DTN Midday Livestock Comments 10/05 11:38
Stronger Tones Lead Livestock Higher Into Afternoon
The cash cattle market remains quiet as packers are trying to avoid paying
more for cattle, but feedlots seem quite determined to move the market at least
DTN Livestock Analyst
The livestock complex is heading into Wednesday's afternoon fully higher as
the market welcomes traders' interest and hopes that follow-through fundamental
support reaches the markets Wednesday afternoon. After closing sharply lower
Tuesday afternoon, the lean hog complex is back to rallying in a hasty way as
traders seem quick to want to recover lost position. December corn is up 3
cents per bushel and December soybean meal is steady. The Dow Jones Industrial
Average is down 172.16 points.
The live cattle market hasn't seen much business shake through its market
has of yet as traders are mildly supporting the contracts, seeming to wait to
see how the cash cattle market trades. Feedlots know that packers are hungry
for cattle and have thus held strong in waiting the week out for potentially
higher prices. A lone bid of $234 stands in Nebraska, but at this point,
feedlots are passing it by. Asking prices are noted in the South at $145 but
are still not established in the North. October live cattle are up $0.82 at
$145.02, December live cattle are up $0.67 at $148.17 and February live cattle
are up $0.70 at $151.95.
The Fed Cattle Exchange Auction held Wednesday reported 8 lots (6 lots in
Texas and 1 lot each in Nebraska and Kansas), totaling 1,557 head of cattle.
Opening prices were at $141 to $142, high bids had a range of $141.50 to
$144.25, reserve prices were $143 to $145. Only 1 lot sold, 201 head in
Nebraska at $144.25.
Boxed beef prices are lower: choice down $0.54 ($247.50) and select down
$1.84 ($220.07) with a movement of 108 loads (72.61 loads of choice, 19.09
loads of select, 7.22 loads of trim and 9.14 loads of ground beef).
Feeder cattle are aiming to close higher and even with the corn complex
pushing $0.03 to $0.04 rally heading into noon hour, the market seems confident
in its upward quest. October feeders are up $1.55 at $176.25, November feeders
are up $1.72 at $176.92 and January feeders are up $1.35 at $177.42. It's
helping that the live cattle market is trading higher too, but the biggest
supportive gesture is stemming from the likelihood that feedlots will see
higher prices again this week. If the cash cattle market does indeed trade
higher and corn doesn't pose much more of treat, then a stronger close isn't
out of the picture for the feeder cattle market.
The lean hog market has posted a stronger trade after the market was
blindsided by traders Tuesday afternoon and closed sharply lower. The
trajectory of the market remains shaky as, on one hand, hogs possess some
opportunity to trade higher given that the market is far from any resistance
pressure and the sheer volume of hogs needed to be marketed its overbearing.
But, at the same time, with demand being questionable both domestically and
internationally, packers are quick to react to protect their margins, which
adds a shakable level of uncertainty and volatility to the complex. December
lean hogs are up $2.12 at $76.55, February lean hogs are up $1.52 at $78.80 and
April lean hogs are up $1.15 at $84.45.
The projected lean hog index is delayed from the source. Hog prices are
higher on the Daily Direct Morning Hog Report, up $4.11 with a weighted average
of $89.92, ranging from $83.00 to $98.00 on 7,852 head and a five-day rolling
average of $87.20. Pork cutouts total 176.61 loads with 150.70 loads of pork
cuts and 25.91 loads of trim. Pork cutout values: up $2.45, $100.74.
ShayLe Stewart can be reached email@example.com
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