GENERAL COMMENTS:
The live cattle, feeder cattle and lean hog contracts fell back as the likelihood of higher interest rates consumed the market and sent prices tumbling. The cash cattle market saw some cattle trade in the South for $143, which is steady with last week's business. Hog prices closed higher on the Daily Direct Afternoon Hog report, up $5.49 with a weighted average of $97.37 on 25,754 head. December corn is up 1 1/4 cents per bushel and December soybean meal is down $3.90. The Dow Jones Industrial Average is down 125.82 points.
LIVE CATTLE:
It was another brutal day for the live cattle complex as the market traipsed lower thanks to unwavering economic concerns. October live cattle closed $0.10 higher at $143.57, December live cattle closed $0.45 lower at $146.90 and February live cattle closed $0.60 lower at $150.85. Some feedlots have their commodities already bought and operating loans secured for the upcoming feeding months, but at some point, all will have to go back into their bank's office and sit down to discuss next year's loans and what that loan's interest rate will be, which is what's weighing heavily on cattlemen in all sectors of the business right now. The cash cattle market saw a light trade develop in parts of the South for $143, which is steady with last week's business. Some Southern feedlots are remaining firm in their $145 asking price, and still asking prices in the North are unknown. More business is expected to develop on Wednesday, but with packers having bought over 116,000 head least week, they may be less aggressive in this week's market.
Tuesday's slaughter is estimated at 128,000 head, steady with a week ago and 9,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $0.59 ($248.43) and select down $2.14 ($221.21) with a movement of 171 loads (81.64 loads of choice, 51.07 loads of select, 14.25 loads of trim and 24.42 loads of ground beef). The choice/select spread sits at $27.22.
WEDNESDAY'S CASH CATTLE CALL: Steady. With the immense technical sellout that the market is currently seeing, it's likely that packers try to keep prices steady.
FEEDER CATTLE:
The feeder cattle complex didn't stand a chance at rounding out the day higher by Tuesday's end, as the market faced pushback from the economy's frightened state, from the corn complex's mild gain before closing and from some pressure in the countryside as bawling calves are seeing hesitancy from buyers. October feeders closed $0.95 lower at $176.12, November feeders closed $0.77 lower at $176.27 and January feeders closed $0.92 lower at $176.80. At Blue Grass Stockyards in Lexington, Kentucky, compared to last week, feeder steers sold $2.00 to $5.00 lower with freshly bawling calves facing the deepest discounts. Many new crop, bawling, short-weaned calves hit the market and buyers unarguably showed preference for long-weaned calf packages. Feeder heifers sold $2.00 to $5.00 higher with some three-weights selling for as much as $10.00 higher. Slaughter cows traded steady to $1.00 lower and slaughter bulls sold steady. Feeder cattle supply over 600 pounds was 50%. The CME Feeder Cattle Index for Sept. 26: down $0.90, $177.82.
LEAN HOGS:
The lean hog complex endured yet another brutal trading day as the December contract fell to prices not seen since last December. October lean hogs closed $1.67 lower at $88.70, December lean hogs closed $3.15 lower at $76.25 and February lean hogs closed $3.30 lower at $80.35. The fundamental side of the market saw mixed reviews as pork cutout prices closed lower -- which could draw in more buying from dollar-savvy consumers -- but slaughter speeds and the cash market both saw excellent support. Given that the market has so much outside influence right now that's driving prices lower, the fact that Thursday will unveil another Quarterly Hogs and Pigs report hasn't gotten much attention from market participants. In trying to gauge the long-term trajectory of the market, Thursday's report will be key in seeing where current inventories. Pork cutouts totaled 374.88 loads with 328.30 loads of pork cuts and 46.57 loads of trim. Pork cutout values: down $2.45, $99.01. Tuesday's slaughter is estimated at 483,000 head, 2,000 head less than a week ago and but 12,000 head more than a year ago. The CME Lean Hog Index for Sept. 23: down $0.60, $96.99.
WEDNESDAY'S CASH HOG CALL: Lower. Given that packers were aggressive in both Monday's and Tuesday's market, one would be led to believe that they're needs are mostly met and that they'll be less aggressive in the second half of the week. Then again, it's extremely unusual for packers to support the hog market on Mondays, which could mean that they're short bought and needing to buy up inventory.
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