GENERAL COMMENTS:
The market may have been slow at finding all the bullish support that Friday's Cattle on Feed report had in store for the complex, but come Tuesday, the cattle contracts shot noticeably higher. The big question for the week now is whether or not cash cattle prices are going to see the same kind of gusto overtake its market. Hog prices closed $0.15 higher on the National Direct Afternoon Hog Report, up $0.15 at $63.81 on 7,615 head. December corn is up 5 1/2 cents per bushel and December soybean meal is down $0.30. The Dow Jones Industrial Average is up 15.73 points and NASDAQ is up 9.01 points.
LIVE CATTLE:
The live cattle contracts all posed a brisk close with gains well over $1.00 stronger, which consequently left cattle enthusiasts feeling confident enough to throw up a fist bump and say, "that's more like it!" Monday's stronger close was needed, but Tuesday's jump of $1.62 to $1.92 higher in the nearby contracts was even more important. I don't have to remind you that 2021 has been far from what most would consider a good year, but as the market works its way through the early stages of the fourth quarter, higher prices could be on the horizon. December live cattle closed $1.92 higher at $131.45, February live cattle closed $1.62 higher at $136.37 and April live cattle closed $1.35 higher at $139.10.
Come Tuesday afternoon, some cash cattle trade was reported in Texas at $124 to $125, which is steady to $1.00 stronger than last week. With the momentum that's brewing within the cattle sector, feedlot managers stand a good chance of demanding higher cash cattle prices if they will rally together and be willing to wait the week out. With both Monday's and Tuesday's daily slaughters being pinned at 122,000 head, swift processing speeds could push packers to need more cattle. Tuesday's slaughter is estimated at 122,000 head, 1,000 head more than a week ago and 3,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $1.72 ($284.76) and select down $0.65 ($262.54) with a movement of 136 loads (48.82 loads of choice, 30.56 loads of select, 25.10 loads of trim and 31.44 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. It's only Tuesday and the market has seen a $1.00 advancement throughout the cash sector. If feedlots rally together and demand the full $2.00 higher, the market may have to honor their demands as packers' supplies grow thin.
FEEDER CATTLE:
A window of opportunity presented itself to the feeder contracts as the live cattle market's enthusiasm seeped over and the corn market's $0.05 higher close as opposed to the $0.08 rally (which was seen at midday), all seemed to signal a summoning for higher trade. November feeder cattle closed $1.30 higher at $159.77, January feeder cattle closed $2.02 higher at $160.60 and March feeders closed $2.05 higher at $161.70. The November feeder cattle contract was able to close above the 40-day moving average of $159.51, which is a positive sign for cow-calf producers who are looking to market their calves. Thankfully, the day's gusto was also seen throughout sale barns as buyers stepped to the plate and really looked for calves that came with all the bells and whistles -- a vaccination program and calves that had been long weaned. At OKC West Livestock Auction in El Reno, Oklahoma, the market's prelim report shared that compared to last week, steer and heifer calves traded mostly steady, but calves that were long weaned and that had multiple shots sold $3.00 to $5.00 higher. The market was seeing the most demand for calves that had been weaned for at least 30 to 45 days. The CME Feeder Cattle Index for Oct. 25: down $0.39, $155.50.
LEAN HOGS:
The lean hog market suffered losses throughout the day and unfortunately the complex doesn't stand a strong chance of summoning much support in the near future. Overall, pork cutout values closed lower and even though Monday's pork belly prices were up considerably (up $13.27), the market gave back Monday's advancement as bellies alone fell $16.08 by Tuesday's close. Cash hog prices were up slightly from Monday, but unless packers see more buying aggression, their ambitions to support the cash market will dwindle as they look for a market to push their product. December lean hogs closed $1.62 lower at $72.57, February lean hogs closed $1.62 lower at $75.15 and April lean hogs closed $1.55 lower at $79.12. Tuesday's slaughter is estimated at 480,000 head, 2,000 head more than a week ago and 18,000 head less than a year ago. Pork cutouts closed lower: down $0.33, $94.25. The CME Lean Hog Index for Oct. 22: down $0.72, $82.98.
WEDNESDAY'S CASH HOG CALL: Lower. Until there's clear support in pork cutout values, or unless the market finds a strong export report come Thursday, the market could see weaker prices.
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