GENERAL COMMENTS:
Throughout the day the livestock complex saw ample support as traders eagerly approached the market and now are looking to the market's fundamentals to support their move. Heading into Tuesday, feedlots are expected to price cattle higher, and it wouldn't be surprising to see cash hogs trade higher too. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.30 with a weighted average of $92.16 on 6,412 head. December corn is up 1 cent per bushel and December soybean meal is up $7.60. The Dow Jones Industrial Average is up 197.26 points.
LIVE CATTLE:
The live cattle complex closed modestly higher which puts the pressure on the market's fundamentals to support the move so traders can continue to trek to higher ground. October live cattle closed $0.22 higher at $145.72, December live cattle closed $0.07 lower at $150.90, and February live cattle closed $0.15 higher at $155.25. If the cash cattle market can indeed trade cattle $1.00 to $2.00 higher, than it's not unlikely that traders consider pressing beyond the market's three-month resistance of $151.77. But that's not to say feedlots won't have their work cut out for them this week. With boxed beef prices waning, packer's margins continue to be whittled on, which makes them even tougher negotiators to deal with. But so long as processing speeds don't decline, they're still going to need cattle. New showlists for the week are mixed -- somewhat higher in Texas, but lower in Kansas, Colorado and Nebraska. Monday's slaughter is estimated at 127,000 head -- 2,000 head more than a week ago and 8,000 head more than a year ago.
Last week Southern live cattle traded for $142, which was $1.00 higher than the previous week's weighted average, and Northern dressed cattle traded for $226 to $227, which was steady to $1.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 77,475 head. Of that 74% (57,540 head) were committed for the nearby delivery, while the remaining 26% (19,935 head) were committed for deferred delivery.
Boxed beef prices closed mixed: choice up $0.05 ($252.45) and select down $0.76 ($225.89) with a movement of 137 loads (78.25 loads of choice, 39.50 loads of select, 5.52 loads of trim and 14.09 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. Packers used the weeks surrounding the Labor Day weekend as an opportunity to brake-check the cash cattle market. But in doing so they also made it so they need to buy cattle now to ensure they'll have enough cattle to fulfill upcoming kills.
FEEDER CATTLE:
Even with the corn market closing just above steady prices, the feeder cattle complex looked at the support and momentum that rallied the live cattle market and decided to cling to its more supportive cattle counterpart. October feeders closed $1.05 higher at $182.30, November feeders closed $0.77 higher at $183.52, and January feeders closed $).72 higher at $184.97. The closer the market gets to October the larger the sale receipts are going to become as farmers and ranchers make plans to ship their spring-born calves. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week feeder steers traded steady to $3.00 higher. Feeder heifers under 500 pounds traded $2.00 to $6.00 lower, while heavier weights traded steady. Feeder cattle supply over 600 pounds was 44%. The CME Feeder Cattle Index 9/16/2022: up $1.10, $177.92.
LEAN HOGS:
It was an impressive day for the lean hog complex as not only were most of the contracts able to close higher but the cash hog market even rounded out the day slightly higher. October lean hogs closed $0.42 lower at $96.47, December lean hogs closed $0.17 higher at $88.15, and February lean hogs closed $0.27 higher at $91.92. Pork cutout values dipped by $0.51, which mostly stemmed from the $4.27 regression in hams and the $3.14 regression in the loin. If pork cutout values don't show steady, consistent support, it wouldn't be surprising to see traders keep the market in a sideways trading range until they see the support (either domestically or internationally) they're after. Pork cutouts totaled 347.18 loads with 303.41 loads of pork cuts and 43.77 loads of trim. Pork cutout values: down $0.51, $105.88. Monday's slaughter is estimated at 484,000 head -- 9,000 head more than a week ago and 19,000 head more than a year ago. The CME Lean Hog Index 9/15/2022: up $0.20, $97.97.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. The fact that packers were willing to move the cash hog market higher Monday indicates they're short bought and in need of hogs.
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