Feedlot country was typically quiet as packers limited efforts to showlist assessment. Ready numbers are mixed, smaller in Nebraska, Colorado, and Kansas, but larger in Texas. Overall, the early month offering looks somewhat larger. According to the closing report, the national hog base is .03 lower ($42.00-50.00, weighted average $48.58). Corn futures closed 3-4 cents lower, checked by commercial selling and the approaching pressure of harvest in full stride. The stock market opened the last quarter of 2017 by closing significantly higher. The Dow surged by 152 points and the Nasdaq climbed 20.
Live futures opened somewhat higher, but it wasn't long before waves of sell orders began to roll. By the time the high tide of long liquidation and technical selling had crested, contracts settled 92 to 140 lower. Spot October closed just above support at its 40-day moving average. Conversely, December settled back below is 100-day moving average (further underscoring the significance of last Monday's bearish gap. Finally, given the way cattle and hog futures tracked in extremely opposite directions Monday, it's a good bet that live issues were further pressured by the unwinding of cattle/hog spreads. Beef cut-outs: mixed, up .60 (choice: $197.22) to off .22 (select: $188.28) with light to moderate demand and moderate offerings (47 loads of choice cuts, 27 loads of select cuts, 12 loads of trimmings, 15 loads of ground beef).
TUESDAY'S CASH CATTLE CALL:
Steady. Bids and asking prices should remain poorly defined in the morning with the development of significant trade volume possibly delayed until the second half of the week.
Following the negative lead of their live counterparts, feeder issues closed 95 to 240 in the red. Even the defensive action in the corn market didn't help much. In a bit of cold comfort, October and November at least managed to close above last week's lows. On an estimated run of 5,600 head (below 6,788 counted last week and 6,104 in 2016), Oklahoma City sold feeder steers under 800 lbs steady to $3 lower. Heavier steers sold about steady in a light test. A light run of feeder heifers was marked about steady. CME cash feeder index: 09/29: 154.30, up .34.
Despite last Thursday's confirmation of expanding production, traders here continue to question the propriety of the board's pre-report caution. Lean contracts kept correcting in that regard, closing mostly 97 to 202 higher. Spot October did manage to close above the alarming gap created on September 22. More impressively, the December contract spiked above its 100-day moving average for the first time since August 16. The carcass value closed moderately lower thanks to softer demand for loin and picnic cuts. Pork cut-out: $72.78, off .55. CME cash lean index for 09/28: 54.84, off .74 (DTN Projected lean index for 09/29: 54.29, off .55).
TUESDAY'S CASH HOG CALL:
Steady to $1 higher. Look for cash bids to open steady/firm in the morning in the face of more moderate offerings.
For more from John, see www.feelofthemarket.com
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