GENERAL COMMENTS:
It was a brutal day for the livestock complex as the contracts turned lower across all three markets largely thanks to the likelihood that a government shutdown could occur. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.66 with a weighted average price of $76.88 on 7,201 head. December corn is down 1 1/2 cents per bushel and December soybean meal is up $2.90. The Dow Jones Industrial Average is down 377.06 points.
LIVE CATTLE:
Tuesday's market wasn't the outcome that any bull-spreader likes to see, but with interest rates likely to go higher later this year and the looming concern of a government shutdown, traders all but closed up shop through Tuesday's market and let the contracts sink lower as they pleased. October live cattle closed $2.17 lower at $184.80, December live cattle closed $2.75 lower at $188.47 and February live cattle closed $2.85 lower at $193.05. The market's downturn was aggressive enough that it broke through the nearby support plane which had kept the December contract trading mostly steady. Feedlot managers look at today's weaker close and hope that they can keep cash cattle prices at least steady given that packers have built up some supply around them. No cash cattle trade developed throughout the day, and it's likely that trade is delayed until Wednesday afternoon or Thursday. Asking prices in the South are noted at $186 plus. Tuesday's slaughter is estimated at 128,000 head -- 1,000 head more than a week ago and 1,000 head less than a year ago.
WEDNESDAY'S CATTLE CALL: Steady. If trade does begin to develop as early as Wednesday, prices will likely remain steady this week as the negative turn in the futures complex makes it harder for feedlots to get anything better at this point.
Boxed beef prices closed lower: choice down $1.94 ($299.54) and select down $1.35 ($279.10) with a movement of 157 loads (91.37 loads of choice, 34.92 loads of select, 13.38 loads of trim and 16.93 loads of ground beef).
FEEDER CATTLE:
It was a painstaking day for the feeder cattle complex as the market closed substantially lower. The market's widespread despair was seen consistently throughout both the nearby and deferred contracts as $4.00 to $5.00 losses were consistent across the board. Both the October and November 2023 contracts closed below their 40-day moving average. The combination of economic concerns and the possibility of a government shutdown are to blame for the market's weakness. October feeders closed $4.95 lower at $253.87, November feeders closed $5.82 lower at $256.87 and January feeders closed $5.50 lower at $260.10. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week feeder steers sold steady to $2.00 lower and feeder heifers traded $2.00 to $4.00 lower. Steer calves sold $4.00 to $8.00 lower except those weighing under 450 pounds which sold mostly steady. Heifer calves traded $10.00 to $15.00 lower. Un-weaned calves saw the biggest decline as they traded as much as $20.00 back. It was noted in the sale report that most farmers are still busy and in the field which meant that they weren't in the stands buying calves/feeders. Feeder cattle supply over 600 pounds was 54%. The CME feeder cattle index 9/25/2023: down $0.16, $253.90.
LEAN HOGS:
From the widespread technical downturn to the slight drop in pork cutout values, it wasn't necessarily a good day for the lean hog complex. The deferred contracts were able to keep their mildly higher position through the day's end, but the nearby contracts and most of those through 2024 closed lower. The other factor that is slightly unnerving for the lean hog complex is the reality that on Thursday another Hogs and Pigs Report will be released. This isn't an issue, and the insight is helpful, but given that the market is expecting big changes surrounding Prop 12, the report needs studied. October lean hogs closed $0.10 higher at $81.62, December lean hogs closed $0.17 lower at $72.35 and February lean hogs closed $0.35 lower at $75.75. Pork cutouts totaled 360.57 loads with 309.81 loads of pork cuts and 50.76 loads of trim. Pork cutout values: down $0.58, $98.28. Tuesday's slaughter is estimated at 487,000 head -- 3,000 head more than a week ago and 9,000 head more than a year ago. The CME lean hog index 9/22/2023: down $0.38, $86.70.
WEDNESDAY'S HOG CALL: Steady. Packers showed Tuesday's cash market a little more interest and they likely will again on Wednesday, but given the technical downturn, prices won't likely turn much higher.
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