GENERAL COMMENTS:
Both the live cattle and lean hog contracts are rallying into Tuesday's afternoon, but the feeder cattle market is trading cautiously as it's watching to see if corn prices jump any higher. Monitoring both boxed beef prices and pork cutouts will be vital Tuesday afternoon and will likely dictate how Wednesday's market is treated. December corn is up 1/2 cent per bushel and December soybean meal is down $0.40. The Dow Jones Industrial Average is up 221.24 points.
LIVE CATTLE:
After enduring a tough sellout on Monday, the live cattle contracts are back to rallying in Tuesday's market. December live cattle are up $0.22 at $151.80, February live cattle are up $1.05 at $153.60 and April live cattle are up $0.82 at $157.25. The spot February contract is teetering with both its 40-day and 100-day moving averages, and if the contract is indeed able to close above that threshold, the market could be building a support plane into the complex. It's too early for any cash cattle trade to have developed, but this week's market is a bit of a gamble as feedlots will again shoot for higher prices, but given that packers sit with cattle committed for the deferred delivery and are buying for a holiday-shortened week, prices could be pressured. Early asking prices in the South are noted at $151 to $152 but are still not established in the North. The market will see another Cattle on Feed report released this Friday and early estimates show that both on feed numbers and placements could be lower than a year ago, but marketings should be about steady.
Boxed beef prices are mixed: choice up $1.39 ($259.37) and select down $0.36 ($232.85) with a movement of 89 loads (45.04 loads of choice, 13.00 loads of select, 4.19 loads of trim and 26.46 loads of ground beef).
FEEDER CATTLE:
It's somewhat surprising to see the feeder cattle market trading as low as it is given that corn prices are only trading steady to $0.01 higher. With breakevens still extremely costly, thanks to high feed prices and expensive freight (just to name a few of feeders' costs), managing every little expense matters this year. January feeders are down $1.37 at $178.07, March feeders are down $0.85 at $180.92 and April feeders are down $0.85 at $183.97.
LEAN HOGS:
The lean hog complex is rallying into Tuesday's afternoon as the market welcomes traders' interest, and it doesn't hurt that cash prices are trading mildly higher either. December lean hogs are up $0.55 at $85.42, February lean hogs are up $1.25 at $90.22 and April lean hogs are up $1.10 at $95.47. The contract is far enough away from resistance that it shouldn't encounter any issues throughout Tuesday's market, but once the spot contract nears $88.00,n it could begin to feel technical pressure as treaders will need to see strong enough fundamental support to take out the resistance plane.
The projected lean hog index for Nov. 14 is down $0.16 at $88.49 and the actual index for Nov. 11 is up $0.02 at $88.65. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.91 with a weighted average of $84.45, ranging from $78.00 to $90.00 on 4,545 head and a five-day rolling average of $85.57. Pork cutouts are unavailable to due technical difficulties at the USDA.
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