubtedly say that the market's fundamentals are begging for higher trade. With last week's sporty advancement of $2.00 to $4.00 higher throughout the cash market, feedlots are expected to price cattle higher again this week and will more than likely find that packers are still interested. Last week's negotiated cash cattle trade totaled 103,877 head. Of that, 89% (92,797 head) were purchased for the nearby delivery, while the remaining 11% (11,080 head) were purchased for the deferred delivery in the following 15 to 30 days. It's become nearly unheard of to see a cash volume above 100,000 head, so last week's movement once again comes to show just how short-bought packers are. There wasn't any trade to speak of throughout Monday, and it's likely that trade will hold off until Wednesday or even later in the week. December live cattle closed $0.42 lower at $128.85, February live cattle closed $0.32 lower at $133.90 and April live cattle closed $0.50 lower at $136.72.
Boxed beef prices closed higher: choice up $1.86 ($287.58) and select up $1.02 ($264.39) with a movement of 82 loads (50.55 loads of choice, 15.40 loads of select, 7.82 loads of trim and 8.02 loads of ground beef).
Monday's slaughter is estimated at 121,000 head, 1,000 head less than a week ago and 1,000 head more than a year ago.
TUESDAY'S CASH CATTLE CALL: Higher. It's unlikely that the market will see much cash cattle interest before Wednesday, but when the market does begin to trade higher prices are fully expected. Achieving $2.00 to $3.00 higher shouldn't be out of the question.
FEEDER CATTLE:
It was a tough Monday for the feeder cattle contracts as the corn market posted a sporty rally gaining anywhere from $0.07 to $0.10 in the nearby contracts and the live cattle market's strength seen earlier in the day subsided by the day's end. The live cattle market is anticipated to trend higher in the next couple of weeks with fundamental factors all supporting higher trade for the market, but the feeder cattle contracts will unfortunately have to continue monitoring the corn market's gusto. If corn prices continue to scale higher than the market's technical upside potential is limited. Meanwhile throughout the countryside, various groups of cattle are still ringing the bell. Light weight calves that haven't been long-weaned aren't demanding much attention throughout the western states as they are easy to come by, but replacement quality heifers and yearlings are still demanding attention when they come across the scales.
November feeders closed $2.17 lower at $154.40, January feeders closed $3.40 lower at $152.72 and March feeders closed $3.17 lower at $154.22. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to last week, feeder steers sold unevenly steady expect those weighing 750 to 800 pounds which sold $11.00 to $13.00 higher, and those weighing 1,050 to 1,100 pounds which sold $2.00 to $4.00 higher. The CME Feeder Cattle Index for Oct. 29: up $0.68, $156.56.
LEAN HOGS:
It's hard to get behind the hog market's rally when cash hog prices and pork cutout values closed lower, but to shine some light where the market did succeed, Monday's slaughter was more aggressive than what the day was initially projected to yield. At this point, weaker slaughter speeds remain to be one of the biggest hinderances to the market, so whenever packers can run a slightly more aggressive day than expected, it's positive. Nevertheless, Monday's market continued to rally on the shirttails of last week's supportive wave but it's not likely that this rally will withstand the test of time. December lean hogs closed $0.07 higher at $76.15, February lean hogs closed $0.12 higher at $78.80 and April lean hogs closed $0.32 higher at $82.37. Pork cutouts total 335.92 loads with 295.55 loads of pork cuts and 40.37 loads of trim. Pork cutout values: down $4.08, $92.44. Monday's slaughter is estimated at 481,000 head, 3,000 head more than a week ago and 11,000 head less than a year ago. The CME Lean Hog Index for Oct. 28: down $0.81, $79.89.
TUESDAY'S CASH HOG CALL: Lower. With there being plenty of hogs around for packers to purchase and not a big incentive waiting them in cutout values, cash prices will likely be lower.
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