GENERAL COMMENTS:
It was an exceptional day for the livestock complex as the markets were able to close higher and Friday's Cattle on Feed report ended up being the icing on the cake for an outstanding week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $5.85 with a weighted average of $88.89 on 3,588 head. December corn is up 1/4 cent per bushel and December soybean meal is up $4.60. The Dow Jones Industrial Average is up 748.97 points.
From Friday to Friday, the livestock futures scored the following changes: October live cattle up $3.53, December live cattle up $4.65; October feeder cattle up $1.47, November feeder cattle up $3.57; December lean hogs up $6.88, February lean hogs up $7.10; December corn down $0.05, March corn down $0.06.
LIVE CATTLE:
What a powerful week it was for the live cattle complex! The sheer combination of stronger cash cattle trade, a bullish Cattle on Feed report, excellent boxed beef demand and a supportive futures complex is one strong force to be reckoned with. Cattle producers have known for a long time that the market's fundamentals were going to turn favorable to their position, but it wasn't until this last week that traders finally seemed willing to buy in and support that notion. With the December live cattle contract carving out a new contract high and cash cattle selling for $3.00 higher in the South and $4.00 higher in the North, it's hard telling where the top to this market will be. December live cattle closed $0.75 higher at $152.42, February live cattle closed $0.67 higher at $155.52 and April live cattle closed $0.67 higher at $158.25. Throughout the week, Southern cattle traded for $148, which is $3.00 higher than last week's weighted average, and Northern dressed cattle traded for $236, which is $4.00 higher than last week's weighted average.
Friday's slaughter is estimated at 122,000 head, 8,000 head more than a week ago and year ago. Saturday's slaughter is projected to be 42,000 head. This week's slaughter is estimated at 673,000 head, 13,000 head more than a week ago and 11,000 head more than a year ago.
Fresh beef imports into the country totaled 18,520 metric tons with Canada, Mexico and Australia being the largest importers. Year to date, the country has imported 943,000 metric tons of fresh beef, which is 6% higher than a year ago.
Boxed beef prices closed higher: choice up $0.09 ($253.71) and select up $2.28 ($224.36) with a movement of 94 loads (48.55 loads of choice, 19.28 loads of select, 13.30 loads of trim and 13.19 loads of ground beef). Throughout the week choice cuts averaged $251.93 (up $5.62 from last week) and select cuts averaged $221.90 (up $7.16 from last week) with a movement of 675 loads of cuts, grinds and trim.
MONDAY'S CASH CATTLE CALL: Higher. With packers not able to buy as many cattle in the North as they hoped for, next week's market will be higher, but the real question is how much higher?
FEEDER CATTLE:
The feeder cattle complex managed to close higher as the market clung to the support that seeped over from the live cattle market, as it celebrated cash cattle trading higher and the December live cattle contract closing at a new high. The market was keenly watching the corn complex as, even though the bullish news from the live cattle sector is encouraging, it can easily be overcome and outweighed by higher trade in the grain sector. As mentioned earlier, the feeder cattle complex will likely continue to try to trade higher as its live cattle counterpart is doing so vigorously, but it's going to take some time before the feeder cattle market can trade in the same vigorous manner as cattle buyers simply need to see more margin in their business before they'll get excited. November feeders closed $0.80 higher at $178.35, January feeders closed $1.12 higher at $180.37 and March feeders closed $0.80 higher at $182.25. Oklahoma Weekly Cattle Auction Summary shared that, throughout the entire state, and when compared to last week, feeder steers traded mostly steady, but there were instances where feeder steers traded $8.00 higher. Feeder heifers traded $2.00 to $6.00 stronger. Steer calves sold $2.00 to $6.00 higher and heifer calves sold steady to $4.00 higher. Slaughter cows sold mostly steady to $2.00 lower, with the biggest decline on breaker cows. Slaughter bulls traded mostly steady. Feeder cattle supply over 600 pounds was 43%. The CME Feeder Cattle Index for Oct. 20: unavailable at this time.
LEAN HOGS:
It was a tremendous week for the lean hog complex and Friday's trade did not lay down on the job whatsoever. Throughout the day, the market traded higher and closed well above nearby resistance levels, seeming to prove to the market that fundamental support is plentiful enough to justify breaking out and trading higher. December lean hogs closed $2.10 higher at $89.12, February hogs closed $1.42 higher at $90.52 and April lean hogs closed $0.72 higher at $93.85. Pork cutout values did see a slight drop off in Friday's afternoon report, but that largely came as bellies dropped $10.12 lower, and picnics closed $5.95 lower. Throughout the earlier part of the week, demand was strong and helped elevate not only pork cutout values but also the future complex. Pork cutouts total 334.43 loads with 297.73 loads of pork cuts and 36.70 loads of trim. Pork cutout values: down $2.93, $100.94. Friday's slaughter is estimated at 478,000 head, 5,000 head more than a week ago and year ago. Saturday's slaughter is projected to be around 145,000 head. The CME Lean Hog Index for Oct. 19: up $0.56, $93.76.
MONDAY'S CASH HOG CALL: Lower. The cash market will likely start out lower as it usually does, but then by Tuesday or Wednesday the market should see more interest arise from packers.
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