GENERAL COMMENTS:
It was another invigorating day for the livestock complex as traders pushed the contracts higher and cheaper corn allowed for the markets to do so easily. Heading into Thursday, export data will be highly sought after again. Hog prices closed higher on the Daily Direct Afternoon Hog Report up $3.67 with a weighted average of $97.52 on 19,709 head. December corn is down 2 3/4 cents per bushel and December soybean meal is down $0.10. The Dow Jones Industrial Average is down 99.99 points.
LIVE CATTLE:
Feedlots have waited for their day to come back around, and now that they sit in the driver's seat of the cash cattle market, you can all but hear them saying, "show me the money" to packers who come along tire kicking the market. In a market where front-end supplies are current and beef demand is strong -- feedlots aren't worried about rolling cattle over to the next week if they don't get the price they need/want. There were a few head that traded Wednesday afternoon: Texas and Kansas sold some cattle for $147 and Iowa let some go for $234, but neither sold enough to say that any sort of trend could be estimated for the week. Asking prices for cattle remain firm at $148-plus in the South and $237-plus in the North. October live cattle closed $0.87 higher at $149.35, December live cattle closed $1.57 higher at $151.35 and February live cattle closed $1.47 higher at $154.25.
Wednesday's slaughter is estimated at 127,000 head, 1,000 head less than a week ago but 4,000 head more than a year ago.
Boxed beef prices closed higher: choice up $2.61 ($253.39) and select up $0.91 ($222.19) with a movement of 155 loads (76.93 loads of choice, 34.39 loads of select, 17.53 loads of trim and 25.69 loads of ground beef). The choice/select spread sits at $31.20.
THURSDAY'S CASH CATTLE CALL: Higher. Feedlots know that packers need cattle and won't likely be willing to accept steady money.
FEEDER CATTLE:
The feeder cattle complex was again able to close higher as the corn market continues to trend lower and the live cattle complex is keeping with its stronger tones. There were a few head of fats that traded in Nebraska, but largely the market remains untested as feedlots are trying to push the market even higher. For feeder cattle buyers who are having to look at breakevens, seeing more strength develop in the fat cattle market is encouraging as they need all the help they can get with feed prices as expensive as they are. October feeders closed $0.40 higher at $175.22, November feeders closed $0.25 higher at $178.07 and January feeders closed $0.87 higher at $180.07. At Huss Livestock Market in Kearney, Nebraska, compared to last week, steer calves over 500 pounds sold $3.00 to $6.00 higher and heifer calves over 400 pounds traded steady to $2.00 higher. Feeder cattle supply over 600 pounds was 48%. The CME Feeder Cattle Index for Oct. 18: down $0.24, $172.03.
LEAN HOGS:
The lean hog market continues to run higher as the complex has captured traders' full attention as it's been able to run aggressively without the worry of running into resistance. But now that the market nears $88.00, traders will look to the market's fundamentals to determine if breaking through the resistance is a sound decision. Cash prices and packer demand has been excellent this week, but over the last two days, pork cuts have closed lower. Wednesday's decline in pork cutout values largely comes from the $8.72 decline in the belly. If the market sees a supportive export report Thursday morning, then it should have no problem continuing its upward trend. But if the complex sees little export interest, then traders could take a more cautious approach. December lean hogs closed $0.90 higher at $87.37, February lean hogs closed $1.20 higher at $89.00 and April lean hogs closed $1.00 higher at $92.75. Pork cutouts total 304.98 loads with 252.11 loads of pork cuts and 52.86 loads of trim. Pork cutout values: down $1.37, $101.30. Wednesday's slaughter is estimated at 491,000 head, steady with a week ago and 12,000 head more than a year ago. Tuesday's slaughter was revised to 475,000 head. The CME Lean Hog Index for Oct. 17: down $0.16, $93.19.
THURSDAY'S CASH HOG CALL: Lower. Given that packers have been aggressive for now two days this week, it's likely that they're mostly done procuring hogs for the week and will show Thursday's market less interest.
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