Wednesday, October 18, 2023

Wednesday Closing Livestock Market Update - Live Cattle, Lean Hog Futures Mixed

Feeder cattle futures were the market to watch Wednesday with active pressure seen in nearby and deferred contracts. The quick and aggressive pullback from Tuesday's market rally seemed to cause some follow-through concern in deferred live cattle trade.

Cattle and hog futures remained mixed through most of the trading session with nearby contracts closing higher, while light to moderate weakness stepped into deferred contracts. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.46 with a weighted average of $73.75 on 8,026 hogs. December corn closed up 3 at $4.92 and December soybean meal closed up $14.00 at $413.8. The Dow Jones Industrial Average is down 332.57 at 33,665.08.

LIVE CATTLE:

Live cattle futures regained light to moderate support in nearby contracts Wednesday with October through April contracts closing steady to 32 cents per cwt higher. December futures were able to close above the 40-day moving average, but just barely, still creating concerns that prices may continue to hover in the currently sideways trading range over the near future. Deferred prices posted light to moderate losses, although trade interest through the entire complex remained lackluster at best, creating the expectation that traders are looking for additional direction from outside markets and the potential to stabilize feeder cattle trade over the next couple of days.

Cash cattle trade remains generally quiet Wednesday afternoon with asking prices seen at $185 and higher live in the South and $295 and higher in the North, dressed basis. So far this week, there is only a handful of cattle reported sold in the North at $289 to $293 per cwt. This is not enough to establish an adequate trend. It is expected that asking prices will continue to hold on Thursday morning as feeders look for packers to become more aggressive in the bidding process over the last two days of the week.

October live cattle closed $0.23 higher at $185.725, December live cattle closed $0.33 higher at $187.20 and February live cattle closed $0.08 higher at $191.075. Wednesday's slaughter is estimated at 127,000 head, 1,000 head more than a week ago and 2,000 head more than a year ago.

Boxed beef prices closed lower: choice down $1.28 ($303.86) and select down $0.28 ($278.35) with a movement of 172.61 loads (93.93 loads of choice, 44.01 loads of select, 7.06 loads of trim and 27.61 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady to $1 Higher. With bids and asking prices slowly developing through the day, feeders continue to hold for steady to higher values, focusing on the potential of firming beef values ahead of the upcoming holiday season.

FEEDER CATTLE:

Feeder cattle futures posted active losses midweek as a combination of uncertainty ahead of Friday's cattle on feed report as well as firm support in grain markets caused trades to quickly back away from previous gains posted Tuesday.

October contracts seemed to be the leader of the downward price swing, although by the end of the session, January contracts posted more aggressive losses than spot-month contracts. The move lower is now placing October contracts within 22 cents of October lows set last week, essentially totally erasing the $5 October rally that developed recently. This could create long-term concern about market support through the end of the month. October feeders closed $1.68 lower at $247.125, November feeders closed $0.73 lower at $249.725 and January feeders closed $1.90 lower at $250.9.

The CME Feeder Cattle Index for October 16: up $0.27, $247.1.

LEAN HOGS:

Lean hog futures trade remained sluggish through most of the Wednesday session with mixed trade seen across the complex during most of the morning. Nearby futures gained limited buyer support in late-day trade, closing above $68 per cwt in spot December contracts, although this upward movement is not enough to offset the overall pressure seen in the market over the last couple of weeks.

Even though spot futures prices have bounced off contract lows, the tone of the market remains weak and will need consistent buyer interest to shift the market trend higher. December lean hogs closed $0.48 higher at $68.025, February lean hogs closed $0.25 higher at $72.30, and April lean hogs closed $0.08 lower at $78.925.

Wednesday'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 305.59 loads with 250.73 loads of pork cuts and 54.86 loads of trim. Pork cutout values are down $1.60 at $87.95. The CME Lean Hog Index for October 16: down $0.45, $81.15.

THURSDAY'S HOG CALL: Steady to $1 Higher. Gains in cash hog values midweek combined with the stability of futures trade, is expected to help solidify early cash values in the hog market Thursday morning. Initial market moves may quickly be adjusted based on the overall direction of futures trade, as well as the ability to fill needed plant needs through the end of the week and well into next week.




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