GENERAL COMMENTS:
The livestock futures markets are mostly quiet through the first part of Wednesday's trading session, but outside market fireworks could spill over into the last five minutes of trade after the Federal Reserve's new interest rate target is announced in the afternoon. Live cattle futures contracts are staying off their fresh highs, feeder cattle futures are correcting some of Tuesday's losses, and lean hog futures are mostly lower. December corn is down 7 1/2 cents per bushel, and December soybean meal is down $0.70. The Dow Jones Industrial Average is up 171 points.
LIVE CATTLE:
Live cattle futures have been quietly mixed Wednesday morning as most outside markets take a breath after Tuesday's more volatile day. October live cattle are down $0.125 at $146.175, December live cattle are up $0.125 at $151.20, and February live cattle are up $0.20 at $155.40. Most markets are in waiting mode at midday Wednesday, and the cattle market is no exception: waiting for the Federal Reserve's interest rate hike, waiting for Friday's USDA Cattle on Feed report, and waiting for cash cattle trade to get going for the week. So far, cash bids remain elusive, but asking prices are around $145 to $146 in the South ($3 to $4 higher than last week's weighted average) and still not established in the North. The expectation is that trade volume won't develop until Thursday. Slowly eroding boxed beef values will eat away at packers' ability to meet these rising asking prices, despite their obvious desire to keep volumes high.
Wednesday's slaughter is estimated at 128,000 head, which is 1,000 more than a week ago and 8,000 more than a year ago at this time.
Boxed beef prices are mixed Wednesday morning: choice down $1.57 ($250.07) and select up $0.36 ($227.59) with a movement of 119 loads (54.66 loads of choice, 21.11 loads of select, 14.34 loads of trim and 28.69 loads of ground beef).
FEEDER CATTLE:
On the official last day of summer, the feeder cattle market must be looking ahead to the fall calf sales, and knowing that demand will be keen, heading upward to correct Tuesday's big losses. October feeders are up $0.275 at $180.30, November feeders are down $0.075 at $181.20 and January feeders are down $0.20 at $182.70. The CME Feeder Index, reflecting weighted average prices for 700- to 900-lb steers from salebarns across the countryside, has dipped below $180 through the past week, but for many lighter-weight calves, order buyers are still having to write a $2 in front of their bids. And as the upcoming Cattle on Feed report will show, the available calves coming from the droughty West are skewed toward lighter weights.
LEAN HOGS:
Hog futures contracts are consistently lower across the calendar Wednesday morning, although futures trading volume has remained quiet so far. October lean hogs are down $1.15 at $94.825, December lean hogs are down $1.55 at $86.625, and February lean hogs are down $1.30 at $90.85. Traders should be watchful for more frantic trade and have their positions hedged ahead of the last five minutes of trade today, with the Federal Reserve's new target interest rate announcement expected at 2 p.m. Eastern (1 p.m. Central). Now that certain overwhelming export markets are less of a driver for the U.S. pork market, domestic economic health and consumer spending may be a main influence on pork and hog prices, with any threat of recession putting restaurant meals and meat counter purchases in question. But so far, so good from the demand side: Packing plants have been ramping up their hog slaughter pace in recent weeks, and Wednesday's slaughter is estimated to be another big day: 482,000 head, which is 3,000 more than last week and 12,000 more than a year ago at this time.
The projected CME Lean Hog Index for 9/20/2022 is down $0.40 at $97.96, and the actual index for 9/19/2022 was down $0.06 at $98.36. Hog prices were higher again in Wednesday's Daily Direct Morning Hog Report, with the weighted average price $95.28 up $1.02 on 9,010 head. Base prices ranged from $86 to $103.50, bringing the 5-day rolling average to $93.65. Pork cutouts total 155.97 loads with 133.31 loads of pork cuts and 20.66 loads of trim. Pork cutout values: down $4.58, $100.37.
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