The cattle complex is eliminating the losses of the past two days as futures push toward recent highs. Live cattle reversed losses suffered during the first half hour of trade, posting gains of 25-50 cents. Feeder cattle followed a similar pattern with gains of 35-75 cents. Lean hog futures continue to a strong divergence of the front-month October to the rest of the contracts with October up $1.42 while December and later contracts are mixed. Corn futures are 7 cents higher on Midwest rains and strong export sales. The Dow is up 250 points with the Nasdaq up 69 points.
LIVE CATTLE:
The cattle complex is reversing the losses of the past two days as traders look ahead to the Cattle on Feed report to be released Friday afternoon. The trade is expecting a hefty supply of market-ready cattle, but traders are proceeding with caution. Packers continue to hold with limited trade. Trade is beginning to develop in the North with dressed at $175, steady with last week's weighted average basis Nebraska, but generally bids and offers remain apart. Bids average $108 per hundredweight (cwt) live while dressed bids are $174-$175. Asking prices are $113-$114 live and $180 dressed. Boxed beef cut-outs are higher, up $0.76 (choice) and up $1.29 (select) with 72 loads reported (28 loads of choice cuts, 16 loads of select cuts, 13 loads of trim, and 15 loads of ground beef).
FEEDER CATTLE:
Feeder cattle are holding on to slight gains as futures make an attempt to revisit recent highs. Traders see little reason to push futures significantly higher from a technical standpoint. However, if live cattle futures trend higher, that would change the attitude, but not likely ahead of the Cattle on Feed report.
LEAN HOGS:
October continues to outpace the rest of the complex, pushing $1.25 higher, while later futures contracts are lower. High water from Hurricane Florence with plants struggling to open provides support to the October contract. The weighted average price is $1.16 higher at $57.39 with a range of $55 to $60 with 6,510 head sold. The National Pork Plant report posted 130 loads selling (119 loads cuts and 11 loads trim). Carcass value declined $0.40 cents reported at $77.99. The projected two-day lean hog index for 9.19 with $57.44, up $1.45.
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