GENERAL COMMENTS
The livestock complex is buzzing as the live cattle, feeder cattle and lean hog contracts are all trading higher and the interest in the cash markets is strong as well. Heading into Wednesday's afternoon trade, feedlots are itching to push packers into paying higher prices than what they've offered this morning. December corn is down 8 3/4 cents per bushel and December soybean meal is up $1.80. The Dow Jones Industrial Average is down 101.91 points and NASDAQ is up 22.32 points.
LIVE CATTLE
The momentum is continuing to build throughout the live cattle sector as cash cattle bids have been offered throughout the five-area trading region at $128 and bids of $202 have been offered in Nebraska for dressed cattle. Packers are desperate to get cattle procured and are appearing to need to do so quickly. Thankfully, the continued support from strengthening boxed beef prices is giving the market more gusto to add to the rally, and the board is seeing all the fundamental support it's needed to confidently trade higher. December live cattle are up $2.45 at $132.40, February live cattle are up $1.87 at $137.10 and April live cattle are up $1.57 at $139.75. Wednesday's slaughter is expected to be north of 120,000 head which is solidifying the assumption that this week's slaughter will be greater than 660,000 head.
The Fed Cattle Exchange Auction listed a total of 1,752 head, of which 289 actually sold, 194 were scratched from the auction and 1,269 head were listed as unsold, as they did not meet the reserve prices,that ranged from $128 to $130. Opening prices ranged from $126.75 to $127.50 high bids ranged from $127.50 to $128.50. The state-by-state breakdown looks like this: Texas 1,488 total head, with 289 head sold at $128.50, and 1,199 head went unsold; Kansas 194 total head, all of which were scratched from the auction; California 70 total head, of which went unsold.
Boxed beef prices are higher: choice up $1.32 ($288.70) and select up $1.15 ($267.28) with a movement of 87 loads (40.13 loads of choice, 20.03 loads of select, 18.22 loads of trim and 8.16 loads of ground beef).
FEEDER CATTLE
It's a sweet, sweet feeling for the feeder cattle contracts to see the momentum that's driving the live cattle market higher, all while the corn market endures a $0.06 to $0.08 regression in its nearby contracts. The market has been dying to trade higher as the cattle market has grown ripe for a rally, but until the corn market's rally subsided, rallying wasn't an option. Thankfully, traders seem to be on board with shooting the market higher as technically the contracts sit without any nearby resistance. November feeders are up $2.10 at $159.67, January feeders are up $2.90 at $159.92 and March feeders are up $2.60 at $160.60.
LEAN HOGS
The lean hog market isn't wanting to trade lower even though the hype of the livestock complex surrounds the cattle contracts. Tuesday afternoon pork cutout values saw a slightly higher close, which seems to be helping aid Wednesday's modest rally. Packers have been active in the day's cash market as they've bought over 7,000 head thus far in the day and have been aggressive enough in doing so that they even pushed cash prices slightly higher. December lean hogs are up $1.15 at $75.40, February lean hogs are up $1.17 at $78.32 and April lean hogs are up $1.10 at $82.42. In the hog complex, there's a lot that can change from morning to afternoon, so seeing how the afternoon's cutout values fare will be critical. If the market is able to close positively by the day's end, the next hurdle is Thursday's export report.
The projected lean hog index for Nov. 2 is down $0.34 at $78.70, and the actual index for Nov. 1 is down $0.12 at $79.04. Hog prices are higher on the National Direct Morning Hog Report, up $0.33 with a weighted average of $60.69, ranging from $59.50 to $61.75 on 7,457 head. Pork cutouts total 243.24 loads with 223.42 loads of pork cuts and 19.82 loads of trim. Pork cutout values: up $1.46, $93.90.
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