GENERAL COMMENTS:
Although prices are far from regaining early week losses, the lack of continues liquidation and selling pressure added some sense of support to the already weak and expected oversold cattle complex. Feeder cattle futures posted the most aggressive gains with spot November contracts leading the market higher with a $2.32 per cwt rally. Hog futures, on the other hand, backed away from recent gains as technical pressure developed with traders focusing on position squaring opportunities across all lean hog contracts. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.20 with a weighted average of $68.27 on 3,228 hogs. December corn closed up 7 1/2 at $4.76 and December soybean meal closed up $2.40 at $449.8. The Dow Jones Industrial Average is down 40.33 at 34,112.27.
LIVE CATTLE:
Live cattle futures posted moderate to strong gains through the entire Wednesday trading session. Even though buyer support slowed at the end of the day and price levels moved off session highs, the higher close in all contract months was a refreshing change from the past two trading sessions. The majority of buyer support developed in early 2024 contract months which is helping to secure both technical support and firming fundamental beef demand expectations for the first half of next year. With nearby contracts setting new short-term lows Tuesday, there is still concern that the underlying pressure in the market may redevelop, but slow progress higher in nearby contracts could help to bring additional buying activity through the end of the month. Cash cattle markets remain quiet Wednesday afternoon with bids and asking prices still hard to define. It is likely that it will be end of the week trade in most areas, although there is a potential that some movement may start developing Thursday. December live cattle closed $0.63 higher at $179.4, February live cattle closed $1.05 higher at $179.475 and April live cattle closed $1.03 higher at $181.625.
Wednesday's slaughter is estimated at 124,000 head, 2,000 head more than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $1.63 ($298.75) and select up $1.55 ($271.03) with a movement of 134.62 loads (80.55 loads of choice, 29.05 loads of select, 10.35 loads of trim and 14.67 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady to $1 lower. Early week pressure in futures trade is limiting upward expectations as the week continues. Feeders are still expected to ask steady to higher, although there may be a significant gap between bids and asking prices once each develop.
FEEDER CATTLE:
Feeder cattle futures led the livestock complex higher with spot month November contracts holding price gains over $2 per cwt. Even though this move is significant, compared to the aggressive two-day loss seen across the complex, there is likely to be some uncertainty if follow-through buyer support will develop at the end of the week. There will likely be moderate volume Thursday morning, while outside market moves is expected to have an impact in trade direction during early trade. November feeders closed $2.33 higher at $234.55, January feeders closed $1.95 higher at $232.775 and March feeders closed $1.75 higher at $235.00. The CME Feeder Cattle Index for Nov. 6: down $0.76, $238.13.
LEAN HOGS:
Lean hog futures eroded from early week gains Wednesday, with traders focusing on position squaring opportunities. As buyers moved back into the cattle complex, this left the lean hog market more vulnerable for additional attention as traders posted moderate losses in most nearby contracts. The price weakness does not change the recent upward shift in market direction, but does add concern about the ability to continue to draw both technical and fundamental buyer interest through the end of the week. December lean hogs closed $1.40 lower at $71.5, February lean hogs closed $1.18 lower at $74.85 and April lean hogs closed $0.88 lower at $80.375. Wednesday's hog slaughter is estimated at 488,000 head, 6,000 head more than a week ago and 9,000 head more than a year ago. Pork Cutouts totaled 269.08 loads with 228.46 loads of pork cuts and 40.62 loads of trim. Pork cutout values are down $1.19 at $86.58. The CME Lean Hog Index for Nov. 6: up $0.04, $76.27.
THURSDAY'S HOG CALL: Steady to $1 lower. Midweek pressure in futures trade as well as unsettled direction in pork values may soften early cash bids Thursday morning.
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