GENERAL COMMENTS:
It was a refreshing day for the livestock complex as the market kept its steam through closing and saw higher closes for pork and beef too. Heading into Tuesday's market, feeders will be closely watching the corn complex and feedlots will be looking for packer interest to potentially develop. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $2.41 with a weighted average of $82.67 on 3,150 head. December corn is up 3 1/4 cents per bushel and December soybean meal is up $2.30. The Dow Jones Industrial Average is up 765.38 points.
LIVE CATTLE:
It was a rallying day for the live cattle complex as the market absorbed traders' interest and was surprised to see the afternoon boxed beef report tout higher prices. As we noted throughout the month of September, September has historically been a month where boxes endure seasonal pressure. Now that the market is looking to October and what it may bring, cattlemen are hoping that domestic beef demand sees more interest. October live cattle closed $1.05 higher at $144.32, December live cattle closed $0.97 higher at $148.02 and February live cattle closed $0.90 higher at $151.55. The cash cattle market didn't see much interest, but with showlists lighter in all major feeding regions, feedlots are expected to price cattle higher this week. Southern feedlots have early asking prices starting at $145, and the North has yet to disclose their initial asking prices for the week. Even though packers have bought either right at or more than 100,000 head through the negotiated cash cattle market in the past two weeks, their interest is likely to be moderate again this week. In order to avoid becoming short bought in the weeks to come, packers will need to stay engaged in the cash market moving forward.
Monday's slaughter is estimated at 127,000 head, 2,000 head more than a week ago and 7,000 head more than a year ago.
Boxed beef prices closed higher: choice up $2.19 ($245.94) and select up $1.18 ($221.31) with a movement of 116 loads (65.23 loads of choice, 21.20 loads of select, 11.48 loads of trim, 17.60 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Packers will either play the card that they've got enough cattle bought and keep prices steady, or look to build inventory and potentially pay a little more
FEEDER CATTLE:
It's commending that the feeder cattle complex closed higher while the corn market posted a steady to $0.03 gain in its nearby contracts through closing. And while the addition of three pennies may not seem like much, any movement in the corn market is taken very seriously right now as prices are still incredibly high and drought-related pressures are hiking the expense of other feed resources too. October feeders closed $1.35 higher at $175.52, November feeders closed $1.42 higher at $176.05 and January feeders closed $1.35 higher at $177.02. As the market is now officially into the month of October, feeder cattle sale receipts are expected to grow noticeably. Buyers have been distant from the market as penciling a breakeven on these calves/feeders isn't easy, and with the volatility that's laced throughout the market thanks to inflation and higher interest rates, buyers are seeming to take their time when buying calves to hopefully ensure a breakeven. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, at their midsession point, and when compared to the week before, feeder steers were trading $1.00 to $3.00 lower while feeder heifers sold mostly steady. Steer and heifer calves traded unevenly steady. Extreme drought conditions are still plaguing most of the region, but cooler temperatures are expected this week. Feeder cattle supply over 600 pounds was 39%. The CME Feeder Cattle Index for Sept. 30: down $0.02, $175.44.
LEAN HOGS:
It was a strong day for the lean hog complex as the market not only saw a higher close throughout the futures complex, but pork cutout values closed higher too, and the day's slaughter was above 470,000 head. December lean hogs closed $1.50 higher at $77.72, February lean hogs closed $0.67 higher at $80.10 and April lean hogs closed $0.37 higher at $85.67. When looking through the pork cutout value data, its evident that the day's higher close came from the support that the belly added with it's $14.62 jump. While it's likely that the belly does see more demand as temperatures wane and consumers begin to look for more crockpot meals, it's also true that the belly is a fickle cut and swings violently -- high one day, low the next. Regardless, it's supportive that the futures complex has found the interest of traders and if slaughter speeds can remain elevated and consumer demand show steady interest, then a higher tone isn't out of reach. Once again, demand will likely be the biggest influencer of the lean hog market moving forward as packers won't think twice about reducing slaughter speeds to protect margin. Pork cutouts totaled 297.63 loads with 255.03 loads of pork cuts and 42.60 loads of trim. Pork cutout values: up $2.34, $99.93. Monday's slaughter is estimated at 472,000 head, 12,000 head less than a week ago and 7,000 head more than a year ago. Friday's hog slaughter was revised to 453,000 head, and Saturday's hog slaughter was revised to 107,000 head. The CME Lean Hog Index for Sept. 29: down $0.23, $94.91.
TUESDAY'S CASH HOG CALL: Higher. Packers showed very little interest in Monday's cash hog market, which likely means that they'll have to be more aggressive either Tuesday or Wednesday.
No comments:
Post a Comment