GENERAL COMMENTS:
It was another relatively strong day for the livestock complex as the cattle contracts closed higher on the corn market's weakness and on the speculation that cash cattle will indeed trade higher this week. The lean hog complex closed higher too as the cash market saw tremendous support form packers. Come Thursday, the market will be anxious to see the day's export report and to see how packers treat this week's cash cattle market. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.21 with a weighted average of $98.98 on 26,358 head. December corn is down 1 1/4 cents per bushel and December soybean meal is down $6.90. The Dow Jones Industrial Average is up 2.37 points.
LIVE CATTLE:
The live cattle complex seemed to more or less to sit idle throughout Wednesday's market as traders are keenly waiting to see how this week's cash cattle market shakes out. Feedlots are again pushing on packers and trying to get cattle sold for more money, and given how thin front-end supplies are, it's likely that this theme of higher cash trade continues well into December. The market hasn't seen any sizeable business shake out yet, but come Thursday cattle are expected to trade. Southern feedlots have cattle priced at $151 to $152, and live cattle in the North are priced at $155 to $156, but dressed prices are still unestablished. If cash cattle do trade higher again this week, it's likely that we'll see traders push the contracts higher too. December live cattle closed $0.27 higher at $153.57, February live cattle closed $0.32 higher at $157.02 and April live cattle closed $0.32 higher at $159.57.
Wednesday's slaughter is estimated at 129,000 head, 2,000 head more than a week ago and 7,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.57 ($260.86) and select up $1.25 ($228.60) with a movement 150 loads (75.94 loads of choice, 27.45 loads of select, 20.13 loads of trim and 26.89 loads of ground beef). The choice/select spread sits at 32.26.
THURSDAY'S CATTLE CALL: $2.00 to $3.00 higher. With front-end supplies of market-ready cattle being as thin as they are, packers will likely support this week's cash cattle market again in order to protect themselves from becoming short-bought.
FEEDER CATTLE:
The feeder cattle complex was able to walk out of Wednesday's market with a stronger note as the complex appreciated seeing corn trade lower and absorbed the positive support stemming from the live cattle market and from slightly stronger sales in the countryside. It seems as though this year's feeder cattle run has already come and gone and that buyers who haven't found all the cattle that they need are scratching their head. It's still hard to buy feeders and ensure a profit with feed prices as high as they currently are, but buyers are noting that there aren't nearly as many calves being sold this fall as there was last year. November feeders closed $0.90 higher at $178.82, January feeders closed $1.00 higher at $181.25 and March feeders closed $1.05 higher at $183.05.
At Winter Livestock Auction in Riverton, Wyoming, compared to last week, feeder steers under 500 pounds sold steady but there were instances of $4.00 to $8.00 higher, steers weighing 500 to 700 pounds traded steady with instances of $8.00 to $10.00 higher and $15.00 to $16.00 higher. Heifer calves sold with stronger undertones, and they sold regularly sold for $2.00 to $6.00 higher than last week, but the best advancement was on the heifer calves weighing 550 to 590 pounds as they sold $15.00 higher. Feeder cattle supply over 600 pounds was 17%. The CME Feeder Cattle Index for Oct. 25: up $0.11, $174.96.
LEAN HOGS:
Traders were leery of trading the lean hog complex too aggressively as pork cuts are seeing a little bit of pressure, but traders couldn't help but advance the market mildly as there was tremendous support from packers in the cash sector. December lean hogs closed $0.05 higher at $88.50, February lean hogs closed $0.32 higher at $91.00 and April lean hogs closed $0.22 higher at $94.17. Once again, the market's biggest hit in cutouts came from the belly as it lost $3.69, while the rest of the cuts traded anywhere from $2.00 higher to $2.00 lower. With the calendar getting closer to Thanksgiving and even Christmas, pork demand will likely perk up as Turkey prices are severely inflated. Pork cutouts total 365.68 loads with 320.48 loads of pork cuts and 45.20 loads of trim. Pork cutout values: down $0.75, $97.74. Wednesday's slaughter is estimated at 491,000 head, steady with a week ago and 7,000 head more than a year ago. The CME Lean Hog Index for Oct. 24: up $0.14, $94.81.
THURSDAY'S HOG CALL: Lower. Given that packers have been extremely active in the cash market for two days already this week, it's likely that they'll be less active throughout the remainder of this week's market.
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