Wednesday, October 30, 2019

Wednesday Closing Livestock Market Summary - All Three Livestock Markets Close Over $1 Higher

GENERAL COMMENTS:
John Wayne may have whispered from above to the livestock market, "Ya know, we're burin' daylight," and from that spur of inspiration, Wednesday's market got to work. December live cattle closed $1.47 higher, November feeder cattle closed $2.40 higher and December lean hogs closed $1.45 higher. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.48 with a weighted average of $49.60. December corn was up 4 1/2 cents per bushel, and December soybean meal was down $0.80. The Dow Jones Industrial Average was up 115.27 points and the NASDAQ was up 27.13 points.
LIVE CATTLE:
Live cattle futures had a strong day, with the December contract closing $1.47 higher at $118.30. Live cattle prices haven't been that high in nearly six months. Nearby and deferred contracts alike all closed significantly higher with the only contract not closing with gains of more than $1.00 was the April 2020 board, which was up $0.97. Wednesday's market closed with enough polish that bulls want to throw their hats and sip on nice, smooth whiskey and say, "Told ya so!" But the real telling won't be until more time passes. Wednesday's rally won't equate to much if Thursday throws it all away and it's merely forgotten about by Friday. There are still plenty of bears who think the market is due for a correction.
Nevertheless, the vigor and speed mustered up on the futures board trickled into parts of the cash market. Some trade took place in the South, up $2.00 from last week's weighted average, at $112.00. Many feeders denied early bids and are holding out for higher prices yet. Wednesday's slaughter is estimated at 117,000 head -- down 1,000 head from a week ago and 4,000 head from a year ago.
Closing boxed beef prices are mixed: choice down $0.50 ($230.05) and select up healthily, up $3.10 ($206.67), Wednesday's boxed beef movement totaled 113 loads (49.15 loads of choice, 28.28 loads of select, 4.60 loads of trim and 30.77 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: $2.00 to $3.00 higher. It's not completely out of reach to think that prices could jump $2.00 to $3.00 this week with packers in need of cattle and plenty anxious to get cattle sooner rather than later to keep up with robust boxed beef prices while they last.
FEEDER CATTLE:
The feeder cattle market closed Wednesday with more spark and excitement than did the live cattle market. November feeder cattle were up $2.40, January and March feeders were up $3.20 and April feeders up $2.85. Across the board, futures rallied and closed the day significantly higher. On an estimated run of 5,294 head (down 4,336 head from the previous week) OKC West in El Reno, Oklahoma, sold feeder steers mostly steady to $3.00 lower, with the biggest decline on heavy six weights. Feeder heifers were steady. It was noted that cold and wet conditions, coupled with winter weather advisories over the last few days, hindered the sales total volume of calves. The CME feeder cattle index 10/29/19: up $0.25 at $145.08.
LEAN HOGS:
Despite the cash market barking lower, the lean hog futures complex latched onto the energy and momentum built in the cattle complex and closed higher. December lean hogs closed with the highest gains, up $1.45 at $65.77. February lean hogs are up $0.65 at $73.27, and the April board is up $0.42 at $79.57. Pork cutouts totaled 305.34 loads with 251.96 loads of pork cuts and 53.38 loads of trim. Pork cutout values: down $1.28 at $75.44. The CME lean hog index 10/28/19: down $0.61 at $63.51.
THURSDAY'S CASH HOG CALL: Steady to $1.00 lower. Despite what the futures market does, packers don't have to work hard at getting hogs bought right now, and the market needs an outlet.

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