Live cattle futures took the lead Thursday as renewed buyer support aggressively moved back into the market. Following a weak of overall market indecision and price weakness, active buyer support was sparked from both inside and outside of the cattle complex. Aggressive triple-digit gains in stock prices helped spark underlying buyer support in all cattle markets, which seemed to remain very hesitant through most of the week. Hog prices continue to erode lower, causing concerns that even further market losses may develop during the second half of October. Hog prices moved higher on the National Direct Afternoon Hog Report in moderate trade, adding $0.14 with a weighted average of $68.32 on 8,018 head. December corn is up 4 1/2 cents per bushel and December soybean meal is up $2.40 per ton. The Dow Jones Industrial Average is up 534 points and NASDAQ is up 251 points.
LIVE CATTLE:
Live cattle futures bounced higher Thursday, following strong support in outside commodity markets as well, helping to draw increased support to the market. December futures led the complex higher with a $1.30 per cwt, offsetting the price retraction seen over the last week and moving nearby contracts to new six-week highs. The ability for these gains to hold Friday and through the end of the week could create significant underlying support in all cattle markets and spark renewed buyer interest from both the commercial and noncommercial sectors during mid-October. October live cattle closed $0.97 higher at $125.75, December live cattle closed 1.30 higher at $130.30 and February live cattle closed $1.10 higher at $134.65. Cash cattle markets were generally quiet Thursday afternoon following light to moderate trade at steady prices Wednesday. There have been significant bids seen during the day with live cattle bids of $124 per cwt developing in most areas, while dressed bids are at $196 in the North. At this point, feeders are unwilling to sell additional cattle at these prices, with asking prices still at $125 and higher in the South and $198 in the North. Given the amount of trade done midweek, it is uncertain just how aggressive packers are willing to dig deeper into their pockets and pay more for cattle, or if they will try to hold these prices into next week. Activity early Friday will likely be the biggest indicator if significant cash market support can develop before the end of the week. Even if late week cattle sell higher, it is still uncertain if this will be enough momentum to shift the overall price average higher from the current levels expected for the week.
Thursday's slaughter is estimated at 119,000 head, 1,000 more than a week ago and steady with year ago totals. Week to date totals are at 480,000, steady with year ago levels.
Boxed beef prices closed higher: choice up $0.30 ($280.32) and select up $1.98 ($260.68) with a movement of 1431 loads (94.88 loads of choice, 27.91 loads of select, 2.92 loads of trim and 17.93 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Following light to moderate trade Wednesday, the tone of the market may have been set, although feeders are passing on steady bids, indicating that, if additional cattle need to be bought, prices may have to bounce higher at the end of the week.
FEEDER CATTLE:
November feeder cattle futures led the feeder cattle complex higher with a $1.17 per cwt rally, as trades focused on the renewed support through the cattle market. Support in live cattle trade continues to be the stimulus to bring additional feeder cattle traders back to the market. November futures have regained any losses seen over the last week and are now trading at the highest price since Sept. 7th. There remains uncertainty in the market concerning the amount of cattle moving into feedlots over the coming months, which may limit additional price gains, but ultimately total cattle numbers are expected to remain lower than last year once the dust settles, is helping to keep prices supportive. October feeders closed $0.92 lower at $157.65, November feeders closed $0.82 lower at $160.97 and January futures closed $1.32 lower at $161.45. The CME Feeder Cattle Index for Oct. 12: $154.26, up $0.11.
LEAN HOGS:
Firm follow-through pressure once again developed in lean hog futures. Overall, the focus of trader's attention has turned back to the cattle complex. This not only left limited trading interest left in hog markets, but without any significant shift in overall direction, prices continue to back away from late September gains. Although prices remain higher than before, the quarterly hogs and pigs report shook the market up, and the focus on uncertain pork demand through the next several months is offsetting any significant shift in hog supply levels. This may continue to leave prices unsettled, although traders are more diligent in trying to find market support, and this is likely to happen in the next couple of weeks. October lean hogs closed $0.45 lower at $88.20, December lean hogs closed $0.82 lower at $77.32 and February lean hog futures closed $0.55 lower at $80.30. Pork prices bounced higher, driven by firm gains in Rib and Belly cuts. Pork cutouts totaled 422.89 loads with 373.28 loads of pork cutouts and 49.61 loads of trim. Pork cutout values: up $1.21, $106.06. Thursday's slaughter is estimated at 477,000 head, 1,000 lower than a week ago and down 5,000 from a year ago. The CME Lean Hog Index for Oct. 13: down $0.89, $88.82.
FRIDAY'S CASH HOG CALL: Steady. Continued weakness in nearby and deferred futures trade, as well as limited support in negotiated cash hog prices and pork cutout values over the last couple weeks, is limiting support for higher moving cash markets.
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