Wednesday Midday Livestock Market Summary - Solid Livestock Gains Develop

GENERAL COMMENTS:

Firm support developed early Wednesday in all livestock futures. Feeder cattle futures are showing the most resiliency with nearby gains as much as $2 per cwt higher at late morning. The ability to hold hog prices over $1 per cwt in most nearby contracts boosts the idea that traders feel the market is at or near technical support levels and could entertain moderate to active short-covering over the near future. Although live cattle futures are lagging feeder cattle trade at midweek, the fact that all contracts are in positive ranges is helping create market optimism. The pressure in grain trade has not hurt the support in livestock trade, but overall production costs are not the most significant trade factor in cattle or hog futures at this point. December corn is down 4 1/4 at $4.798 and December soybean meal is down $4.60 at $429.6. The Dow Jones Industrial Average is up 78.67 at 33,220.05.

LIVE CATTLE:

Early gains in live cattle futures trade continue to develop slowly through the morning. At midday, prices are from 35 to 75 cents per cwt higher, as markets have calmed significantly from early week, post-report losses. There will have to be a long string of moderate price increases to regain the market levels lost over the last week, but the ability to create a sense of stability in the market at midweek is a great start. Unlike Tuesday's trade, early gains have been able to hold through morning trade, indicating buyer support remains deeper than previous days, and traders may continue to focus on establishing new support levels for the weeks ahead. With upcoming holiday demand still a strong focus, there will continue to be a lot of attention placed on weekly beef movement and how this will relate to market prices. Cash cattle markets are generally sluggish Wednesday morning with a few bids developing. Current bids are still well below asking prices of $185 in the South and $292 in the North. Current bids are $180 in the South and $290 in the North. Although light to moderate trade trickled in over the last couple of days, prices were generally $3 to $5 per cwt lower than last week's average. The recent futures market pressure will likely continue to impact cash cattle pricing through the end of the week, and potentially into early November. October live cattle are $0.85 higher at $180.85, December live cattle are $0.90 higher at $179.525, February live cattle are $0.63 higher at $181.475.

Boxed beef prices are mixed: choice up $1.71 ($307.69) and select down $2.37 ($281.63) with a movement of 97.00 loads (40.67 loads of choice, 14.78 loads of select, 27.22 loads of trim and 15.15 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures continue to gain momentum through the morning. November futures lead the market higher with gains near $2.50 per cwt as traders steadily trickle back into the oversold feeder complex. Even with the renewed gains, the market remains technically weak given the pressure over the last week and may see only limited support in the near future. The ability to consistently break away from five-month lows is helping rekindle the potential for steady buyer interest to move back into cattle trade in the coming weeks. October feeders are $0.60 higher at $240.025, November feeders are $2.58 higher at $238. and January feeders are $2.10 higher at $236.95.

LEAN HOGS:

Support across all livestock contracts and firm pressure in grain trade helped develop moderate to strong buyer support in nearby lean hog futures Wednesday morning. All nearby contracts are holding gains over $1 per cwt, drawing additional buyers to the market. The ability for these contracts to hold onto gains and close higher would send a signal of potential follow-through buyer support in upcoming days. The ability of lean hog futures to firmly establish a market floor following the price pressure over the last couple of weeks will be very significant and is being closely watched by many traders. December lean hogs are $1.20 higher at $67.575, February lean hogs are $1.23 higher at $70.7 and April lean hogs are $1.18 higher at $76.725.

Hog prices are lower on the Daily Direct Morning Hog report, down $0.59 with a weighted average of $72.36, ranging from $66.00 to $74.00 on 5,695 head with a five-day rolling average of $72.50. Pork cutouts totaled 168.91 loads with 144.94 loads of pork cuts and 23.97 loads of trim. Pork cutout values are down $2.39 at $86.4.