GENERAL COMMENTS:
Feedlots and packers are going rounds this week as feedlots soberly understand that, given how lackadaisical packers were in the cash market over the last two weeks, they'll need to buy cattle this week to avoid becoming short bought. However, at this point, very few cattle have traded as feedlots are demanding their full asking prices. corn is down 3 1/4 cents per bushel and December soybean meal is up $7.70. The Dow Jones Industrial Average is up 190.80 points.
LIVE CATTLE:
As the live cattle market keeps with Tuesday's ascend, feedlots are holding firm in their desire to get more money this week for cattle, and, consequently, the fat cattle market has yet to see much action as packers and feedlots are in a standoff. October live cattle are up $0.27 at $145.32, December live cattle are up $0.22 at $151.10 and February live cattle are up $0.07 at $155.27. Determining when trade will break loose, and when cattle will begin to sell, really falls on feedlots as they'll either accept packers' early bids or hold out and wait for more money. A few bids have been offered in the North as one major packer is offering $226 in Iowa, and another major packer is offering $222 in eastern Nebraska. Nevertheless, Wednesday afternoon's trade will be worth watching as feedlots clearly understand that with vigorous processing speeds and current showlists that they now possess more leverage in today's market.
Boxed beef prices are mixed: choice up $1.75 ($262.22) and select down $0.17 ($239.13) with a movement of 124 loads (64.38 loads of choice, 23.19 loads of select, 10.10 loads of trim and 26.53 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market has cold feet in Wednesday's market, as one would suspect that feeders would be trading higher as corn is trending $0.02 to $0.03 lower in its nearby contracts, and as the live cattle market is scaling higher into the afternoon. Nevertheless, after Tuesday's ambitious trade, the market is trending lower but is still holding above the market's 40-day moving average, showing that its downside pressure isn't too extreme. September feeders are down $0.87 at $183.30, October feeders are down $0.62 at $185.47 and November feeders are down $0.32 at $186.70.
LEAN HOGS:
The lean hog market is trending mostly higher into Wednesday's afternoon as the market sees some more interest in its cash sector. October lean hogs are down $0.05 at $91.05, December lean hogs are up $0.17 at $83.67 and February lean hogs are up $0.40 at $87.47. We knew that packers were going to have to be more aggressive in this week's cash market given that they paid last week's market little to no attention, but how active they'll be really depends on demand. So, heading into Wednesday afternoon, be watchful of both processing speeds and pork cutout values as that could be an indicator of how aggressive packers will be in this week's cash hog market.
The projected lean hog index for Sept. 6 is down $1.78 at $101.48, and the actual index for Sept. 2 is down $1.48 at $103.26. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.57 with a weighted average of $97.47, ranging from $90.00 to $110.00 on 5,138 head and a five-day rolling average of $97.04. Pork cutouts total 205.05 loads with 185.65 loads of pork cuts and 19.40 loads of trim. Pork cutout values: down $1.45, $102.88.
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