GENERAL COMMENTS:
It was hard to find anything except positive news in the livestock complex Thursday with triple-digit gains flooding the market and nearby feeder cattle and lean hog trade posting sharp gains at the end of the session. Outside markets were just as bullish during the Thursday session, with the exception of corn and soybean meal prices, other outside markets turned actively higher. Aggressive gains in stock markets also helped to offset some of the negative pressure across the financial markets. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.33 with a weighted average of $68.49 on 5,621 hogs. December corn closed down 5 at $4.7 and December soybean meal closed down $4.10 at $426.3. The Dow Jones Industrial Average is up 564.50 at 33,839.08.
LIVE CATTLE:
Firm gains developed in live cattle futures Thursday, but compared to the previous day when live cattle markets led the complex higher, Thursday's moves left live cattle contract prices a distant follower to the gains in feeder cattle trade. With all contracts able to close $1 per cwt higher or greater, there is very little negative you can assess about the recent movements and support seen in live cattle contracts. The focus on keeping futures prices in line with beef product moves and trade activity well grounded, may keep price volatility at bay for now. December contracts remain $4 per cwt lower than recent October highs, but additional focus on holiday beef demand may quickly narrow that gap over the next couple of weeks. Cash cattle markets remain quiet and generally untraded. Even though a few cattle have been reported sold through the week, there is not enough to establish a trend in the market as feeders continue to keep asking prices elevated going into the end of the week.
Asking prices remain at $294 dressed basis in the North, and $188 in the South live basis. The few bids seen in the north are still at $290 to $292 per cwt. There seems very little incentive for sellers to show any interest at this poin, and could hold out until late Friday if packers do not become more aggressive with bids. December live cattle closed $1.05 higher at $184.675, February live cattle closed $1.25 higher at $186.425 and April live cattle closed $1.23 higher at $188.775.
Thursday's slaughter is estimated at 124,000 head, 1,000 head less than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed mixed: choice up $2.35 ($304.53) and select down $4.21 ($274.34) with a movement of 192.31 loads (104.34 loads of choice, 34.56 loads of select, 31.08 loads of trim and 22.33 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $2 higher. The expectation of higher cash cattle trade is still creating optimism through the cattle market. It will be interesting just how strong feeders hold onto current asking prices as Friday progresses.
FEEDER CATTLE:
Feeder cattle futures were the equivalent of the livestock market rocket ship Thursday with active triple-digit gains flooding into the complex and gaining momentum through the entire trading session. Over the last two weeks, feeder cattle futures have seen the least market rally of all livestock trade, which ended Thursday as nearby contracts posted gains of $4 per cwt at the end of the session. This moved nearby contracts above $242 per cwt and the highest price in nearly two weeks. It is uncertain just how much additional buyer support remains behind this sharp rally, but the tone of the market seems to be firming as traders continue to distance themselves from recent market lows. November feeders closed $4.05 higher at $242.625, January feeders closed $4.15 higher at $242.175 and March feeders closed $4.10 higher at $244.425. The CME Feeder Cattle Index for Oct. 31: up $0.02, $237.25.
LEAN HOGS:
Strong gains developed and held in lean hog futures as buyers quickly and aggressively stepped back into the market following a strong price pullback Wednesday afternoon. Triple-digit gains seen across all nearby and upcoming summer contract months is pointing to prices that could easily break through resistance levels seen in early October. A move above $73.57 would pass October highs and create the potential for additional buyer momentum to develop. Even at these levels, the lean hog complex remains well confined within a wide trading range.
December lean hogs closed $3.13 higher at $73.275, February lean hogs closed $2.78 higher at $76.225 and April lean hogs closed $2.40 higher at $81.50. Thursday's hog slaughter is estimated at 487,000 head, 1,000 head more than a week ago and 2,000 head more than a year ago. Pork Cutouts totaled 286.21 loads with 254.55 loads of pork cuts and 31.66 loads of trim. Pork cutout values are up $0.91 at $87.41. The CME Lean Hog Index for Oct. 31: down $0.19, $76.94.
FRIDAY'S HOG CALL: Steady to $1 higher. Firm support in futures trade and pork cutout values is expected to create firmness in end of the week cash hog prices. Even though cash hog prices softened slightly Thursday, end of the week price shifts are likely to be steady to higher.
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