Tuesday Morning Livestock Market Update - Mixed Activity Expected Tuesday

GENERAL COMMENTS:

Limited interest is still expected in cash cattle markets through the day Tuesday with packer interest quiet early in the day, but could slowly develop with a few starter bids. No significant market development is expected until midweek or after in cash cattle markets as feedlot managers are likely to keep asking prices elevated well into late week, although at this point, asking prices have not yet been established. There may be some additional focus on the direction of futures trade. Outside markets will play a larger role in the movement of live cattle trade, with the generally bullish trend continuing through the week, although the potential of a market correction could limit any upside market shifts Tuesday.

Cash hog values are expected to remain mostly higher with the majority of bids expected to be 50 cents higher. The full range of activity early Tuesday is expected to be $1 lower to $1 per cwt higher, as packers try to adjust with the recent market support over the last couple of weeks. This market shift higher is not sustainable, although the underlying tone in the market remains firm, likely limiting the downside of the market through most of October. Lean hog futures are expected to remain mostly higher, although even though there is a strong indication that follow-through buying will develop, the light volume may open the door for market positioning through the morning, allowing for mixed trade to potentially lead the market in a wide market price range.

	BULL SIDE		BEAR SIDE
1)	Firm buyer support in boxed beef values is helping to sustain additional fundamental support through the complex during early October.	1)	Cash cattle markets have shown limited support over the last couple of weeks, causing some to fear that the market may remain stuck in a narrow and sideways trading range during much of the fall.
2)	December live cattle futures broke through resistance levels Monday, creating the opportunity to spark some additional underlying support through the entire complex. This may allow for cattle trade to plan a more steady and focused shift higher, rather than the erratic triple-digit gains seen in hog futures.	2)	The inability to for live cattle futures to show anything other than limited market support Monday while nearly all other markets surged higher, is creating some larger market concerns about sustaining long-term buying interest through the entire complex.
3)	Triple-digit gains in each of the last two trading sessions has caused some major market shifts through the complex. This is opening an opportunity for additional strong buyer interest to move into both nearby and deferred contracts.	3)	Cash hog values slipped Monday afternoon, allowing for a turn from the recent widespread buyer support in the last couple of weeks. This could start to curb overall fundamental support through the entire complex.
4)	Firming pork values through the last week is expected to spark some additional focus on the ability to bring additional support to the complex early in the month of October.	4)	The wide price moves higher in the last two sessions is expected to create increased volatility through the lean hog market with a market correction likely to develop in the near future. This could allow for prices to yo-yo back and forth in the coming days, adding uncertainty to the entire market.

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Monday Closing Livestock Market Summary - Hog Futures Extend Sharp Gains

GENERAL COMMENTS:

Early week movement in the cash cattle complex remains undeveloped. There is growing uncertainty through the cash market that trade will be active before the last half of the week as bids and asking prices are not expected to be fully developed until midweek or later. According to the closing report, the national hog base is $0.05 lower compared with the Prior Day settlement ($58.50 to $64.00) weighted average $63.05. Corn futures are higher in light activity. December futures were 9 1/2 cent higher. Dow Jones Index is 191 points higher with Nasdaq down 9 points.

LIVE CATTLE:

Limited gains developed in live cattle futures early Monday with prices mixed within a narrow range. Late day buyer support pushed prices higher in all contracts at the closing bell ($0.10 to $0.67 higher). Narrow gains have slowly developed across the complex with October futures holding a 22 cent per cwt gain. This move has continued to spark additional underlying support with prices $113.67 per cwt, while December futures have set contract highs, despite the narrow 10 cent gain, as contracts settled at $118.95 per cwt. This may add some additional support to the complex through early October. Beef cut-outs: higher, $1.19 higher (select, $194.63) and up $1.20 (choice, $205.08) with light demand and offerings (33 loads of choice cuts, 22 loads of select cuts, 12 loads of trimmings, 27 loads of coarse grinds).

TUESDAY'S CASH CATTLE CALL:

Steady to $1 higher. Cash market activity will likely remain undeveloped Tuesday with traders focusing on the stability in cash markets last week and firm underlying tone of futures trade. Bids and asking prices are still hard to find, but should become more accessible over the next couple of days.

FEEDER CATTLE:

Firm gains developed Monday as traders entered the month of October ($0.47 to $1.52 higher). Strong triple-digit gains have quickly and aggressively moved into deferred futures trade. This has created consistent and uniform buying support through the complex with January through September contracts closing up $1.37 to $1.52 per cwt as market support through 2019 continues to focus on expected beef demand both domestic and global. There is likely to be some additional underlying support through the complex, which may support feeder cattle and live cattle prices in the coming days and weeks. CME cash feeder index for 9/28 is $157.48 down $0.41.

LEAN HOGS:

Strong triple-digit gains developed in nearby contracts. This helped add increased buyer support to the entire complex through early October ($0.20 to $2.57 higher). October lean hog futures led the lean hog complex higher Monday with gains of $2.57 per cwt. This pushed spot month contracts to $64.75 per cwt. This has moved spot month prices to the highest levels since June. The renewed buyer activity may continue to add underlying support to the entire lean hog complex. Pork cuts continues to firm during early October, with ham primals the only cutout product posing lower prices. Pork cutout values gained $0.97 per cwt, moving to $81.05 per cwt. CME cash lean index for 9/27 $66.45 up $1.11. DTN Projected lean index for 9/28 $67.26 up $0.81.

TUESDAY'S CASH HOG CALL:

50 cents lower to $1 higher. Limited support is expected to be seen early Tuesday morning with increased buyer activity developing through the week. Most bids are expected to be seen steady to 50 cents per cwt higher. Slaughter numbers are expected to be seen at 460,000 head Tuesday morning.

#completeherdhealth

Monday Midday Livestock Market Summary - Hog Futures Hold Triple-Digit Gains

GENERAL COMMENTS: 

Moderate to strong gains have quickly developed across the lean hog and feeder cattle complex Monday morning as continued spill over support moved through the market following last week's gains. Limited trade is seen in live cattle trade with the overall lack of support in October and December contracts seemingly pulling some traders back away from the market. Corn markets are higher in light trade. December corn futures are 9 cents higher. Stock markets are higher in light trade. The Dow Jones is 189 points higher while Nasdaq is up 12 points.

LIVE CATTLE:

Light to moderate buyer support is still seen through the live cattle complex. Nearby contracts are showing limited movement with prices seen 5 to 12 cents per cwt higher in the October and December contracts. The rest of the complex is showing some slightly more aggressive market support with prices 30 to 50 cents per cwt higher in limited trade. Cash cattle markets remain undeveloped early in the week with bids and asking prices unlikely to be seen until midweek or later. The development of cash trade last week steady to weak compared to the previous week may limit early support despite the moves higher in futures trade. Boxed Beef cut-outs at midday are unreported at this time.

FEEDER CATTLE:

Feeder cattle have pushed higher in most contracts Monday morning with front month October futures the only contract holding a 10 cent loss. The rest of the market remains firmly higher with gains of 52 to 87 cents per cwt higher as traders continue to test short-term resistance levels during early October trade. Spring and summer 2019 contracts have broken through short-term highs, with most of these contracts extending contract highs through the first trading session of October. November futures still remain approximately 50 cents under long term resistance levels, but a break above these levels over the next couple of days could quickly spark some underlying buyer support through the entire market.

LEAN HOGS:

Strong follow-through buying support has quickly moved back into the lean hog complex as commercial traders have quickly moved into the market during the first trading session of October. The continued support that spilled over from late last week seems to be sparking not only commercial buyer support, but also is helping to instill some confidence in noncommercial traders. December futures are leading the market higher with a $2 per cwt rally, moving to $59.92 per cwt, in active trade. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is $0.05 lower at $63.05 per cwt with the range from $60.00 to $63.50 on 4,769 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 179 loads selling on the morning report. Pork carcass values are unreported at this time. Lean hog index for 9/27 is at $66.45 up 0.81 with a projected two-day index of 67.26, up 0.81.

#completecalfcare

Monday Morning Livestock Market Summary - Early-Month Support Expected

GENERAL COMMENTS:

Cash-cattle activity is expected to remain limited with packers and feeders moving back to the normal Monday routine. It is expected to be even more limited given that we are in a fresh month and quarter, with little cash market direction likely until the middle to end of the week. Some additional longer-term support could redevelop as the firm futures gains late last week has created the expectation that additional buyer interest may develop through the coming days and weeks.

Cash hog prices continue to firm, but are deviating from the wider market shifts in the last three weeks. Prices are generally expected to be $1 per cwt higher as packers continue to look for market ready hogs in order to fill their growing market procurement appetite. This is expected to push most bids $1 per cwt higher with an estimated 470,000 head moving through plants Monday. Futures trade is expected to remain generally firm following the triple-digit gains at the end of last month. But the aggressive triple-digit gains will also likely bring about some desire to cover positions, leading to the potential for mixed trade late in the morning.

	BULL SIDE		BEAR SIDE
1)	Strong underlying futures market support in nearby live cattle futures has sparked additional commercial buyer interest. December futures have rallied to the highest level in nearly a year, at $118.85 per cwt.	1)	Despite the strong gains across live cattle and feeder cattle support in the recent days, cash cattle markets seem to be stuck in a narrow sideways trading range through the end of September, creating concerns of longer-term fundamental support.
2)	The potential to spark additional buyer support during early October is creating the ability to set contract highs in several nearby live cattle contracts. This could stimulate additional buyer support over the near future.	2)	Despite the moderate buyer support in cattle markets, the feeder cattle futures still remain stuck in a narrow-to-moderate range under the glass ceiling set in early September. With resistance levels seen at $159 per cwt in nearby contracts, it has been a challenge for traders to come close to breaking through these levels.
3)	Sharp triple-digit gains have continued to move through lean hog trade. This is rekindling the potential to break through short-term resistance in all nearby contract months.	3)	Sharp end-of-the-month gains in lean hog futures is expected to add some additional volatility to the lean hog complex over the next few weeks. With traders becoming more comfortable creating a wider range at these price levels, market prices have the potential to swing higher and longer through early October.
4)	Continued strong buyer support in cash hog trade has helped to bring about even more trade activity. This may help to push cash prices even higher during early October.	4)	Despite strong procurement levels and the desire to move product into cold storage, there is concern about building increased demand markets for pork and pork products through the upcoming months. This may limit long-term support if overall production levels continue to show growth.

#completeherdhealth