GENERAL COMMENTS:
Higher price levels through livestock trade helped to confirm end of week buyer support seen Friday. The potential for livestock futures to continue to move away from recent market lows and gain much needed momentum through the end of the month is helping to not only support price levels in each complex, but also draw additional volume back into the market. Spot month October live cattle contracts are the only contract posting losses, although this pressure is focused more on limited volume late in the contract life rather than market direction. Traders are also encouraged by the early week bounce in stock markets, although light to moderate softness in other outside markets is keeping traders from becoming overly bullish this early in the week. December corn is down 3/4 at $4.8 and December soybean meal is down $10.40 at $432. The Dow Jones Industrial Average is up 363.28 at 32,780.87.
LIVE CATTLE :
Live cattle futures have continued to move higher in all but spot month October contracts. The pressure in the lightly traded and soon to expire October contracts has continued to push prices lower during Monday morning, falling to $1.25 per cwt at midday. The rest of the complex is holding gains of $1 or greater with traders focusing on the strength across the complex and redevelopment of technical support late last week.
The market remains generally undersold, but to continue to record strong triple-digit gains day after day is expected to become a challenge without the help of fundamental firmness coming from gains in beef values and higher cash cattle trade during the week.
Cash cattle markets remain quiet as expected Monday morning with show list distribution and inventory taking the main focus Monday. Last week's trade was a mixed event with Northern trade trickling in through the week with trades seen every day of the week.
Southern business took advantage of the market rally, waiting until Thursday and Friday to develop. Cash prices in the North were generally $4 per cwt lower than the previous week, mostly $290 per cwt, while Southern trade at mostly $183 per cwt, steady with the previous week. The early support in futures trade and potential for strength in beef values could help to solidify higher asking prices. October live cattle are $1.25 lower at $182.75, December live cattle are $1.03 higher at $183.25, February live cattle are $1.38 higher at $184.325.
Boxed beef prices are higher: choice up $1.97 ($309.54) and select up $0.11 ($280.23) with a movement of 33.00 loads (10.55 loads of choice, 6.67 loads of select, 8.74 loads of trim and 7.41 loads of ground beef).
FEEDER CATTLE:
Triple-digit gains have redeveloped in feeder cattle futures Monday morning with traders focusing on defending last week's lows, and steadily but firmly moving back into the complex following the recent market tumble. November through March futures are holding triple-digit gains early in the week, although the rest of the complex remains supported, but with less buyer support and price gains able to move into the market. So far, nearby futures have rallied $3 per cwt off recent lows, but there will likely need to be more consistent buyer support through the end of October and early November to regain full confidence that buyers are not focusing on short-term market moves. November feeders are $1.50 higher at $238.4, January feeders are $1.65 higher at $237.35 and March feeders are $1.28 higher at $239.85.
LEAN HOGS:
Firm gains have also developed in lean hog futures trade Monday. The steady march higher in lean hog prices each day last week is not only helping to move contracts well off contract lows, but it is helping to steadily build confidence from a technical and fundamental standpoint, allowing traders to reenter the market who, over the past month, have been extremely hesitant to buy. Spot December contracts are currently $2 per cwt below October highs, which could act as a significant resistance point for further gains without strong fundamental support. News focusing on the recent price decline in the Chinese live hog prices may limit underlying softness in the weeks and months to head as exports could be further damaged by eroding prices and heavy supplies of China pork. Current live hog prices are reported at the lowest price since June, creating concern that additional weakness may further develop in the near future. December lean hogs are $1.35 higher at $71.825, February lean hogs are $1.38 higher at $74.875 and April lean hogs are $1.25 higher at $80.175.
Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 118.44 loads with 98.76 loads of pork cuts and 19.68 loads of trim. Pork cutout values are up $1.13 at $86.34.
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