GENERAL COMMENTS:
Early triple-digit losses in lean hog and feeder cattle futures left the livestock market on the defensive through the Monday trading session. The moves lower during early week trade is not enough to change the general direction due to the overall lack of activity in the complex. Despite narrow gains in October live cattle futures, the underlying tone of the live cattle market remained defensive also. Hog prices closed higher on the Daily Direct Afternoon hog report, up $2.75 with a weighted average of $774.82 on 2,588 hogs. December corn closed down 3 1/4 at $4.90 and December soybean meal closed up $0.20 at $390.20. The Dow Jones Industrial Average is up 314.25 at 33,984.54.
LIVE CATTLE:
Live cattle contracts closed mixed Monday afternoon following limited overall trade activity and price direction in most nearby contracts. The single-digit gain in spot October contracts was offset by underlying pressure not only in the rest of live cattle futures, but also pressure through the rest of the livestock complex. December live cattle futures remain under the 40- and 100-day moving average following a pullback late last week in nearby contract prices. But this still may not limit further support given support potentially developing in the coming days. October live cattle closed $0.08 higher at $185.2, December live cattle closed $0.20 lower at $186.55 and February live cattle closed $0.28 lower at $190.65.
Monday's slaughter is estimated at 124,000 head, 1,000 head less than a week ago and 1,445 head less than a year ago.
Boxed beef prices closed higher: choice up $3.87 ($304.67) and select up $1.71 ($277.2) with a movement of 102.28 loads (54.23 loads of choice, 24.39 loads of select, 15.51 loads of trim and 8.15 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to $1 higher. Cash cattle trade remains quiet Monday. The firm support in beef values is likely to help offset pressure in futures trade seen early in the week. Although active trade is likely to be pushed off until midweek or later, there remains optimism that cash prices may firm.
FEEDER CATTLE:
Active pressure swept through feeder cattle futures Monday morning as traders returned to the market following the weekend break. With last week's trade activity remaining sluggish at best, the concern that further market pressure could persist despite softness Monday in corn prices. October feeders closed $1.55 lower at $248.325, November feeders closed $1.65 lower at $249.925 and January feeders closed $0.73 lower at $251.525. The CME Feeder Cattle Index for Oct. 12: down $1.85, $248.26.
LEAN HOGS:
Active pressure in lean hog futures was consistent to weakness across the livestock complex Monday. Triple-digit losses were seen in all nearby lean hog futures contracts, although trade volume seemed to remain generally lackluster through most of the trading day. Traders will closely monitor outside market direction Tuesday, with the potential to step into the market with prices breaking through short-term support levels in nearby contracts. The ability to bring short-term market support near $68 per cwt in December lean hog futures could help to significantly increase underlying support through the second half of October. December lean hogs closed $1.20 lower at $68.30, February lean hogs closed $1.28 lower at $73.07 and April lean hogs closed $1.35 lower at $79.95.
Monday's hog slaughter is estimated at 485,000 head, 1,000 head less than a week ago and 2,000 head less than a year ago. Pork Cutouts totaled 246.89 loads with 215.92 loads of pork cuts and 30.97 loads of trim. Pork cutout values are up $0.72 at $91.22. The CME Lean Hog Index for Oct. 12: down $0.31, $82.11.
MONDAY'S HOG CALL: Mixed. The gains in cash hog markets and pork values, combined with steady slaughter numbers early in the week, is being offset by the pressure in futures trade. This is likely to lead to unsettled early cash market activity Tuesday morning.
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