GENERAL COMMENTS:
Trade Tuesday was generally sluggish with occasional bursts of buying and selling stepping into the market throughout the trading session. Due to the overall lack of trade volume and general lackluster interest in both hog and cattle futures, this occasional surge of activity was able to shift markets higher and lower through the day. Markets closed mostly higher in all markets, with deferred live cattle futures showing the most price support at the end of the session. Gains in grain and feed prices initially put some pressure on feeder cattle futures, but by the end of the day, all nearby feeder cattle contracts inched higher. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.13 with a weighted average of $69.6 on 7,164 hogs. December corn closed up 1/2 at $4.788 and December soybean meal closed up $4.50 at $431.00. The Dow Jones Industrial Average is up 123.91 at 33,052.87.
LIVE CATTLE:
Compared to the rest of the livestock complex, the live cattle market posted the most aggressive gains and losses for the day. Expiring October live cattle futures ended 37 cents lower, while April live cattle contracts led gains in all other livestock markets, posting a 95-cent gain at closing bell. Overall, there was very little direction developing in the market as traders used Halloween as a good reason to remain on the sidelines, maybe preparing for spooky parties to come, since nothing scary really developed during the market session. With traders closing the books on October and waiting for additional technical support during early November, markets remained sluggish. Cash cattle activity remained quiet Tuesday with both sides in little hurry to trade cattle at this point. The overall lack of direction in futures trade at the end of October added even more apathy to the overall cash market. Bids are extremely quiet, while asking prices are hit and miss depending on the area. A few asking prices have been seen in the South at $187 per cwt. The expectation is that any active trade will be pushed to the last half of the week.
October live cattle closed $0.38 lower at $183.75, December live cattle closed $0.30 higher at $183.55 and February live cattle closed $0.65 higher at $184.625.
Tuesday's slaughter is estimated at 125,000 head, 1,000 head less than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed lower: choice down $4.10 ($305.18) and select down $1.39 ($279.5) with a movement of 140.04 loads (80.97 loads of choice, 30.43 loads of select, 10.42 loads of trim and 18.22 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady to $2 higher. Little to no direction is seen in cash cattle trade, although asking prices are expected to remain elevated as feeders look for the potential of late week trade developing.
FEEDER CATTLE:
On one hand, given the extreme volatility in feeder cattle futures over the last couple of weeks, a calm, quiet day of the markets may have been a relief. But on the other hand, it is slightly disappointing that follow-through support at the end of the month was not able to focus on continued underlying support of buyers as traders close out the month. Nearby feeder cattle futures have rebounded moderately from recent October lows, but the upward shift in nearby and deferred feeder cattle trade is significantly dwarfed compared to surrounding live cattle and lean hog futures. This creates a near spooky feeling that traders may remain scared of additional large cattle placements through the end of the year, potentially limiting market support for an extended period of time. November feeders closed $0.03 higher at $237.70, January feeders closed $0.33 higher at $237.20 and March feeders closed $0.38 higher at $239.75. The CME Feeder Cattle Index for Oct. 27: up $0.70, $237.23.
LEAN HOGS:
Lean hog futures were the anchor of the livestock complex Tuesday as firm gains developed and held through most of the session. Like other commodity markets, trade remained sluggish with very limited overall activity and a sense of stable direction at the end of the month. But the positive move higher indicates that traders have not yet grown tired or skittish of the uphill price shifts seen in across lean hog trad over the last week. Gains in lean hog trade were also the most consistent Tuesday with markets closing 50 to 75 cents higher, as traders seemingly expected further positive news to help draw additional support in the coming days of November. December lean hogs closed $0.55 higher at $71.725, February lean hogs closed $0.50 higher at $74.875 and April lean hogs closed $0.53 higher at $80.20. Tuesday's hog slaughter is estimated at 487,000 head, 4,000 head more than a week ago and 5,000 head more than a year ago. Pork Cutouts totaled 317.39 loads with 280.34 loads of pork cuts and 37.05 loads of trim. Pork cutout values are down $1.38 at $86.48. The CME Lean Hog Index for Oct. 27: down $0.44, $77.51.
WEDNESDAY'S HOG CALL: Steady to $1 lower. Light to moderate pressure in cash hog prices and pork cutout values will point to expected steady to lower packer bids midweek.
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