GENERAL COMMENTS:
Traders handled the cattle contracts hesitantly throughout Tuesday's market as they're needing to see follow-through support fundamentally before they'll push the contracts any higher. The lean hog market closed higher as traders felt like the demand in the cash sector was strong enough to justify a higher close. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $7.59 with a weighted average of $96.77 on 16,836 head. December corn is up 4 3/4 cents per bushel and December soybean meal is up $6.90. The Dow Jones Industrial Average is up 337.12 points.
LIVE CATTLE:
The live cattle complex traded mixed throughout Tuesday morning, but as the afternoon went on, the market ended up closing fully lower. December live cattle closed $0.82 lower at $153.30, February live cattle closed $0.27 lower at $156.70 and April live cattle closed $0.17 lower at $159.25. It isn't that traders are second guessing their decision to trade the market higher, but rather that they're looking for reassurance in this week's market that prices are going to trade higher again. Throughput has been extremely aggressive early this week and the boxed beef complex continues to fan the market higher as demand has been excellent. It's unlikely that the cash cattle market will trade before Thursday as feedlots sit in the driver's seat on the market and will likely set out to move prices $1.00 to $2.00 higher again this week. Asking prices are noted in the South at $151 to $152 but are still unestablished in the North.
Tuesday's slaughter is estimated at 129,000 head, 1,000 head more than a week ago and 5,000 head more than a year ago.
Boxed beef prices closed higher: choice up $3.51 ($261.43) and select up $1.74 ($227.35) with a movement of 149 loads (93.33 loads of choice, 27.81 loads of select, 12.07 loads of trim and 15.63 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Higher. The market is mostly likely to trade higher again this week, but the real question is: How much higher?
FEEDER CATTLE:
With the corn complex closing $0.04 higher in its nearby contracts and with the live cattle market lending little to no support throughout Tuesday's market, the feeder cattle contracts traipsed lower. November feeders closed $1.22 lower at $177.92, January feeders closed $1.70 lower at $180.25 and March feeders closed $1.82 lower at $182.00. The countryside is seeing a little bit better demand for calves and feeders but they're being particular about the type and kind that they're buying as absorbing a high death loss isn't something most can do with margins as thin as they are. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, steer and heifer calves that were weaned with multiple rounds of shots sold $2.00 to $4.00 higher. But the remainder of the sale sold mostly steady. Feeder cattle supply over 600 pounds was 20%. The CME Feeder Cattle Index for Oct. 24: up $1.23, $174.85.
LEAN HOGS:
The lean hog complex closed higher even though the market traded mixed throughout the earlier part of the day. The combination of a large volume of sales in pork cuts amid a strong test in the cash market helped offset the lower price in pork cutout values. Once again, pork cutouts were pulled lower as bellies dropped $13.89, which is again likely because of the large surplus in cold storage. Otherwise, the pork cuts closed mildly lower which just minor $1.00 to $2.00 losses seen throughout the various cuts. December lean hogs closed $0.52 higher at $88.45, February lean hogs closed $0.22 higher at $90.67 and April lean hogs closed $0.05 higher at $93.95. Pork cutouts totaled 416.02 loads with 377.45 loads of pork cuts and 38.57 loads of trim. Pork cutout values: down $3.44, $98.49. Tuesday's slaughter is estimated at 490,000 head - 15,000 head more than a week ago and 13,000 head more than a year ago. Monday's hog slaughter was revised to 483,000 head. The CME Lean Hog Index for Oct. 21: up $0.62, $94.67.
WEDNESDAY'S HOG CALL: Higher. Packers showed strong interest in Tuesday's market, but they likely didn't get enough hogs bought to sit idle in Wednesday's market.
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