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Monday, October 13, 2014

AFTERNOON MARKET UPDATE; Oct. 13

by DTN

AFTERNOON LIVESTOCK COMMENTS
John Harrington, DTN Livestock Analyst

GENERAL COMMENTS: Cattle buyers limited their efforts Monday to the collection of new showlists. The mid-month offering appears to be generally smaller than last week with only Nebraska showing more ready steers and heifers. Some producers floated initial asking prices around $166-$167 in the South and $260 to $265-plus in the North. According to the closing report, the Iowa hog base closed $0.91 lower compared with the Prior Day settlement ($98.00-$108.00, weighted average $106.38). The corn trade surged 10-12 cents higher, sparked by short covering, impressive strength in the bean pit, and more fears of harvesting delays. U.S. stocks on Monday fell for a third session as investors continue to stew over signs of a slowing global economy. The Dow closed 223 points lower with the Nasdaq off 62.

LIVE CATTLE: Futures closed up 72 to 160 higher. Live contracts gapped higher and went on to essentially land an impressive serving of triple-digit gains. Early week buying was fueled by short covering and greater packer spending late last week. Spot October closed at the highest level in the history of live cattle trading. However, the extreme session highs scored last Thursday that triggered key reversals still represent critical overhead resistance (i.e., Beef cut-outs: significantly higher (choice, $248.31, up .64; select, $236.41, up $1.67) with moderate to fairly demand and moderate offerings (64 loads of choice cuts, 38 loads of select, 21 loads of trimmings, 28 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady to $2 higher. Look for a slow round in feedlot country Tuesday with bids and asking prices probably remaining poorly defined until Thursday or Friday.

FEEDER CATTLE: Futures closed up 20 to 140. Although the feeder pit followed the bullish lead of live futures, forward progress was checked to some extent by the major rally in the corn market. On an estimated run of 7,000 head (down from 8,428 last week and 8,985 in 2013), Oklahoma City sold feeder steers $2-5 lower. Their heifer mates were marked $3-$4 lower. Calves traded mostly steady to $3 lower. 10/10 cash index: 242.58, up 3.23.