AFTERNOON LIVESTOCK COMMENTS
Rick Kment, DTN Livestock Analyst
GENERAL COMMENTS: According to the closing report, the Iowa hog base is $1.75 higher compared with the Prior Day settlement ($96.00-$102.00, weighted average $101.30). Corn futures continued their march down, with September closing 3 cents lower, December and March 4 cents lower.
LIVE CATTLE: Futures closed higher, up 35 to 142. Strong buyer support slowly developed through the trading session, and interest remained steady. The combination of traders expecting higher cash cattle prices and strong gains in the feeder cattle futures market encouraged more buying. Traders are looking for firmer boxed beef values over the near future. Front-month October futures are having a difficult time breaching the $160 per cwt level over the last couple of trading sessions. If this continues, it could limit the long-term support in all live cattle futures. Beef cut-outs: sharply mixed (choice, $251.08, down $0.31; select, $238.68, up $0.84) with light to moderate demand and offerings (66 loads of choice cuts, 63 loads of select, 34 loads of trimmings, 21 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to $3 higher. With bids still undeveloped and aggressive asking prices holding strong going into midweek, it is likely that it may be the end of the week before active trade is seen. Packers are expected to need to see additional support in boxed beef values in order to improve margins over the short term, or they will try to wait out the market as long as possible. Feed yard managers at the same time remain as aggressive as ever given the short-bought status of packers and recent price surges.
FEEDER CATTLE: Futures closed higher, up 130 to 207. The combination of aggressive gains in live cattle futures, lower grain markets and sharply higher cash feeder cattle futures led to another surge in price levels through the entire complex. The push to contract highs through all nearby contract months could bring additional aggressive buying at midweek. Feeder cattle futures will be focusing on additional direction from grain markets and the need to sustain additional support through the live cattle complex. 09/08 CME Feeder cash index: 225.95, up .54.