GENERAL COMMENTS:
It was a strong day for the cattle contracts as both the live cattle market and feeder cattle markets were able to close higher. Looking at boxed beef prices and seeing some positive gains in price along with a considerable movement of supply, bull-spreaders are eager about the nearby market. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.02 with a weighted average of $64.08 on 7,086 head. December corn is down 2 cents per bushel and December soybean meal is down $2.00. The Dow Jones Industrial Average is down 131.40 points and NASDAQ is down 32.27 points.
LIVE CATTLE:
Feedlots loved seeing the board scale higher throughout Tuesday's trade and are eager to move this week's market higher yet again. There was a lot of fear that Friday's Cattle on Feed report would flush bearishness into the marketplace, but the market let Friday absorb the report and left it there. With boxed beef prices showing some positive movement in prices and in sheer volume, bulls are liking how the market is shaping up and see the uptick in the boxed beef market as a sign of a strong market in the short term. October live cattle closed $0.95 higher at $108.90, December live cattle closed $1.47 higher at $113.12 and February live cattle closed $1.20 higher at $116.22. The cash market continues to be at a complete standstill as feedlots are planning to move cattle later in the week and hopefully for $1.00 to $2.00 higher. Tuesday's slaughter is estimated at 120,000 head, 1,000 head less than a week ago and 2,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $0.56 ($217.16) and select up $0.57 ($206.99) with a movement of 134 loads (68.17 loads of choice, 29.60 loads of select, 11.10 loads of trim and 25.04 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. It wouldn't be surprising to see trade wait until after the online auction Wednesday morning to sell. Over the last couple of weeks feeders have been adamant about regaining some of the leverage in the marketplace and have been able to do so by marketing their cattle later in the week.
FEEDER CATTLE:
The feeder cattle complex took full advantage of Tuesday's rally and left the market at least $1.00 higher, but commonly $2.00 higher in the nearby contracts. October feeders closed $2.00 higher at $142.92, November feeders closed $2.67 higher at $143.77 and January feeders closed $2.52 higher at $141.67. If the market keeps its momentum into Wednesday's trade, the market will feel some pressure from the resistance plane at $144. Depending on how serious traders are about solidifying their positions in the feeder cattle market, the week's anticipated stronger cash cattle trade could help the market move higher. Sales throughout the countryside remain hit or miss as some farmer feeders are out in the fields to harvest and others aren't quite ready to buy in this fall's market yet. The true test of the fall run won't happen for another 10 days to two weeks. The CME feeder cattle index Sept. 28: down $0.25, $142.36.
LEAN HOGS:
The lean hog market is feeling slightly jaded as the hype surrounding the African swine fever case in Germany shot the market higher as export demand is highly anticipated, but the lingering question of when the U.S. hog market will see export demand stalled the market once again. October lean hogs closed $0.32 lower at $72.37, December lean hogs closed $2.05 lower at $61.97 and February lean hogs closed $1.70 lower at $67.00. Pork cutouts totaled 376.54 loads with 347.82 loads of pork cuts and 28.71 loads of trim. Pork cutout values: down $1.64, 91.75. Tuesday's slaughter is estimated at 485,000 head, steady with a week ago and 4,000 head less than a year ago. The CME lean hog index Sept. 25: up $0.89, $75.42.
WEDNESDAY'S CASH HOG CALL: Steady to slightly lower. Packers are still wanting to secure their supplies but aren't necessarily wanting to do so at a higher expense. If Thursday's export report shares higher demand, the cash market will most likely stay steady if not creep higher with excitement, but if the report is vague then packers may start looking to at lowering their cost with cash hogs.
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