DTN Closing Livestock Comments

GENERAL COMMENTS:

Cash cattle markets started to show limited activity with light trade in the North. This is not enough to establish cash market activity with prices seen from $170 to $174 dressed basis. Additional bids and asking prices are expected to develop through midweek, although active trade may not be seen until Thursday or Friday. According to the closing report, the national hog base is $0.40 lower compared with the Prior Day settlement ($54-$63.25, weighted average $59.86). Corn futures are lower in light activity. December futures were 3 cents lower. Dow Jones Index is 547 points higher with Nasdaq up 214 points.

LIVE CATTLE:

Mixed trade offset early pressure with futures closing $0.72 lower to $0.12 higher. Sharp pressure in feeder cattle futures put additional pressure on the entire cattle complex as traders continue to focus on pulling back from early week gains. This could leave markets mixed through the next couple of days. Beef cut-outs: mixed, $0.66 higher (select, $192.55) to down $0.19 (choice, $204.61) with light demand and offerings 133 loads (60 loads of choice cuts, 37 loads of select cuts, 15 loads of trimmings, 21 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady. Increased bid and asking prices are likely to develop midweek. Active trade may not develop until futures trade stabilize.

FEEDER CATTLE:

Sharp losses developed Tuesday as increased concern surrounding production costs weakened trade activity. Futures closed $0.32 to $1.07 lower. Sharp pressure was seen through the entire complex Tuesday as traders seemed focused on additional market pressure and the potential for increasing commercial selling. This could add even more underlying long-term pressure to the complex as traders offset early week gains. CME cash feeder index for 10/15 is $155.36, down $0.90.

LEAN HOGS:

Mixed trade was seen as traders were unable to hold strong early gains. Futures closed mixed, $0.32 lower to $0.62 higher. Sharp gains held through nearby lean hog trade through most of the session, but late-day pressure brought additional selling activity into deferred contracts. This may add increased pressure through the entire market if recent market momentum is not able to hold through the rest of the week. Pork cuts slipped lower in firm pressure in several primal cuts. Pork cutout values fell $0.63 per cwt, moving to $80.87 per cwt. CME cash lean index for 10/12: $68.75, down $0.24. DTN Projected lean index for 10/15: $68.59, down $0.16.

WEDNESDAY'S CASH HOG CALL:

50 cents lower. Cash markets are expected to be steady to $2 per cwt lower early Wednesday with prices steady to 50 cents lower in most areas. Slaughter numbers are expected to be seen at 474,000 head Wednesday morning. Saturday runs are expected at 232,000 head.

Rick Kment can be reached at rick.kment@dtn.com

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