Cattle country remains generally quiet this morning with significant business possibly delayed until after tomorrow's on feed report. We have seen a few bids in the South as high as $110.
Some asking prices have been restated around $112 plus in the South and $178 plus in the North. Hog buyers are out working with bids ranging from .50 to $1 higher (mostly $1 higher). Corn futures are trading 2 cents plus higher in the early going, supported by light short covering. The stock market is lower this morning with the Dow 92 points lower and the Nasdaq off 62.
Live contracts are 7 to 50 lower in the early rounds as traders cautiously jockey ahead of cash news and the October 1 on feed report due out tomorrow afternoon. Freezing JBS yesterday, Brazilian counts have forced 7 plants in the state of Mato Grosso area to close.
Initially, some feared that this might negatively impact Brazil's ability to export beef, but the board doesn't seem to care much. In fact, some Brazilian officials have said JBS has many other plants from which to source export needs. Open interest on Wednesday decreased by 886 (329,351). Spot October liquidated by 1,865 (5,925) and December declined by 1,091 (145,849). DTN projected slaughter for today is 118,000 head.
Feeder futures are also moderately lower in the early going, off 10 to 65. The premium status of the cash index should limit the level of selling pressure on nearby issues. Open interest on Wednesday decreased by 199 (60,547). CME cash feeder index for 10/17: 155.26, up 0.20.
Lean hog futures are extending yesterday's rally this morning. Prices are currently 15 to 70 higher with nearby issues outperforming deferreds. Needless to say, the impressive strength of the cash market this month continues to lend solid support to spot December. Open interest on Wednesday decreased by 3,455 (245,600).
Spot December added 205 (117,994) and February increased by 247 (47,063). Cash lean index 10/17: 62.21, up 1.21. DTN projected slaughter for today is 465,000 head. Saturday's kill should total close to 195,000.
John A. Harrington can be reached at firstname.lastname@example.org
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