GENERAL COMMENTS:
Lean hog futures were the bright spot of the livestock market Thursday with buyers stepping into the complex for the second consecutive trading session. Although buyer interest initially developed in cattle trade, the lack of follow-through buyer interest and remaining concerns of how the larger-than-expected supplies will impact long-term market direction quickly eroded most support. Although spot month live cattle and feeder cattle contracts still closed higher, the weakness in nearly all other contract months led to additional concerns that prices may not quickly move away from recent lows. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.20 with a weighted average of $70.7 on 2,702 hogs. December corn closed down 3/4 at $4.793 and December soybean meal closed up $0.30 at $429.5. The Dow Jones Industrial Average is down 251.63 at 32,784.30.
LIVE CATTLE:
Live cattle futures showed initial signs of follow-through buying as trade activity started higher during morning trade, but this support was limited as initial buy orders quickly evaporated, leaving way for moderate to firm pressure to develop in all but spot month contracts. October futures closed with limited direction and light volume, but the most significant pressure was seen in February contract months as traders are focusing on continued concerns of longer-term supply growth in the market. Cash cattle trade continues to trickle in through the week with light trade reported across the North. Overall trade so far this week seems to be mostly $290 in the North, which is $4 per cwt lower, and $180 to $182 per cwt lower, which is generally $3 to $5 per cwt lower. It is likely that more trade, especially in the south, will develop on Friday before packers call it a week. October live cattle closed $0.58 higher at $181.7, December live cattle closed $0.10 lower at $179.325 and February live cattle closed $1.10 lower at $180.4.
Thursday's slaughter is estimated at 125,000 head, steady with a week ago and 2,000 head less than a year ago. Boxed beef prices closed lower: choice down $0.65 ($306.85) and select down $1.97 ($279.69) with a movement of 150.37 loads (91.08 loads of choice, 30.64 loads of select, 11.66 loads of trim and 16.99 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Trade Friday that does develop is expected to remain steady with early week activity. This is generally $3 to $5 per cwt lower than last week's levels.
FEEDER CATTLE:
Feeder cattle futures led the complex lower Thursday despite pressure in grain trade and previous support seen across the cattle market. Although trade started rather supportive across the entire complex, prices turned lower in all but spot month contracts. Although feeder cattle futures backed away from midday lows, most contracts posted losses around $1.50 per cwt, which created additional short-term concern about the ability to attract additional buyer support in the near future. Traders remain emotionally driven by supply fears as well as overall economy concerns. This could keep prices volatile in the near future. October feeders closed $0.58 higher at $240.55, November feeders closed $1.55 lower at $236.5 and January feeders closed $1.48 lower at $235.075. The CME Feeder Cattle Index for October 24: down $1.01, $240.62.
LEAN HOGS:
Lean hog futures rallied higher once again with triple-digit gains seen in nearby contracts. The focus was placed on buyers gaining more confidence that market lows may have already been recorded following the sharp push lower over the last couple of weeks. This could continue to lead to further price support in futures trade, but traders are starting to look toward pork values to spark additional firm direction before aggressively moving into a higher trading range. December lean hogs closed $1.13 higher at $68.625, February lean hogs closed $1.13 higher at $71.825 and April lean hogs closed $0.88 higher at $77.65. Thursday's hog slaughter is estimated at 486,000 head, 3,000 head more than a week ago and 6,000 head less than a year ago. Pork Cutouts totaled 302.19 loads with 276.62 loads of pork cuts and 25.57 loads of trim.
Pork cutout values are down $1.86 at $85.73. The CME Lean Hog Index for October 24: down $0.26, $78.41.
FRIDAY'S HOG CALL: Steady to $1 Lower. Softness in cash and meat values toward the end of the week is limiting the potential to move cash hog prices higher Friday morning. Packer interest should still remain strong, although the ability to gain hogs at steady to lower prices may keep market support limited.
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