GENERAL COMMENTS
The cattle contracts weren't pleased to see the grain market's momentum throughout Monday's trade, but it didn't seem to affect the lean hog complex. Traders are looking for substantial fundamental support before they'll comfortably push either of the cattle contracts higher. Hog prices closed lower on the Daily Direct Morning Hog Report, down $2.20 with a weighted average of $88.34 on 4,522 head. December corn is up 10 3/4 cents per bushel and December soybean meal is up $2.70. The Dow Jones Industrial Average is down 128.85 points.
LIVE CATTLE:
The live cattle market gapped lower at the day's start and was never able to recover ahead of closing. The market was largely pushed lower as the grain sector sported an aggressive rally all throughout the day. December live cattle closed $0.52 lower at $152.47, February live cattle closed $0.50 lower at $155.82 and April live cattle closed $0.15 lower at $159.07. The market needs to see follow-through fundamental support before it will trade higher technically, but thankfully that support should come later in the week. The cash cattle market is expected to trade higher again this week, and although asking prices are still not established, it wouldn't be surprising to see the market jump $1 to $2 higher yet again. New showlists appear to be mixed, higher in Texas, somewhat higher in Nebraska/Colorado, but lower in Kansas.
Monday's slaughter is estimated at 128,000 head -- 2,000 head more than a week ago and 7,000 head more than a year ago.
Boxed beef prices closed mixed: Choice was up $0.39 ($263.65) and select down $0.03 ($234.46) with a movement of 96 loads (61.58 loads of choice, 25.48 loads of select, zero loads of trim and 9.39 loads of ground beef).
TUESDAY'S CATTLE CALL: Higher. It's unlikely that cattle will begin to trade before Thursday as feedlots want to push the cash cattle market higher while the opportunity presents itself.
FEEDER CATTLE:
The nearby feeder cattle contracts closed lower but the deferred contracts of 2023 (August through October) closed mildly higher. It wasn't a surprise that the feeder contracts closed lower as the market had little support from anywhere as the live cattle contracts closed lower, too, and the corn market sported a $0.09 to $0.10 rally through closing. November feeders closed $0.25 lower at $177.62, January feeders closed $0.92 lower at $179.45 and March feeders closed $1 lower at $181.57. Although it's a long way away and much can happen in the matter between now and then, it is interesting to see that the deferred feeder cattle contracts of 2023 (August through October) all closed above $200 -- hopefully the market is able to capture those times in due time. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week and at the sale's midsession point, feeder steers and heifers were both trading $2 to $3 higher. Feeder cattle supply over 600 pounds was 49%. The CME feeder cattle index for Oct. 28: up $1.63, at $177.48.
LEAN HOGS:
The lean hog complex closed mostly higher even though the market did see some minor pushback in its nearby contracts. December lean hogs closed $1.17 lower at $84.92, February lean hogs closed $0.40 lower at $88.45 and April lean hogs closed $0.90 higher at $93.60. And while the market did have to stomach that pork cutout values ended the day lower, it was encouraging that Monday's slaughter was aggressive as it was and that the ham and rib both closed higher. The lower close in pork cutout values again stems from the fact that the belly took a nosedive and dropped $23.62 lower. Pork cutouts totaled 248.20 loads with 201.63 loads of pork cuts and 46.58 loads of trim. Pork cutout values: down $1.40, $99.94. Monday's slaughter is estimated at 491,000 head -- 8,000 head more than a week ago and 17,000 head more than a year ago. The CME lean hog index for Oct. 27: down $0.38, $93.77.
TUEDSAY'S HOG CALL: Higher. With Monday's slaughter as aggressive as it was, it's likely that packers show the cash market interest early in the week to secure supplies early.
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