GENERAL COMMENTS:
The livestock complex continues to trade mixed into Monday's afternoon as the cattle contracts are celebrating the fact that the government was able to avoid a shutdown, while the lean hog market continues to struggle with fundamental support and the mixed messaging that came from last week's Quarterly report. December corn is up 9 cents per bushel and December soybean meal is down $7.30. The Dow Jones Industrial Average is down 207.35 points.
LIVE CATTLE:
The live cattle contracts are back to trading higher as traders sigh a breath of relief that the government was able to avoid a shutdown. But, even with the contracts now pushing for higher prices, there's a lot at stake for this week's market in regard to fundamentals. Last week, packers were able to not only keep cash cattle prices from advancing, but they also cut last week's slaughter to a mere 612,000 head. Feedlots need to maintain currentness, all while battling to keep cash cattle prices as strong as possible. It's a balancing walk to manage and it will be interesting to see how feedlots manage that task this week. October live cattle are up $1.07 at $185.27, December live cattle are up $1.20 at $189.12 and February live cattle are up $1.42 at $193.92.
Last week, Northern dressed cattle sold for $288 to $293, but mostly at $290 to $291, which is $1.00 to $2.00 lower than the previous week's weighted average. Southern live cattle traded at $182 to $183, but mostly at $183, which is fully steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 73,514 head. Of that 80% (58,802 head) were committed to the nearby delivery while the remaining 20% (14,712 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $2.15 ($302.93) and select up $2.87 ($278.91) with a movement of 42 loads (20.92 loads of choice, 14.27 loads of select, zero loads of trim and 7.08 loads of ground beef).
FEEDER CATTLE:
Even though corn prices are sporting a moderate $0.10 rally into Monday's noon hour, the feeder cattle contracts don't seem affected at this point as traders are just relieved to see that the government shutdown was avoided, and the live cattle complex is lending support as well with its higher tone. October feeders are up $1.05 at $253.52, November feeders are up $1.75 at $256.65 and January feeders are up $2.25 at $260.30. It will be especially interesting to see how feeder cattle sales fare this week as the fall runs are getting bigger in size.
LEAN HOGS:
The less than supportive news in last week's Quarterly Hogs and Pigs report mixed with the lackadaisical support from the market's fundamentals isn't allowing for the lean hog market to do anything but trade lower. October lean hogs are down $0.35 at $79.85, December lean hogs are down $2.20 at $69.57 and February lean hogs are down $1.45 at $74.00. The spot December contract gapped lower this morning and is seeming to be looking for a new bottom in the market's current trading range as pressure continues to mound.
The projected lean hog index for Sept. 29 is down $0.74 at $84.84, and the actual index for Sept. 28 is down $0.56 at $85.58. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.98 with a weighted average price of $72.37, ranging from $69.00 to $75.00 on 158 head and a five-day rolling average of $76.11. Pork cutouts total 134.40 loads with 119.89 loads of pork cuts and 14.50 loads of trim. Pork cutout values: down $0.10, $97.13.
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