Tuesday Closing Livestock Market Update - Cattle Dive Lower as Traders Worry About the Market Being Overbought

GENERAL COMMENTS:

Tuesday ended up being a mixed day for the livestock complex as the cattle complex dove lower as traders panicked about the market being overbought, but the lean hog complex successfully traded higher throughout the day. Still no cash cattle sales have been noted. December corn is up 3 cents per bushel and December soybean meal is down $3.00. The Dow Jones Industrial Average is down 154.52 points.

LIVE CATTLE:

It was a doozy of a day for the live cattle complex as the market closed substantially lower as traders seemed to be waving their white flag on the market's upward trend. The market initially opened higher this morning but quickly felt the pressure of the futures market's resistance and closed mostly $1.00 lower in the nearby contract. But with boxed beef prices seeing some weakness, and no cash cattle sales having developed yet, traders looked at their position, continued to note that the market is oversold, and quickly sent the market trailing lower. December live cattle closed $1.32 lower at $187.95, February live cattle closed $1.47 lower at $188.62 and April live cattle closed $1.60 lower at $189.10. No bids or asking prices are noted at this time and it's unlikely that the market will see any trade ahead of Thursday. At this point, everyone is somewhat on edge as time will tell how much of a correction is in store for the complex -- but it never feels good when the market turns and you're waiting on time to deliver answers. 

Tuesday's slaughter is estimated at 124,000 -- 1,000 head more than a week ago and 3,000 head less than a year ago.

Boxed beef prices closed lower: choice down $3.09 ($320.41) and select down $2.22 ($289.96) with a movement of 150 loads (83.72 loads of choice, 25.32 loads of select, 14.20 loads of trim and 26.83 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady. Given that boxed beef prices are showing some weakness and that packers have built up some supply around them, prices likely trade steady this week.

FEEDER CATTLE:

The feeder cattle market reacted abruptly to seeing the live cattle market's sharp decline and it too closed lower. November feeders closed $2.60 lower at $246.60, January feeders closed $2.92 lower at $244.02 and March feeders closed $3.12 lower at $242.42. The spot January contract did end up closing below its 100-day moving average, which continues to be a threshold that the market would like to overcome, but it simply lacks the continued technical support needed in order to do so. At the Winter Livestock Auction in La Junta, Colorado, compared to last week feeders teers under 400 pounds sold sharply higher. Steers weighing 400 to 600 pounds sold steady to $10.00 higher and steers weighing 600 to 750 pounds sold $10.00 to $20.00 higher. Feeder heifers under 600 pounds sold $4.00 higher to sharply higher and heifers weighing 600 to 700 pounds sold $4.00 to $5.00 stronger. Feeder cattle supply over 600 pounds was 21%. The CME feeder cattle index 10/28/2024: up $0.12, $249.49.

LEAN HOGS:

While the cattle complex spent the day fretting, the lean hog market powered through Tuesday's trade and successfully rounded out the day with new contract highs in a number of the nearby contracts. The momentum currently supporting the lean hog market's rally seems to be largely stemming from widespread consumer support -- and although this afternoon's carcass price closed slightly lower -- demand as of late has been exceptional. December lean hogs closed $2.20 higher at $82.82, February lean hogs closed $1.15 higher at $85.37 and April live cattle closed $0.65 higher at $87.77. The biggest limiting factor to today's carcass prices drop was the $5.37 decline in the picnic and the $3.86 decline in the loin. However, the cash market did see improvement as prices not only closed higher but a sizeable volume traded as well. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.09 with a weighted average price of $82.04 on 5,064 head. Pork cutouts totaled 296.04 loads with 251.95 loads of pork cuts and 44.09 loads of trim. Pork cutout values: down $0.88, $101.07. Tuesday's slaughter is estimated at 488,000 head -- steady with a week ago and 7,000 head more than a year ago. The CME lean hog index 10/25/2024: up $0.12, $85.55.

WEDNESDAY'S HOG CALL: Steady. Packers will likely buy more hogs again in Wednesday's market as slaughter speeds have been aggressive and demand has been strong.