DTN Closing Livestock Comments

GENERAL COMMENTS:

Cash cattle activity has remained completely undeveloped Tuesday with bids and asking prices yet to be seen. The strong support in feeder cattle futures that sparked late day live cattle futures strength may create some interest. But for now, packers and feeders seem confident to wait until later in the week before entering the ring. Active trade is not expected until late in the week, while packers should become more active in the next day or so. According to the closing report, the national hog base is $1.33 lower compared with the prior day settlement ($47.00 to $52.44) weighted average $51.61. Corn futures are lower in light activity. December futures were 4 3/4 cents lower. Dow Jones Index is 110 points lower with Nasdaq up 7 points.

LIVE CATTLE:

Buyer activity solidified late Tuesday following the strong market shift higher in feeder cattle. The underlying tone of the market is firming despite limited gains ($0.27 to $0.82 higher). Live cattle futures shifted higher and lower through the entire session Tuesday until aggressive and unchecked buyer support flooded the feeder cattle during the last hour of trade. This move higher in feeder cattle futures has quickly brought increased, and more consistent, buyer activity, which posted gains of 40 to 70 cents in most contract months. The potential to bring additional solid gains back to the market early Wednesday is helping to focus on underlying support despite the market stuck in a wide sideways long-term market trend. Beef cut-outs: lower, $1.41 lower (select, $198.98) and down $1.47 (choice, $214.08) with light demand and offerings, 118 loads (70 loads of choice cuts, 27 loads of select cuts, five loads of trimmings, 16 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL:

Steady. Limited interest is expected to be seen through early activity Wednesday with bids and asking prices likely to remain generally absent until later in the day. Active trade is expected to be seen late in the week, which could limit additional cash interest through most of the day.

FEEDER CATTLE:

Aggressive gains flooded through feeder cattle trade late Tuesday with triple-digit market swings racing into nearby contracts in the last hour of trade ($0.60 to $3.25 higher). Nervousness seen in cattle trade early in the session was quickly and aggressively replaced by strong buyer support moving into the complex. These latest moves had little impact on spot November contracts, although the rest of the complex posted triple digit gains based on commercial interest stepping back into the complex. January futures led the market higher with a $3.25 per barrel rally based on unrestricted buyer support seen late Tuesday. CME cash feeder index for 11/12 is $149.89 down $0.70.

LEAN HOGS:

Trade activity remains light to moderate through most lean hog trade with December contracts leading the complex higher ($0.30 lower to $0.75 higher). Late day support moved into the spot month December contracts following the firm tone seen across the complex in spring 2019 contract months. The concern of still strong production levels has continued to erode deferred futures trade with summer 2019 contracts closing steady to 30 cents lower despite the limited trade. Pork cuts trickled lower in active product movement with primal cuts shifting widely in both directions through the day. Pork cutout values fell $0.14 per cwt, moving to $70.69 per cwt. CME cash lean index for 11/09 $61.87 down $0.90. DTN Projected lean index for 11/12 $61.20 down $0.67.

WEDNESDAY'S CASH HOG CALL:

Steady to $1.50 Lower. Firm follow through pressure is expected to be seen through cash hog trade early Wednesday morning. The overall ability for packers to secure needed procurement levels while limiting spending limits day after day attests to the amount of market ready hogs already in the pipeline. Slaughter numbers are expected to be seen at 475,000 head Wednesday morning. Saturday runs are expected to be seen at 279,000 head.

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

(CZ)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.