GENERAL COMMENTS:
The cattle contracts climbed higher through Wednesday's end as the market's underlying bullish tone charged traders into action and helped them push the contracts substantially higher. The lean hog complex didn't see the same type of energy throughout it's market as traders long to see more consistent fundamental support. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.94 with a weighted average price of $79.13 on 7,496 head. December corn is down 1/4 cent per bushel and December soybean meal is up $1.60. The Dow Jones Industrial Average is down 198.78 points.
LIVE CATTLE:
The live cattle complex took Wednesday by storm and surpassed last week's high. Traders boldly moved the nearby contracts $2.00 higher, while the rest of the market closed mostly $1.00 higher. Come Thursday, traders will be pressured to either support Wednesday's bullish move or to back off and let the contracts drift lower again. October live cattle closed $2.75 higher at $182.70, December live cattle closed $2.35 higher at $186.50 and February live cattle closed $1.90 higher at $190.37. There was a little big of cash cattle trade in the North at $288, but largely the market is still waiting to trade. Asking prices in the South remain firm at $180 plus and are still elusive in the North.
Wednesday's slaughter is estimated at 126,000 head, 1,000 head less than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed lower: choice down $1.91 ($313.57) and select down $1.93 ($287.61) with a movement of 152 loads (70.51 loads of choice, 28.41 loads of select, 30.74 loads of trim and 22.36 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. This week's market will again be a battle of the minds between packers and feedlots wanting different outcomes in the cash complex.
FEEDER CATTLE:
The feeder cattle complex kept with its rallying nature through Wednesday's end as the market applauded the mostly steady close in the corn complex and was elated to see the stronger close in the live cattle contracts. September feeders closed $1.77 higher at $253.15, October feeders closed $2.17 higher at $256.47 and November feeders closed $2.00 higher at $258.20. So long as feeders continues to see support from the live cattle/cash cattle markets, the market could elect to pressure resistance later this week. A OKC West Livestock Auction in El Reno, Oklahoma, compared to last week feeder, steers sold mostly steady to $1.00 higher with the exception of the cattle over 900 pounds selling $1.00 to $3.00 lower. Feeder heifers traded fully steady. Steer and heifer calves that were weaned sold $2.00 to $3.00 lower. The bulk of this week's offering was unweaned or short weaned bawling calves. Feeder cattle supply over 600 pounds was 74%. The CME Feeder Cattle Index for Sept. 5: down $0.32, $247.49.
LEAN HOGS:
The lean hog complex wasn't as vigorous throughout Wednesday's market as the cattle contracts were, even though the market saw moderate support fundamentally. Traders were aggressive last week in rallying the contracts, but now as they evaluate the futures complex, seeing stable and consistent fundamental support is essential if they're going to maintain these technical levels. The belly wasn't to blame in Wednesday afternoon's weaker cutout close, as it was the picnic (down $6.82) and the rib (down $2.12), which saw the biggest losses day over day. The cash market did see packers buy close to 7,500 head which is noteworthy given little they've supported the market as of late. October lean hogs closed $1.30 lower at $81.87, December lean hogs closed $0.62 lower at $74.45 and February lean hogs closed $0.37 lower at $78.47. Pork cutouts totaled 284.92 loads with 237.07 loads of pork cuts and 47.85 loads of trim. Pork cutout values: down $0.54, $98.33. Wednesday's slaughter is estimated at 480,000 head - 7,000 head more than a week ago and 7,000 head less than a year ago. Tuesday's slaughter was also revised to 470,000 head. The CME Lean Hog Index for Sept. 4: down $1.21, $86.56.
THURSDAY'S HOG CALL: Steady to somewhat higher. Packers did show the cash market fairly good interest throughout the day, but it's likely that they still need more hogs which could either keep prices steady on Thursday or push them slightly higher.
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