DTN Closing Livestock Comments

Live, Feeder Futures Close With Mixed Results

(DTN file photo)

GENERAL COMMENTS:

There was more life on Mars Tuesday than in feedlot country. Neither buyers nor sellers showed any interest in doing business, cautiously watchful for predictive action in futures and the wholesale beef market. According to the closing report, the Iowa hog base is $0.99 higher compared with the Prior Day settlement ($69.00-$73.00, weighted average $72.58). Corn futures settled roughly 3 cents higher, benefiting from the updrafts running through the bean and wheat markets. U.S. stocks closed lower with traders a bit nervous in the face of more indications of slowdown in China's economy. The Dow closed 49 points lower with the Nasdaq off 42.

LIVE CATTLE:

Spot October settled 50 points higher, supported by higher cut-outs and ideas of greater packer spending before the week is out. But the balance of the trade finished 2 to 37 lower, checked by the sell-off of bull spreaders and long liquidation. Beef cut-outs: sharply higher, up $3.16 (choice, $208.46) to $4.22 (select, $203.34) with good demand and moderate-to-heavy offerings (73 loads of choice cuts, 49 loads of select cuts, 15 loads of trimmings, 29 loads of coarse grinds).

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WEDNESDAY'S CASH CATTLE CALL:

Higher. Although we could start to see a few preliminary bids at midweek, the chance for significant trade volume before Thursday or Friday seems rather remote.

FEEDER CATTLE:

The feeder trade closed on a mixed basis with changes ranging from 32 higher to 12 lower. Spot October gained more on deferred discounts despite the fact of the cash index premium. For the most part, nearby CME cash feeder index: 10/12: $185.52, up $1.52.

LEAN HOGS:

Lean futures closed 7 to 107 higher with soon-to-be-spot December leading the way. October is set to expire at high noon on Wednesday, probably close to 700 points above December. While impressive with early fall fundamentals, late-year traders remain wary of the possible combination of swelling production and faltering demand over the next 30-60 days. Carcass value closed moderately lower, checked by weakness in the butt, ham, and belly primals. Pork cut-out: $88.92, off $0.55. CME cash lean 10/09: $74.77, off $0.07 (DTN Projected lean index for 10/12: $74.85, up $0.08).

WEDNESDAY'S CASH HOG CALL:

Steady to $1 higher. The combination of greater packer spending on Tuesday and decent negotiated trade volume totals suggests that buyers will resume work in the morning with steady/firm bids.

John A. Harrington can be reached at john.harrington@dtn.com

(CZ)

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