GENERAL COMMENTS:
The livestock complex is off to a strong start for the week as the three markets (live cattle, feeder cattle, and lean hogs) all see higher prices, and even though the week is young, meat demand is off to a stronger start too. December corn is down 1 1/4 cents per bushel and December soybean meal is down $1.90. The Dow Jones Industrial Average is up 595.64 points.
LIVE CATTLE:
The live cattle market is off to a strong start as the market not only sees moderate support technically, but the market was also surprised to see midday boxed beef prices print higher. October live cattle are up $1.35 at $144.62, December live cattle are up $0.82 at $147.85 and February live cattle are up $0.92 at $151.57. Given that the market appears to have found a bottom last week, higher trade isn't out of the question so long as traders stay engaged and the market isn't cut short with any worse news about our economy. The cash cattle market is expected to trade at least steady this week, if not a little higher ever given that showlists are current and that packers are continuing to want to buy week in and week out to avoid becoming short bought when supplies becoming inherently thinner. Showlists appear to be lighter in all feeding regions.
Last week, Northern dressed sales have had a range of $225.60 to $233, mostly $228, which is $1.00 lower than last week's weighted average. Southern live cattle have been marked at $143, which is fully steady with last week's weighted averages. Last week's negotiated cash cattle traded totaled 100,258 head. Of that, 71% (71,469 head) were committed for the nearby delivery while the remaining 28% (28,789 head) were committed for the deferred delivery.
Boxed beef prices are higher: choice up $1.38 ($245.13) and select up $1.70 ($221.83) with a movement of 54 loads (31.58 loads of choice, 7.57 loads of select, 6.94 loads of trim and 8.00 loads of ground beef). The choice/select spread sits at $23.30.
FEEDER CATTLE:
With the corn complex trending mostly steady and the live cattle market lending feeders support, the feeder cattle contracts are trading modestly higher into Monday's afternoon. October feeders are up $0.85 at $175.02, November feeders are up $0.75 at $175.37 and January feeders are up $0.82 at $176.50. The market appears to have developed a new support plane around $174.50 in the November contract and with no nearby concerns of resistance, the market has all the potential in the world to trade higher. Higher corn prices and any more deterioration in on our economy will likely weaken feeder cattle prices, but stronger fat cattle trade and a higher tone in the live cattle contracts will add support.
LEAN HOGS:
The lean hog complex is running into Monday's afternoon fully higher as the market believes that a support plane was established in last week's market. Last week the market was fanned higher on Friday thanks to supportive Quarterly Hogs and Pigs report and strong export report than came throughout Thursday's trade. The market's biggest concern moving forward will continue to be demand, which packers are hoping will come from both domestic and foreign markets. Late last week slaughter speeds dipped slightly, which will also be a factor that needs to continue to be monitored. October lean hogs are up $0.52 at $89.75, December lean hogs are up $1.65 at $77.87 and February lean hogs are up $0.82 at $80.25.
The projected lean hog index for Sept. 30 is down $0.58 at $94.33, and the actual index for Sept. 29 is down $0.23 at $94.91. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.41 with a weighted average of $82.67, ranging from $79.00 to $97.50 on 3,150 head and a five-day rolling average of $88.12. Pork cutouts total 163.57 loads with 136.09 loads of pork cuts and 27.48 loads of trim. Pork cutout values: up $5.39, $102.98.
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