GENERAL COMMENTS:
It was another day when the majority of the livestock contracts closed lower thanks to little action fundamentally in the marketplace. Still no major cash cattle trade has developed and, at this point, feedlots seem content waiting however long it takes to get packers to offer up the prices they desire. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.53 with a weighted average price of $79.09 on 12,033 head. December corn is up 5 3/4 cents per bushel and December soybean meal is down $3.30. The Dow Jones Industrial Average is down 75.46 points.
LIVE CATTLE:
The live cattle complex endured a quiet and mundane day when little developed technically and fundamentally. As traders tried to patiently wait for the cash cattle market to trade, they grew tired of carrying all of the market's weight and let the contracts drift lower through Wednesday's end. This isn't necessarily bad news given that the complex is trading at the price points that it is and given that feedlots are expected to hold the market at least steady again this week. Packers will try to keep prices from rallying but given that they've only lightly bought in the cash market over the last three weeks, could mean that they have to support the market more this week than they'd ideally like. October live cattle closed $1.00 lower at $183.15, December live cattle closed $0.60 lower at $187.85 and February live cattle closed $0.25 lower at $192.37. Asking prices in the South are noted at $183 but remain elusive in the North.
Wednesday's slaughter is estimated at 126,000 head, steady with a week ago and 3,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $0.48 ($307.55) and select up $3.41 ($287.19) with a movement of 142 loads (93.15 loads of choice, 29.76 loads of select, 11.48 loads of trim and 7.81 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady to $1.00 higher. Given that packers have only bought mildly in the cash market over the last three weeks likely means that they'll need to be more aggressive this week and that prices could potentially trade higher.
FEEDER CATTLE:
The feeder cattle complex closed lower as trades paid its market little attention throughout the day. It's not from a lack of fundamental support that caused the contracts to close lower as feeder cattle prices continue to see tremendous support in the country. Instead, Wednesday's weaker end can simply be chalked up to a lousy technical day where little developed. September feeders closed $1.82 lower at $253.50, October feeders closed $2.20 lower at $259.05 and November feeders closed $1.32 lower at $261.57.
At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 650 to 950 pounds traded $6.00 to $7.00 higher, but the thin fleshed steers sold up to $15.00 higher. Steer calves weighing 400 to 650 pounds sold up to $20.00 higher. Feeder heifers weighing 500 to 800 pounds sold $6.00 to $7.00 higher, but like the steers thin fleshed heifers had instances of $15.00 higher. Slaughter cows traded $3.00 to $5.00 higher, and slaughter bulls sold steady to $3.00 higher. Feeder cattle supply over 600 pounds was 88%. The CME Feeder Cattle Index Sept. 12: up $0.28, $251.16.
LEAN HOGS:
The lean hog complex had a mixed day when most of the market's nearby contracts closed lower while the deferred contracts managed to maintain a slightly elevated position ahead of the day's end. Yes, the cash hog market did see a slight price increase and there were more than 12,000 head traded Tuesday, but I'm guessing that's the bulk of this week's trade and that Thursday and Friday's cash trade will be thin following Wednesday's movement. Pork cutout values were little help today as the big $7.42 drop in the belly and the $6.81 drip in the ham pulled the carcass price nearly $3.00 lower. October lean hogs closed $1.30 lower at $83.97, December lean hogs closed $0.55 lower at $76.35 and February lean hogs closed $0.07 lower at $80.17. Pork cutouts totaled 258.35 loads with 233.57 loads of pork cuts and 24.78 loads of trim. Pork cutout values: down $2.98, $98.22. Wednesday's slaughter is estimated at 476,000 head, 4,000 head less than a week ago and 11,000 head less than a year ago. The CME Lean Hog Index for Sept. 11: down $0.04, $86.13.
THURSDAY'S HOG CALL: Lower. Given how little packers have participated in the cash market lately, it's likely that Wednesday's volume fulfills most of their weekly needs.
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