GENERAL COMMENTS:
Thursday turned into a dismal day in cattle futures trade with live cattle futures falling $1.32 to $2.12 per cwt, while feeder cattle markets led the market down the steep slope, falling as much as $5.52 per cwt at the end of the session in January 2024 contracts. The overall fundamental market moves and questions concerning the upcoming cattle on feed report is not likely to be enough reason to justify the current market swing, which left traders unwilling to step into the complex, leading to sharp triple-digit losses, which disrupted short-term support. Lean hog futures were essentially stable with all of the attention pointed directly at the falling cattle market as nearby lean hog contracts closed within a single-digit price range Thursday. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.59 with a weighted average of $73.16 on 5,495 hogs. December corn closed up 13 at $5.05 and December soybean meal closed up $9.20 at $423.00. The Dow Jones Industrial Average is down 250.91 at 33,414.17.
LIVE CATTLE:
Sharp triple-digit losses flooded into live cattle futures Thursday as traders tried to keep track of the tumbling feeder cattle market with little support from technical or fundamental factors. October live cattle closed $1.33 lower at $184.40, December live cattle closed $1.90 lower at $185.30 and February live cattle closed $2.13 lower at $188.95. Thursday's slaughter is estimated at 125,000 head, 5,000 head more than a week ago and 5,000 head less than a year ago. The aggressive combination of sharp gains in grain trade during the end of the Thursday trading session as well as aggressive feeder cattle losses led the live cattle complex on a bumpy ride through the last half of the trading session. Long-term technical support is not in danger at this point, but the strong move lower in all contracts did push prices well below the 40-day moving average in December and February futures, nearly testing support of the 100-day moving average price level. This could heavily impact the desire and ability for short-term buyers to step back into the market until some needed market stability is seen. Cash cattle trade started to develop Thursday despite the softness in futures trade. Light trade is being reported in the North with deals seen at $294 per cwt. This is generally $2 per cwt higher than last week's weighted average. Trade in the South has not yet been reported. Bids are seen in Texas at $184 per cwt, which may not get additional attention at this point. There will be increased focus on Friday's cattle on feed report as well as early futures price shifts Friday morning, which could spark additional widespread cash market activity.
Boxed beef prices closed mixed: choice up $0.26 ($304.12) and select down $0.87 ($277.48) with a movement of 164.47 loads (97.64 loads of choice, 45.25 loads of select, 5.68 loads of trim and 15.90 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $2 higher. With very light trade seen Thursday at $2 per cwt higher, it is expected that asking prices will remain firm going into the end of the week.
FEEDER CATTLE:
The feeder cattle futures trade Thursday was the definition of a train wreck, as prices tumbled lower due to lack of overall support and questions of how Friday's cattle placements numbers will impact the market in the upcoming Cattle on Feed report. November through May futures posted losses of $5 per cwt or greater by the time closing bell finally gave reprieve to the market tumble for the day. Although price moves were still well away from the daily trading limits, the uncertainty in the cattle market, and higher corn prices adds additional concern to buyer support over the near future. October feeders closed $3.55 lower at $243.575, November feeders closed $5.23 lower at $244.5 and January feeders closed $5.53 lower at $245.375. The CME Feeder Cattle Index for Oct. 17: down $2.27, $244.83.
LEAN HOGS:
Watching the lean hog futures market Thursday was beyond boring, with nearly all of the attention quickly shifting to cattle and grain markets, which posted aggressive late day market swings. The overall lack of attention in the market was evident by the single digit price moves in nearby contracts at the closing bell. Even though prices have not continued the weaker trend seen earlier in the week, there still is limited interest and uncertainty that prices will shift higher in the near future. December lean hogs closed $0.03 lower at $68., February lean hogs closed $0.03 higher at $72.325 and April lean hogs closed $0.03 higher at $78.95.
Thursday's hog slaughter is estimated at 483,000 head, 2,000 head less than a week ago and 5,000 head less than a year ago. Pork Cutouts totaled 323.96 loads with 294.41 loads of pork cuts and 29.55 loads of trim. Pork cutout values are down $0.82 at $87.13. The CME Lean Hog Index for Oct. 17: down $0.45, $80.7.
FRIDAY'S HOG CALL: Steady to $1 higher. Despite the stability in lean hog futures trade, the late week softness in cash hog values and pork cutout values could lead to softer cash prices at the end of the week.
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