GENERAL COMMENTS:
The livestock complex is off to a mixed start as the corn market's surge has the cattle complex rocked back on its heels, but the lean hog complex is keeping with its aggressive rally. Cash cattle are expected to lend support again this week as they'll likely trade $1.00 higher, but unless corn prices stabilize the feeder cattle market could be in for a tough week. December corn is up 16 1/4 cents per bushel and December soybean meal is up $3.00. The Dow Jones Industrial Average is down 181.62 points.
LIVE CATTLE:
The live cattle market started the day out stronger but with the pressure from the corn complex growing stronger as the day ticks by, the live cattle market is now trading lower too. October live cattle are down $0.45 at $144.82, December live cattle are down $1.00 at $147.05 and February live cattle are down $0.87 at $150.90. The technical side of the market will again be looking for support as it would like to break out of its sideways trading range but is going to need ample fundamental assurance that the market's support is there. Fat cattle will likely trade higher again this week, which will bode well for the market, but traders will also be eyeing boxed beef prices and throughput as key factors to gauge the market's strength. New showlists appear to be mixed, higher in Kansas, somewhat lower in Nebraska/Colorado, and lower in Texas.
The majority of last week's trade took place on Thursday with Southern live cattle traded $143 to $144, which was steady to $1.00 higher than prior week's weighed average. Northern dressed deals ranged from $228 to $233, mostly at $230 however, which was $1.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 98,683 head. Of that 74% (73,323 head) were committed for the nearby delivery, while the remaining 26% (25,360 head) were committed for the deferred delivery.
Boxed beef prices are mixed: choice down $0.41 ($245.66) and select up $0.34 ($216.47) with a movement of 66 loads (24.30 loads of choice, 24.46 loads of select, 8.26 loads of trim and 8.92 loads of ground beef).
FEEDER CATTLE:
It was Feb. 24, 2022, when Russia invaded Ukraine and, to some degree, the relevance of war has been an underlying factor of the markets ever since and obviously still is today. The crashing prices that we're seeing in the feeder cattle complex largely has to due with the pressures that are stemming from the corn market's rally. As tensions between Russia and Ukraine only worsened over the weekend (with damage done to the Kerch bridge, and the 75 missiles that Russia fired), U.S. grain prices have perked back up as the likelihood of Ukraine getting grain shipped out of the country peacefully seems like a far-fetched idea at this point. Nevertheless, with nearby corn prices pushing past $7.00 a bushel, feeders have waived their white flag and are trending $2.00 to $3.00 lower. October feeders are down $3.17 at $171.55, November feeders are down $3.35 at $172.27 and January feeders are down $3.05 at $173.55.
LEAN HOGS:
The lean hog market has set out to trade aggressively through Monday's market and, thus far, the complex has successfully been able to do so. The deferred contracts of May 2023 through August 2023 are trading slightly lower, but the nearby contracts are keeping their elevated position. December lean hogs are up $2.40 at $79.55, February lean hogs are up $1.25 at $81.20 and April lean hogs $0.05 at $85.45. Packers are expected to be aggressive buyers again this week, though their interest may not surface until Tuesday or later. Monitoring pork prices will again be important this week as packers need to see demand and are worried that some consumers could trade out their pork dishes for chicken as poultry prices are softening.
The projected lean hog index for Oct. 7 is up $0.33 at $92.98, and the actual index for Oct. 6 is down $0.12 at $92.65. Hog prices are lower on the Daily Direct Morning Hog Report, down $4.52 with a weighted average of $83.12, ranging from $81.00 to $92.50 on 3,676 head and a five-day rolling average of $87.79. Pork cutouts total 205.24 loads with 177.47 loads of pork cuts and 27.77 loads of trim. Pork cutout values: up $0.94, $102.48.
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