GENERAL COMMENTS:
Thursday started the day off strong with a good export-sales report for both the cattle and hog markets. As the day progressed, the cash cattle market saw strong interest develop in the South but Northern feedlots remained committed to their asking prices and have yet to really see much trade develop in their region. Come Friday, the market will be watching for more cash cattle trade and for the afternoon's Cattle on Feed report. December corn is up 5 3/4 cents per bushel and December soybean meal is up $11.60. The Dow Jones Industrial Average is down 90.22 points.
LIVE CATTLE:
What a day it was the live cattle complex. As the market rounded out Thursday's trade and heads toward Friday, traders are nearing the market's short-term resistance, the cash market has successfully traded cattle in the South for $3.00 higher than last week's weighted average while the North has yet to really trade cattle and boxed beef prices have seen excellent demand this week. With that being said, Friday's market will be one to watch as there needs to be more cattle traded in the North. There were a few cattle that sold in the North for $150 to $152, but largely that market is still undeveloped. If packers opt to side idle this week, that only means that next week they'll have to be that much more aggressive as freight is too expensive right now to truck Southern cattle North. Southern cattle began to trade around the noon hour for $148 which is $3.00 stronger than last week's weighted average. December live cattle closed $0.32 higher at $151.67, February live cattle closed $0.60 higher at $154.85 and April live cattle closed $0.27 higher at $157.57. Thursday's slaughter is estimated at 128,000 head, 1,000 head more than a week ago and 6,000 head more than a year ago.
Beef net sales of 16,600 mt for 2022 were primarily for South Korea (7,100 mt), Japan (3,600 mt) and China (2,000 mt).
Thursday's actual slaughter data shared that for the week ending Oct. 7, steers averaged 920 pounds, which is 3 pounds heavier than a week ago and one pound less than a year ago. For the same week, heifers averaged 843 pound, which is 3 pounds more than the previous week and four pounds more than a year ago.
Boxed beef prices closed mixed: choice up $0.23 ($253.62) and select down $0.11 ($222.08) with a movement of 178 loads (111.83 loads of choice, 28.02 loads of select, 11.24 loads of trim and 26.73 loads of ground beef). The choice/select spread sits at $31.54.
FRIDAY'S CASH CATTLE CALL: Higher in the North, steady in the South. Given that cattle have yet to really trade in the North, packers will need to up their bids if they're going to get Northern cattle bought this week.
FEEDER CATTLE:
Even with the Southern Plains trading cattle for $3.00 higher in the cash market and the live cattle contracts closing mostly higher, the feeder cattle complex waned lower as the corn market grew stronger. Even if the live cattle complex starts on a higher trek from now into 2023, it will likely be a while before the feeder cattle market can really comfortably trade higher as the market needs to see more profitably. November feeders closed $0.52 lower at $177.55, January feeders closed $0.82 lower at $179.25 and March feeders closed $0.87 lower at $181.45. At Farmers and Ranchers Livestock Commission in Salina, Kansas compared to last week a weaker tone was noted on calves weighing less than 650 pounds. Steers weighing 750 to 850 pounds traded $2.00 higher, and steers weighing 900 pounds traded $6.00 higher. Heifers over 750 pounds sold $5.00 higher. Feeder cattle supply over 600 pounds was 81%. The CME Feeder Cattle Index for Oct. 19: is unavailable at this time.
LEAN HOGS:
It was disappointing to again see that both pork cutout values and cash prices were unavailable due to packer submission issues. Nevertheless, the futures complex had a relatively strong day as all of the contracts closed higher except the spot December contract. With December lean hogs up against resistance, the market needs to see phenomenal support in order to justify breaking through resistance. It's likely that the market remains steady or trades slightly lower until next week to avoid making that decision ahead of the weekend. December lean hogs closed $0.35 lower at $87.02, February lean hogs closed $0.10 higher at $89.10 and April lean hogs closed $0.37 higher at $93.12. The CME Lean Hog Index for Oct. 18: up $0.01, $93.20. Thursday's slaughter is estimated at 491,000 head, steady with a week ago and 19,000 head more than a year ago.
Pork net sales of 40,800 mt for 2022 were primarily for Mexico (14,800 mt), Japan (11,000 mt) and Australia (3,500 mt).
FRIDAY'S CASH HOG CALL: Lower. Given that packers were aggressive buyers earlier this week, they'll likely show little interest to the cash market come Friday.
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