GENERAL COMMENTS:
The livestock complex is off to a mixed start as the live cattle market trades higher, but the lean hog and feeder cattle market are being pushed lower. If the live cattle market can continue to trade higher into the middle of the week and see stronger cash cattle prices, that may be enough support to push the feeder cattle market into trading higher as well. December corn is down 3 1/2 cents per bushel and December soybean meal is up $5.40. The Dow Jones Industrial Average is up 134.43 points.
LIVE CATTLE:
The live cattle complex is off to a strong start as the market is rallying off Friday's stronger close, but it's going to need fundamental support to keep this momentum. October live cattle are up $0.15 at $145.82, December live cattle are up $0.37 at $151.35 and February live cattle are up $0.15 at $155.50. The cash cattle market is expected to see better interest this week as packers have shown lukewarm interest in the cash market over the last three weeks. But to continue to run processing speeds as aggressively as they are, packers are going to need more cattle and they're likely going to have to chase after the cash market more aggressively this week.
Last week Southern live cattle traded for mostly $141, which was steady with the previous week's weighted average, and Northern dressed cattle traded from $225 to $231 but mostly at $226, which was $2.50 lower than the previous week's weighted average in Nebraska. Last week's negotiated cash cattle trade totaled 82,382 head. Of that 72% (59,585 head) were committed for the nearby delivery, while the remaining 28% (22,797 head) were committed for the deferred delivery.
Monday's WASDE report once again shared supportive news to the cattle market. Beef production for 2022 was raised by 16 million pounds as slaughter speeds continue to run relentlessly. The third quarter of 2022 actually saw a 25-million-pound dip in production from last month's report as carcass weights are waning, but the third quarter's draw back was more than offset by the 40-million-pound addition to the fourth quarter. Beef production for 2023 was raised by 70 million pounds, with the first quarter of 2023 being raised by 150 million pounds from August's WASDE report, while the second quarter of 2023 remained unchanged. Steer prices are expected to average $143.00 (up $3.00 from last month) for the third quarter in 2022, and fourth quarter prices are unchanged at $147.00. 2022 beef imports fell by 45 million pounds, and beef exports for 2022 held steady. 2023 beef imports and exports were unchanged from August's report.
Boxed beef prices are mixed: choice up $2.12 ($259.38) and select down $0.74 ($233.99) with a movement of 49 loads (19.39 loads of choice, 9.92 loads of select, 12.86 loads of trim and 7.08 loads of ground beef).
FEEDER CATTLE:
The feeder cattle market started the day out higher as the corn complex was trading fully lower, but with the soon-to-expire September 2022 corn contract trending $0.11 higher, the feeder cattle market has been rocked back on its heels. There's hope feedlots will be able to get at least steady money this week if not even push the market $1.00 or $2.00 higher, but until cash cattle begin to trade the feeder cattle market could be timid as it looks for support. Sale barns have been reporting larger runs as it's evident some cattlemen are shipping their calves early. Given that this is the first full week of trade since the long Labor Day weekend, demand could be stronger in sales this week. September feeders are down $0.40 at $182.60, October feeders are down $0.47 at $185.10 and November feeders are down $0.42 at $186.40.
LEAN HOGS:
The lean hog complex is keeping with its downward move to start the week off. October lean hogs are down $1.20 at $91.97, December lean hogs are down $0.17 at $82.95, and February lean hogs are down $0.10 at $87.32. Packer margins improved last week but again they'll be looking for strong consumer demand in order to justify supporting the cash market whatsoever. It's unlikely that packers show much interest in the market until Tuesday or Wednesday, and even at that point the market will still likely be thinly traded as packers are sorely trying to recoup some margin.
The projected CME Lean Hog Index for 9/9/2022 is down $1.28 at $98.29, and the actual index for 9/8/2022 is down $0.69 at $99.57. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.00 with a weighted average price of $88.59, ranging from $87.00 to $99.00 on 3,359 head and a five-day rolling average of $94.16. Pork cutouts total 174.32 loads with 153.79 loads of pork cuts and 20.52 loads of trim. Pork cutout values: up $3.83, $106.70.
Monday's WASDE report shared mixed news for the hog complex. Pork production for 2022 gained 55 million pounds from last month's report as pork production in the third quarter is anticipated to be better than originally expected. Disappointing but expected news was shared about quarterly price projections as obviously pressures in the current market have dropped third quarter prices by $6.00 from August's WASDE report, and four quarter prices in 2022 are expected to average $65.00 which is down $4.00 from a month ago. 2023 quarterly price projections are unchanged from a month ago. 2022 pork imports fell by 50 million pounds, but pork exports also fell by 80 million pounds. 2023 pork imports fell by 100 million pounds and exports remained unchanged.
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