GENERAL COMMENTS:
It's been an exhilarating week thus far for the cattle market as cash cattle prices have seen a $2.00 to $4.00 jump over last week and the live cattle contracts are continuing to grind higher. The lean hog market still hasn't found the support that it's been looking and is concerned what may be unveiled in Thursday's export report. December corn is up 12 1/2 cents per bushel and December soybean meal is up $5.00. The Dow Jones Industrial Average is down 90.63 points and NASDAQ is up 89.28 points.
LIVE CATTLE
Tuesday's stark advancement on the board was great, but a $2.00 to $4.00 jump in cash cattle prices is even sweeter. It's been a long, long time since the market has reacted this positively to a bullish Cattle on Feed report, but what's helping rally the market as well is the fact that packers are short bought. The combination of the two factors has heightened the vibrancy throughout the live cattle market and sent both futures and cash prices higher. December live cattle are up $0.27 at $131.72, February live cattle are up $0.50 at $136.87 and April live cattle are up $0.27 at $139.37. There's been some dressed trade reported in the North at $200 ($4.00 higher than a week ago) and a light trade in the South at $126 (steady to $2.00 higher than a week ago). If packers continue to run at the speed of processing 122,000 head a day, the market could see supportive undertones for quite some time.
The Fed Cattle Exchange Auction listed a total of 2,692 head, of which 394 actually sold, 517 were scratched from the auction and 1,781 head were listed as unsold, as they did not meet the reserve prices that ranged from $125 to $128. Opening prices were $124, high bids ranged from $124 to $125.75. The state-by-state breakdown looks like this: Texas 1,530 total head, with 394 head sold at $125.50 to $125.75, 871 head went unsold and 265 were scratched from the auction; Kansas 840 total head, all of which went unsold; South Dakota 252 total head, all of which were scratched from the auction. California 70 total head, all of which went unsold.
Boxed beef prices are lower: choice down $1.41 ($283.35) and select down $0.44 ($262.10) with a movement of 93 loads (52.87 loads of choice, 20.63 loads of select, 3.21 loads of trim and 16.58 loads of ground beef).
FEEDER CATTLE
The corn market's $0.09 to $0.10 rally has grabbed the attention of the feeder cattle market, but so has the stellar cash cattle trade that's overcome the live cattle market. The market is in the middle of a balancing act as watching feed costs is crucial, but if the cash cattle market can break out of the sideways trap that's shackled all of 2021 -- that's big! November feeders are down $0.95 at $158.82, January feeders are down $1.12 at $159.47 and March feeders are down $1.05 at $160.65. Cow-calf producers are sending their calves to town, and with the market showing promising long-term upside potential in the live cattle sector, feeder cattle price will most likely see a bump in the countryside as well.
LEAN HOGS
The lean hog contracts toyed with the idea of trading mildly higher at Wednesday's start, but as the day has progressed, the market has continued to plunder as technical support has vacated the market. December lean hog are down $0.77 at $71.87, February lean hogs are down $0.82 at $74.32 and April lean hogs are down $0.75 at $78.37. It's tough to say where the market's bottom will be as the biggest question continues go unanswered, "where will the market find demand?" Regardless if it was international demand from higher exports or an uptick in our domestic supermarket, packers need to find a buyer. With that being said, seeing how Thursday's export report treats the hog enthusiasts will be pivotal in how the market reacts for the rest of the week.
The projected lean hog index for Oct. 26 is down $0.99 at $81.67 and the actual index for Oct. 25 is down $0.32 at $82.66. Hog prices are higher on the National Direct Morning Hog Report, up $0.15 with a weighted average of $63.81, ranging from $62.00 to $66.00 on 7,615 head. Pork cutouts total 201.42 loads with 161.69 loads of pork cuts and 39.73 loads of trim. Pork cutouts are higher: up $3.36, $97.68.
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