GENERAL COMMENTS:
Live cattle futures trade remains mixed midweek even though overall volume remains sluggish and there is little direction to the market shifts at this point. Nearby futures are holding 10 to 25 cent gains through most of Wednesday morning, but deferred contracts remain under light pressure based on a pullback in feeder cattle trade. Hog futures are unwilling to totally back away from recent market softness, although the limited new activity is allowing for short covering to develop, especially in spot December contracts. December corn is up 3 1/4 at $4.923 and December soybean meal is up $2.60 at $402.4. The Dow Jones Industrial Average is down 187.11 at 33,810.54.
LIVE CATTLE:
Early gains in live cattle futures seem to be eroding near midday Wednesday, although the overall lack of volume, as traders enter the last half of trade, seems to be the lull that is eroding initial losses more than any fundamental or significant technical market shift. Cash cattle trade remains generally undeveloped, although a few asking prices are seen in the South at $185 and higher live basis, while northern asking prices are still hard to pin down. Bids are still elusive, which, at this point, is likely that active trade is probably be pushed off until Thursday or later, unless a major shift is seen in the market. October live cattle are $0.15 higher at $185.65, December live cattle are $0.15 higher at $187.025, February live cattle are steady. The gains in nearby contracts are offset by light to moderate selling pressure in deferred contract months. Given the moves in all contracts midweek, overall market direction remains unchanged, and could continue to hover in the current range over the near future.
Boxed beef prices are higher: choice up $0.38 ($305.52) and select up $0.36 ($278.99) with a movement of 85.00 loads (50.70 loads of choice, 22.49 loads of select, zero loads of trim and 12.07 loads of ground beef).
FEEDER CATTLE:
Pressure in feeder cattle futures is the focus of market weakness in livestock trade Wednesday morning. Although there is no significant long-term shift in numbers, the overall pullback from gains earlier in the week and moderate price swings in grain trade is allowing for feeder cattle futures to show further pressure. January futures are leading the complex lower, although the lack of volume in these contracts during morning trade may limit the validity of the price moves as far as overall market trends are concerned. However, the focus on firm pressure in nearby contracts is enough to add some concern to the market midweek. October feeders are $0.95 lower at $247.85, November feeders are $1.03 lower at $249.425 and January feeders are $1.88 lower at $250.925.
LEAN HOGS:
Lean hog futures have remained on either side of unchanged through most of the morning. The light gains holding in spot December contracts are still being offset by lack of support in other contracts. This could keep prices moving in a sideways motion through the end of the session. December lean hogs are $0.23 higher at $67.775, February lean hogs are $0.08 lower at $71.975 and April lean hogs are $0.23 lower at $78.775. The firm pressure seen Tuesday in the market, which moved prices to new contract lows is creating concern that there could be follow through pressure seen in the complex, especially if firm support is not developing in cash and pork cutout values in the near future.
Hog Prices are higher on the Daily Direct Morning Hog report, up $1.94 with a weighted average of $74.13, ranging from $68.00 to 76.00 on 5,917 head with a five-day rolling average of 5,917 head. Pork Cutouts totaled 185.64 loads with 160.30 loads of pork cuts and 25.34 loads of trim. Pork cutout values are down $1.73 at $88.14.
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