Tuesday Midday Livestock Market Summary - Feeder Cattle Futures Shift Lower

GENERAL COMMENTS:

Firm pressure developed in feeder cattle trade Tuesday morning with spot November contracts trading nearly $1 per cwt lower in early trade. This has pushed all feeder cattle contracts lower, adding to softness in nearby live cattle contracts as well. It wouldn't be Halloween without some "spooky and scary" market shifts, as traders focus on closing out the month of October. The momentum from gains over the last few days is still not in danger, as Tuesday's end of the month softness appears to be more focused on position squaring than actual long-term price discovery. The weaker tone is likely to hold across cattle markets, especially in feeder cattle trade, but traders are also looking forward to where prices may trend during early November. Lean hog futures on the other hand have posted limited gains early in the session and are trading mostly higher at midday, but the previously weak market structure seen in October is being rebuilt as buyers steadily move back into the complex. December corn is up 2 at $4.803 and December soybean meal is up $4.60 at $431.10. The Dow Jones Industrial Average is down 42.21 at 32,886.75.

LIVE CATTLE :

Mixed trade is seen in lightly traded live cattle contracts midday Tuesday. Even though initial gains developed during the morning, the focus on early pressure in feeder cattle trade and very little additional market direction at the end of the month has allowed prices to wander higher and lower within a narrow to moderate range across the live cattle complex. Traders appear to be content with price levels in the current range heading into November, following a strong technical rally seen over the past few trading sessions. Through the end of the week, there will likely be more focus placed on both outside market support as well as short term moves in cash cattle direction and beef values. But for now, traders appear willing to coast through the session, closing out the month of October. Cash cattle markets are extremely quiet Tuesday with bids remaining very hidden in the shadows on Halloween, while asking prices are still very quiet also. A few southern asking prices of $187 per cwt have developed, but the expectation is that trade will be pushed off until the last half of the week. October live cattle are $0.88 lower at $183.25, December live cattle are $0.33 lower at $182.925, February live cattle are $0.30 higher at $184.275.

Boxed beef prices are lower: choice down $2.83 ($306.45) and select down $0.84 ($280.05) with a movement of 74.00 loads (40.97 loads of choice, 14.41 loads of select, 6.67 loads of trim and 12.67 loads of ground beef).

FEEDER CATTLE:

Pressure has developed in feeder cattle futures as prices are starting to leak the moderate price gains seen over the last few days. Although the late month bounce in grain trade, increasing feed price levels, is adding some fundamental softness to the feeder cattle complex, end of the month positioning seems to be the focus during morning trade. Although nearby contracts posted losses around $1 per cwt through much of the morning, a midday pullback is helping to moderate price shifts, leaving nearby contracts within a narrowly mixed price range. There is likely to be some additional back and forth shifts through the rest of the Halloween Trading session, but no significant trend is expected to be seen as traders close out the month of October. November feeders are $0.15 lower at $237.525, January feeders are $0.05 lower at $236.825 and March feeders are steady.

LEAN HOGS:

Learn hog futures are quietly traded Tuesday morning with initial gains holding in most contract months, although there is very little sense of direction during the lightly traded last day of October. For the most part, traders are ready to put the sharp market pressure seen in October into the record book and move on to hopefully more positive market conditions in November. The strong rally over the last week is building the basis for underlying technical market support to continue, but there are still questions if fundamental short-term demand growth can break out of the current $9 per cwt price range the market has been hovering in over the last several weeks. December lean hogs are $0.23 higher at $71.4, February lean hogs are $0.20 higher at $74.575 and April lean hogs are $0.20 higher at $79.875.

Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 183.61 loads with 168.22 loads of pork cuts and 15.39 loads of trim. Pork cutout values are up $1.88 at $88.22.