GENERAL COMMENTS:
The livestock complex couldn't avoid the market's looming pressure as investors become more and more fixated on the brutal combination of higher interest rates and hot inflation. The entire livestock complex closed lower and seemed to be focused on one thing -- the economy's weakened state. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $5.54 with a weighted average of $91.88 on 8,882 head. December corn is down 10 1/2 cents per bushel and December soybean meal is down $5.80. The Dow Jones Industrial Average is down 329.60 points.
LIVE CATTLE:
There are your normal "Mondays" and then there are Mondays like today. The live cattle complex wasn't able to pass by the market's overwhelming sellout as traders become increasingly worried about our economy. The live cattle futures dug a considerable hole as the spot December contract closed below the market's 100-day moving average -- which adds yet bearish coat to the market's mix. October live cattle closed $0.77 lower at $143.47, December live cattle closed $1.20 lower at $147.35 and February live cattle closed $1.25 lower at $151.45. The cash cattle market didn't see any interest develop in its market and given that packers bought aggressively last week, it's likely that they use this week's doggish attitude to hold prices steady and they could even try to work them $1.00 or $2.00 lower. New showlists appear to be mixed, somewhat higher in Nebraska/Colorado, but slightly lower in Texas, and lower in Kansas. Monday's slaughter is estimated at 125,000 head - 2,000 head less than a week ago and 6,00 head more than a year ago.
Last week's negotiated cash cattle trade totaled 116,546 head. Of which 66% (77,256 head) were purchased for the nearby delivery, while the remaining 34% (39,290 head) were purchased for the deferred delivery.
Boxed beef prices closed mixed: choice down $0.79 ($247.84) and select up $4.04 ($223.35) with a movement of 110 loads (60.70 loads of choice, 21.56 loads of select, 12.36 loads of trim and 15.23 loads of ground beef). The choice/select spread sits at $24.49.
TUESDAY'S CASH CATTLE CALL: Steady. Given that packers bought 116,000 head last week, it's likely that they give the cash cattle market the cold shoulder this week and use the market's lower tone to keep prices at least steady.
FEEDER CATTLE:
On the bright side, corn closed lower, but unfortunately so did all the other livestock contracts including feeder cattle. With the widespread selling across the commodity markets as fearful concerns about our economy become rooted in everyone's mind -- the feeder cattle complex didn't stand much of a chance at closing higher. September feeders closed $1.25 lower at $176.87, October feeders closed $1.27 lower at $177.07 and November feeders closed $1.20 lower at $177.05. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week and at their midsession point, feeder steers traded steady and feeder heifers traded $3.00 to $6.00 lower. Steer calves were not well tested, and heifer calves traded $10.00 to $15.00 lower. Feeder cattle supply over 600 pounds was 45%. The CME feeder cattle index 9/23/2022: down $1.44, $178.71.
LEAN HOGS:
On a normal day, I'd be thrilled to see cash trading higher on a Monday in the hog complex alongside a stronger pork cutout close and an aggressive slaughter day all to start the week off. But given the state of the economy and the rightful fears of higher interest rates and inflation -- unfortunately those supportive factors of the market don't amount to much today. October lean hogs closed $2.25 lower at $90.37, December lean hogs closed $3.40 lower at $79.40 and February lean hogs closed $3.40 lower at $83.60. Bellied helped the pork cutout figure close higher as they jumped $5.16 higher compared to Friday's end but given that the rest of the market saw hit-and-miss demand, it wouldn't be surprising to see the rest of the week's reports mimic that back-and-forth tone. Pork cutouts totaled 347.77 loads with 289.69 loads of pork cuts and 58.08 loads of trim. Pork cutout values: up $0.53, $101.46. Monday's slaughter is estimated at 484,000 head -- 6,000 head more than a week ago and 10,000 head more than a year ago. The CME lean hog index 9/22/2022: $0.42, $97.59.
TUESDAY'S CASH HOG CALL: Steady. It was interesting to see packers so aggressive in Monday's market while the futures complex had a mere meltdown. Given that packers chased cash hogs throughout Monday's trade it's likely an indication that they're somewhat short bought and could need to support the market again come Tuesday.
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