GENERAL COMMENTS:
Following the wild ride in livestock markets the last couple weeks, traders are looking for a sense of stability to regain fundamental and technical market composure through the end of the month. Light-to-moderate gains in live cattle futures early in Thursday's session are still holding in front-month contracts, although deferred futures are eroding slightly given lack of gains in feeder cattle trade. Lean hog futures remain higher as follow-through buying moved back into the complex. The recent pressure on lean hog futures prices has left the market in an oversold position, allowing opportunities for traders to cover positions, thus moving prices off contract lows. December corn is down 1 1/2 at $4.785 and December soybean meal is down $0.20 at $429.00. The Dow Jones Industrial Average is down 152.66 at 32,883.27.
LIVE CATTLE:
Initial gains in live cattle futures helped spark continued optimism that follow-through buying would be sustained through the end of the week. As trade continued, buy orders appeared to be in shorter supply than previously expected, allowing deferred contracts to erode near midday. Although spot-month contracts are still holding moderate gains, the pressure in early 2024 contract months once again focused on the fears that supply levels may continue higher than expected. There still seems to be moderate support for holiday beef demand growth through the end of the year, which may limit further erosion of front-month contracts. But traders seem to remain cautious about quickly stepping into deferred contracts with still unanswered questions following last week's Cattle on Feed report. Cash cattle trade remains quiet Thursday morning with a few bids available at $181 to $184 per cwt live basis, depending on the area of the country. Asking prices still remain at $184 and higher in the South and $292 and higher in the North. So far this week, most of the trade has developed in the North with prices generally $4 per cwt lower than last week's price levels. Some additional trade is expected through the end of the week but may trickle slowly into the market over the next couple of days. October live cattle are $0.58 higher at $181.7, December live cattle are $0.53 lower at $178.9, February live cattle are $1.05 lower at $180.45.
Boxed beef prices are lower: choice down $3.89 ($303.61) and select down $0.91 ($280.75) with a movement of 78.00 loads (35.45 loads of choice, 18.41 loads of select, 10.61 loads of trim and 14.33 loads of ground beef).
FEEDER CATTLE:
Feeder cattle trade remains mixed to mostly lower as early support quickly eroded. November feeder cattle futures are trading over $1.50 per cwt lower despite continued pressure in grain trade, which will limit overall feeding costs. Although strong gains developed at midweek, indicating buyers willing to cover recent losses, the concern that overall feeder cattle supplies may not have been fully factored into the market is again creating concern. Right now, the cattle market -- and feeder cattle trade in particular -- is very emotionally driven, with very little time for the markets to settle down and stabilize. Moderate to wide price swings may continue to develop through the remainder of Thursday, limiting opportunity for buyers who have been waiting to step back into the market. October feeders are $0.13 higher at $240.1, November feeders are $1.40 lower at $236.65 and January feeders are $0.95 lower at $235.60.
LEAN HOGS:
Lean hog futures are the bright spot of livestock trade Thursday with moderate to firm gains across the complex. This is leading to a second consecutive day of gains in nearby contracts as traders try to build a foundation on recent market pressure. Although very little has changed in pork or hog market fundamentals over the last couple of weeks, prices may have hit short-term support levels, allowing for a light to moderate price bounce over the coming trading sessions. The ability for December lean hog futures to defend the $66 per cwt contract low, and even show consistent moderate gains, is helping bring more interest back into the complex each trading session. December lean hogs are $0.53 higher at $68.025, February lean hogs are $0.88 higher at $71.575 and April lean hogs are $0.70 higher at $77.475.
Hog prices are lower on the Daily Direct Morning Hog report, down $0.98 with a weighted average of $71.38, ranging from $67.00 to $74.00 on 1,517 head with a five-day rolling average of $72.14. Pork Cutouts totaled 197.00 loads with 178.61 loads of pork cuts and 18.39 loads of trim. Pork cutout values are up $2.15 at $88.55.
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