GENERAL COMMENTS:
It was a technical day for the livestock complex as traders didn't seem interested in support the contracts whatsoever. Thankfully, that didn't affect the cash cattle market as it traded $2.00 to $5.00 higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $6.99 with a weighted average of $91.99 on 5,698 head. December corn is down 2 3/4 cents per bushel and December soybean meal is up $6.70. The Dow Jones Industrial Average is up 194.17 points.
LIVE CATTLE:
The live cattle contracts may have closed lower but given that fat cattle traded $2.00 higher in the South and nearly $5.00 higher in the North, feedlots are more than pleased with the day. A moderate trade was reported in the South with cattle selling for $150, which is $2.00 higher than last week's weighted average. In the North, dressed business was marked at $240, which is nearly $5.00 higher than last week's weighted average. It's interesting to note that a regional packer in Nebraska was willing to pay $244 for cattle so that they could ensure delivery as early as next week. Needless to say, front-end supplies of cattle are thin -- extremely thin, and packers know that they've got to continue buying cattle in order to avoid become short bought. The market has seen ample support from the boxed beef sector, so packers are still willing to run aggressive chain speeds. December live cattle closed $0.15 lower at $153.42, February live cattle closed $0.17 lower at $156.85 and April live cattle closed $0.07 lower at $159.50. Thursday's slaughter is estimated at 128,000 head, steady with a week ago and 5,000 head more than a year ago.
Thursday's actual slaughter shared that for the week ending Oct. 15 steers averaged 924 pounds, which is 4 pounds more than a week go and 2 pounds more than a year ago. For the same week, heifers averaged 846 pounds, which is 3 pounds more than the week before and 6 pounds more than a year ago.
Beef net sales of 14,100 metric tons (mt) for 2022 were primarily for South Korea (4,600 mt), Japan (2,700 mt) and China (2,600 mt).
Boxed beef prices closed higher: choice up $1.63 ($262.49) and select up $3.31 ($231.91) with a movement of 129 loads (76.20 loads of choice, 18.41 loads of select, 8.53 loads of trim and 25.68 loads of ground beef). The choice/select spread sits at $30.58.
FRIDAY'S CATTLE CALL: Steady. Prices are likely to remain steady in Friday's market, but there is a chance that creep higher before the week's over as only 27,000 head of cattle have been reported as sold this week. Packers are going to need to buy more in order to avoid becoming short bought.
FEEDER CATTLE:
Even though the corn complex closed $0.02 to $0.03 lower by Thursday's end, that wasn't enough to entice traders into pushing the feeder cattle contracts higher. November feeders closed $0.70 lower at $178.12, January feeders closed $0.80 lower at $180.45 and March feeders closed $0.60 lower at $182.45. The cash side of the market saw better support throughout Thursday's market, but that wasn't enough for traders to put to rest their skeptic approach to Thursday's trade. At La Junta Livestock Commission in La Junta, Colorado, compared to last week, steer calves under 600 pounds traded steady to $2.00 higher, and steers over 600 pounds traded $3.00 to $5.00 higher. Heifer calves under 500 pounds sold mostly steady, and those over 500 pounds traded $2.00 to $3.00 higher. Yearling feeder steers sold $5.00 to $8.00 higher, and yearly heifers were too lightly tested to find an accurate trend. Slaughter cows traded $2.00 higher and slaughter bulls sold steady. Feeder cattle supplies over 600 pounds was 61%. The CME Feeder Cattle Index for Oct. 26: down $0.18, $174.78.
LEAN HOGS:
The lean hog complex had a troubling day as traders backed away from the market and let it plummet throughout Thursday's hours. Pork cutout prices and the day's export report aren't even to blame as both were supportive. Instead, it seemed as through traders simply backed away from the market and were unwilling to do anything regardless of how the market's fundamentals panned out. December lean hogs closed $3.37 lower at $85.12, February lean hogs closed $2.85 lower at $88.15 and April lean hogs closed $2.05 lower at $92.12. Earlier in the week, pork cutouts suffered as the belly was pressured by the bearish finding in this week's cold storage report as stocks of bellies were up 183% from last year, but come Thursday afternoon bellies closed $5.97 higher, which pulls the carcass price higher too. Pork cutouts totaled 343.97 loads with 309.48 loads of pork cuts and 34.49 loads of trim. Pork cutout values: up $0.72, $98.46. Thursday's slaughter is estimated at 491,000 head, steady with a week ago and 10,000 head more than a year ago. Wednesday's slaughter was revised to 484,000 head. The CME Lean Hog Index for Oct. 25: down $0.34, $94.47.
Pork net sales of 20,300 mt were primarily for Mexico (16,900 mt), China (5,600 mt) and South Korea (1,400 mt).
FRIDAY'S HOG CALL: Lower. Packers have already bought up the hogs they needed this week, so Friday's cash market isn't expected to see much support.
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