Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LIVE CATTLE COMPLEX
October live cattle finally filled the gap from 218.02 down to 216.75 shortly after the open and dropping to a low of 216.10. It settled 217.22 inside the gap and below all moving averages.
December dropped into the gap but with traders bear spreading October/December, it didn’t come close to filling the gap as traders are buying December.
Traders are using the last 2 cattle on feed reports with the august report up 2% more on feed and the September report with 1 percent more on feed which is near term bearish. Tuesday packers increased slaughter with the plants in bringing in some cattle that were backed up last week.
LEAN HOG COMPLEX
Hogs are bull spreading December through April. It’s a good indicator. Was it simply a turnaround Tuesday off the lows or because traders have been bull spreading and a move from the deep discounted lows especially for December?
Trading is moving from a non-spot into a spot month where it will converge with cash in about two weeks. Pork prices should move up as retailers should show pork as they usually do in October during national pork month. There is the possibility even though light that China buys pork and better yet if Mexico increases buying.
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