GENERAL COMMENTS:
Monday ended up being a pivotal day for the livestock complex as it sent all three of the livestock markets higher, and in an aggressive manner. The markets seem willing to keep with this supportive tone, but strong fundamental demand from the cash and meat markets will be essential to keep the contracts trading higher midweek. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.56 with a weighted average of $86.24 on 5,058 head. December corn is down 6 1/4 cents per bushel and December soybean meal is down $0.10. The Dow Jones Industrial Average is up 550.99 points.
LIVE CATTLE:
Monday lifted the live cattle market's spirit as the contracts climbed higher through closing, and the spot December contract was even able to take out the market's 40-day moving average. October live cattle closed $0.92 higher at $147.87, December live cattle closed $1.42 higher at $149.20 and February live cattle closed $1.10 higher at $152.20. Helping the contracts keep their supportive tone was the fact that boxed beef prices closed higher and the understanding that the cash market is expected to trade higher this week again. Monday's slaughter is estimated at 126,000 head, 2,000 head less than a week ago but 8,000 head more than a year ago. New showlists appear to be mixed, higher in Kansas, somewhat lower in Nebraska/Colorado, and lower in Texas.
Last week Southern live cattle traded for $145, which is $1.00 higher than last week's weighted average, and Northern dressed cattle sold for $232, which is $2.00 higher than last week's weighted average. Last week's negotiated cash cattle trade totaled 75,624 head. Of that, 81% (61,443 head) were committed for nearby delivery, while the remaining 19% (14,181 head) were committed for deferred delivery.
Boxed beef prices closed higher: choice up $0.45 ($246.98) and select up $1.08 ($216.94) with a movement of 104 loads (62.47 loads of choice, 15.40 loads of select, 6.87 loads of trim and 19.07 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. With front-end supplies as thin as they are, packers are going to have to stay active and engaged in the cash market in order to avoid becoming short bought and having to chase the market potentially $4.00 to $5.00 higher one week.
FEEDER CATTLE:
The feeder cattle contracts were able to trade higher as the market was confident enough to do so thanks to the corn market's lower end ,and thanks to the support that the live cattle complex lent. October feeders closed $0.95 higher at $174.75, November feeders closed $1.62 higher ta $176.40 and January feeders closed $2.15 higher at $177.22. If the live cattle market can continue to trade higher and sees fundamental support from the cash market, then, slowly but surely, the feeder cattle market should be able to trade higher too so long as corn doesn't flirt with trading higher. At Joplin Regional Stockyards in Carthage, Missouri, compared to a week ago, feeder steers weighing under 525 pounds traded steady to $4.00 higher, and the heavier weights traded $2.00 to $5.00 lower. Feeder heifers traded mostly steady to $4.00 lower. Quality cattle are in good demand, but any cattle that are unweaned and nonvaccinated are seeing a steep decrease in price. Feeder cattle supply over 600 pounds was 49%. The CME Feeder Cattle Index for Oct. 14: down $1.03, $173.08.
LEAN HOGS:
The lean hog complex wasn't timid and lackadaisical when Monday rolled around! As traders looked over the marketplace, the lean hog complex was among one of the first markets to begin to trade higher. The market's momentum started to build last week with the supportive WASDE report and strong export demand, and that momentum carried over into Monday's market. December lean hogs closed $2.70 higher at $84.95, February lean hogs closed $2.55 higher at $85.97 and April lean hogs closed $2.65 higher at $89.60. It was good to see the pork cutout values close higher Monday afternoon with the belly leading the charge with a gain of $11.81. Pork cutouts totaled 315.28 loads with 273.65 loads of pork cuts and 41.63 loads of trim. Pork cutout values: up $1.64, $103.50. Monday's slaughter is estimated at 491,000 head, 3,000 head more than a week ago and 18,000 head more than a year ago. The CME Lean Hog Index for Oct. 13: up $0.42, $93.09.
TUESDAY'S CASH HOG CALL: Higher. Packers didn't show the cash hog market much interest on Monday, meaning that their buying will likely be more aggressive on Tuesday.
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