GENERAL COMMENTS:
Traders ran out of steam when it came to advancing the livestock contracts through Tuesday. More than anything, it seemed as though the market's fundamental support was too little, too late to encourage traders that a higher close was indeed a wise decision. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.85 with a weighted average price of $73.96 on 13,411 head. December corn is down 2 3/4 cents per bushel and December soybean meal is up $2.90. The Dow Jones Industrial Average is up 134.65 points.
LIVE CATTLE:
The live cattle complex ended the day lower despite its efforts early on. October live cattle closed $0.20 higher at $182.57, December live cattle closed $0.35 lower at $185.00 and February live cattle closed $0.30 lower at $189.32. At the day's start, traders were supporting the live cattle contracts but, as the noon hour neared and fundamental support seemed to be lacking, traders grew weary and elected to let the contracts drift lower through the afternoon and through closing. It was slightly disappointing to see boxed beef prices close lower after Monday's market posted higher prices, but the day's movement was considerable at 217 loads. No cash cattle trade developed and it's likely that packers wait to show the market much interest until Wednesday or even later in the week.
Tuesday's slaughter is estimated at 128,000 head, 3,000 head more than a week ago and 1,000 head less than a year ago.
Boxed beef prices closed lower: choice down $2.36 ($301.06) and select down $1.35 ($276.15) with a movement of 217 loads (111.02 loads of choice, 48.13 loads of select, 33.59 loads of trim and 24.41 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady to $1.00 higher. Packers were able to get 94,000 head of cattle bought in last week's cash market, but with slaughter speeds showing a little faster pace this week in hopes that seasonal beef demand is improving, packers could be aggressive buyers again this week.
FEEDER CATTLE:
The feeder cattle complex was surprisingly able to keep its nearby contracts higher through Tuesday's end even though the vast majority of the live cattle contracts closed lower. The spot November contract continues to dance around it's 100-day moving average indicating that traders are yearning for direction. Are the market's fundamentals going to shine through and rebound prices, or will the external pressures of the marketplace send the contract tumbling sharply below its 100-day moving average? Time will tell, but at this point, traders aren't sold on either direction as they keep prices mostly steady. October feeders closed $1.05 higher at $247.95, November feeders closed $0.70 higher at $250.35 and January feeders closed steady at $251.85. At the Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers and heifers traded mostly steady but there wasn't a good test on those weighing over 800 pounds. Weaned steer calves traded $2.00 to $3.00 higher; but un-weaned or short weaned calves traded $3.00 to $6.00 back. Heifer calves traded steady to $5.00 lower. Demand was good for feeders that were long weaned but demand for everything else was just moderate. Feeder cattle supply over 600 pounds was 57%. The CME Feeder Cattle Index for Oct. 9: up $0.53, $250.26.
LEAN HOGS:
The lean hog complex rounded out the day mixed as its nearby contracts closed lower and its deferred contracts closed slightly higher. More than anything, it seemed like traders simply weren't getting the fundamental assurance that they needed in order to sustain a forward movement in the contracts. It was surprising, however, to see the volume of hog sales this afternoon. Yes, cash prices still closed lower but over 13,000 head traded which is sizeable in today's cash hog market. October lean hogs closed $0.02 lower at $81.95, December lean hogs closed $1.05 lower at $71.42 and February lean hogs closed $0.97 lower at $75.70. It was again the belly that was the leading the cause of the decline in pork cutout values as the belly alone fell $19.31. Otherwise, a mere $0.17 decline was seen in the loin but all the other cuts had mild to moderate gains. Pork cutouts totaled 319.55 loads with 289.73 loads of pork cuts and 29.82 loads of trim. Pork cutout values: down $1.99, $93.07. Tuesday's slaughter is estimated at 486,000 head, 1,000 head less than a week ago and 8,000 head less than a year ago. The CME Lean Hog Index for Oct. 6: down $0.57, $82.46.
WEDNESDAY'S HOG CALL: Higher. It would appear that packers are short-bought and in need of hogs given that they bought 13,000 head in Tuesday's cash market.
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