GENERAL COMMENTS:
The livestock complex started the week out on a strong note as all three of the markets closed mostly higher Monday afternoon. Again this week demand will play a key role in the market's direction as traders are looking for fundamental support in order to justify trading the contracts any higher as they're up against resistance pressure. December corn is up 1 1/4 cents per bushel and December soybean meal is down $6.50. The Dow Jones Industrial Average is down 398.51 points.
LIVE CATTLE:
The live cattle complex traded higher throughout most of Monday's trade but upon seeing midday boxed beef prices higher, traders even began to support the nearby contracts which allowed the entire complex to close higher. It will be an interesting week for the live cattle market as traders have advanced the nearby contracts to their highest price point since the equity market meltdown in early August, and the cash cattle market has been able to trade higher for the last four weeks in a row. But now with the market up against resistance levels, everyone is wondering if the complex will be able to maintain its upward trend throughout the week. Thankfully boxed beef prices are up sharply, which should encourage feedlot managers to again price their showlists higher, and hopefully it will encourage packers that demand is strengthening. But it's highly unlikely that any cash cattle trade will develop ahead of Wednesday as undoubtedly packers and feedlots managers will go toe-to-toe again this week. October live cattle closed $0.47 higher at $187.47, December live cattle closed $0.02 higher at $187.02 and February live cattle closed $0.35 higher at $188.30. Monday's slaughter is estimated at 110,000 head -- 9,000 head less than a week ago and 13,000 head less than a year ago. New showlists appear to be somewhat higher in Nebraska/Colorado and Texas, and higher in Kansas.
Last week Southern live cattle traded for $186 which is $1.00 higher than the previous week's weighted average, and Northern dressed cattle traded at $296 which is $2.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 59,356 head. Of that, 82% (48,748 head) were committed to the nearby delivery, while the remaining 18% (10,608 head) were committed to the deferred delivery option.
Boxed beef prices closed higher: choice up $3.35 ($305.93) and select up $1.72 ($289.33) with a movement of 106 loads (52.90 loads of choice, 25.84 loads of select, 10.93 loads of trim and 15.88 loads of ground beef).
TUESDAY'S CATTLE CALL: $1.00 to $2.00 higher. I know that packers are going to cut throughput this week, but feedlot managers are in a position in which if they don't like the prices they're being offered they can simply hold onto their inventory and roll this week's showlist to the next week if prices are strong enough.
FEEDER CATTLE:
Even though the live cattle complex rounded out the day fully higher, the feeder cattle market's nearby contracts remained reluctant to trading higher, but the deferred months rallied with ease. October feeders closed $0.77 lower at $248.85, November feeders closed $0.12 lower at $249.15 and January feeders closed $1.80 higher at $246.17. Part of the reason why the nearby feeder cattle contracts closed slightly lower was due to the fact that traders weren't willing to take out the market's resistance at its 100-day moving average. If demand in the countryside remains incredibly strong for feeders this week and the live cattle/fed cash cattle market lends ample support -- then trades may take on that threshold later this week, but doing so on Monday seemed too ambitious to traders. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers weighing under 500 pounds sold $10.00 to $30.00 higher, feeder heifers over 500 pounds sold $2.00 to $8.00 higher. Feeder heifers under 550 pounds sold $5.00 to $25.00 higher with the heavier weights trading $5.00 lower. Feeder cattle supply over 600 pounds was 74%. The CME feeder cattle index 10/4/2024: up $0.70, $247.48.
LEAN HOGS:
The lean hog complex traded higher throughout Monday's market as traders were pleased to see pork cutout values well supported throughout Monday's trade. The only two cuts that closed slightly lower were the rib (down $0.54) and the ham (down $0.55) but otherwise the rest of the cuts closed higher. Demand will continue to remain a top priority for traders if they're going to be able to continue with the market's upward trend. December lean hogs closed $0.67 higher at $76.82, February lean hogs closed $0.77 higher at $80.60 and April lean hogs closed $0.72 higher at $84.87. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.79 with a weighted average price of $76.68 on 1,321 head. Pork cutouts total 338.08 loads with 268.15 loads of pork cuts and 69.94 loads of trim. Pork cutout values: up $1.74, $96.05. Monday's slaughter is estimated at 488,000 head -- 3,000 head more than a week ago and 7,000 head more than a year ago. The CME lean hog index for 10/3/2024: down $0.07, $84.83.
TUESDAY'S HOG CALL: Higher. With Monday's cash market hardly tested and pork cutout values closing higher Monday afternoon, it's likely that packers are more aggressive on Tuesday in the cash hog market.
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