GENERAL COMMENTS
It was a good day for the livestock complex as the market found ample support from traders, and now eagerly looks to Thursday, and its export data, for direction. There was a small movement of cattle traded Wednesday afternoon in both the North and the South for steady prices with last week's weighted averages. Hog prices closed higher on the Daily Direct Afternoon Hog report, up $0.61 with a weighted average of $86.16 on 9,885 head. December corn is down 1 1/2 cents per bushel and December soybean meal is down $3.30. The Dow Jones Industrial Average is down 39.09 points.
LIVE CATTLE:
It was a mixed day for the live cattle complex as the contracts performed better than anticipated, but the combination of steady cash cattle trade and lower boxed beef prices casts somewhat of a wet blanket over the market's fundamentals. It's extremely supportive that the spot February contract was about to close above both it' 40-day and 100-day moving average, which continues to build a new support plane in the contract around $152.55. Thursday's export report could be a gamble for the cattle complex as the dollar has fallen, which always helps exports, but we may not see as aggressive buying as hoped for. Both the North and the South traded a handful of cattle for steady money with last week's business, which is commendable given that it's the week before a major holiday. Northern dressed cattle traded for $242, which is steady with last week's weighed average, and Southern live cattle sold for $150 which is also steady with last week's weighted average.
Wednesday's slaughter is estimated at 129,000 head, steady with a week ago and 7,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.27 ($257.09) and select down $0.41 ($231.35) with a movement of 170 loads (114.10 loads of choice, 34.97 loads of select, 4.30 loads of trim and 16.16 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady. Given that cattle have now traded in both regions, it's likely that prices remain steady with the week's tone. More cattle are expected to trade ahead of the week's end, however.
FEEDER CATTLE:
The feeder cattle complex was able to close higher as nearby corn contracts closed $0.01 lower. January feeders closed $0.45 higher at $177.47, March feeders closed $0.45 higher at $180.25 and April feeders closed $0.62 higher at $183.65. It did help that the cash cattle market saw a modest movement of cattle trade steady and that the live cattle contracts close higher. More than anything, feeders added mildly to their position as they aimed to bounce back after Tuesday's sharply lower end. At Philip Livestock Auction in Philip, South Dakota, compared to last week, feeder steers under 500 pounds sold $4.00 to $6.00 higher, and feeder steers weighing 500 to 700 pounds traded steady to $2.00 higher. Feeder heifers weighing 450 to 550 pounds traded steady to $2.00 higher, those weighing 550 to 600 pounds sold $2.00 to $3.00 higher and those weighing 650 to 850 pounds traded steady to $2.00 higher. Feeder cattle supply over 600 pounds was 29%. The CME Feeder Cattle Index for Nov. 15: down $0.20, $174.98.
LEAN HOGS:
The lean hog complex waltzed out of Wednesday's market with a slightly higher close that largely stemmed from traders' willingness to push the marekt higher as opposed to the day's fundamentals. Fundamentally speaking, the market closed mixed with a strong slaughter by the day and a note from USDA that Tuesday's slaughter was actually 5,000 head more than originally stated, but that may or may not offset the disappointing news from pork cutout values which closed $2.07 lower. It was hard for the carcass to close higher as bellies dropped $7.14, and the fell $4.12, but it is worth noting that the picnic closed $5.03 higher. Once again, the wild nature of pork cutout values continues. Heading into Thursday's market, the morning's export data will significantly influence the day's moral. December lean hogs closed $0.25 higher at $85.57, February lean hogs closed $0.27 higher at $90.35 and April lean hogs closed $0.12 higher at $95.62. Pork cutouts totaled 316.05 loads with 262.78 loads of pork cuts and 53.26 loads of trim. Pork cutout values: down $2.07, $93.63. Wednesday's slaughter is estimated at 493,000 head, 17,000 head more than a week ago and 13,000 head more than a year ago. Tuesday's hog slaughter was revised to 495,000 head. The CME Lean Hog Index for Nov. 14: down $0.12, $88.53.
THURSDAY'S HOG CALL: Lower. Packers have supported the market two days in a row now, which likely means that they'll be less aggressive throughout the remainder of the week.
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