DTN Midday Livestock Comments 09/28 11:45
Livestock Contracts Continue to Bleed Lower
Wednesday hasn't shown the livestock complex any grace as the entire
marketplace continues to trade lower.
DTN Livestock Analyst
Yet again, we see another day where the livestock complex plummets lower as
outside pressures of the market's economy continued to consume the largest
portion of the market's focus. December corn is up 1 3/4 cents per bushel and
December soybean meal is down $2.10. The Dow Jones Industrial Average is up
The cash cattle market hasn't seen any business renewed at this point, and
aside from the few head that traded Tuesday afternoon for steady prices,
largely the market remains undeveloped. If the cash cattle market can
successfully keep prices steady, then that bodes well for entire cattle complex
as it shows that strength remains in some of the market's fundamentals. But
given that packers have paid the market little to no attention Wednesday,
feedlots are going to have their work cutout for them this week as packers will
use the market's weakness as a bargaining tool. October live cattle are down
$0.50 at $143.07, December live cattle are down $0.70 at $146.20 and February
live cattle are down $0.55 at $150.30.
The Fed Cattle Exchange Auction held Wednesday reported seven lots (six lots
in Texas and one lot in Kansas), totaling 1,077 head of cattle, none of which
sold. Opening prices were at $141, high bids had a range of $141 to $143, but
none of these bids met reserve prices of $143 to $144.
Boxed beef prices are mixed: choice up $0.40 ($248.83) and select down $1.29
($219.92) with a movement of 113 loads (69.20 loads of choice, 20.89 loads of
select, 12.90 loads of trim and 10.34 loads of ground beef).
With the live cattle market aiding no support to the feeder cattle complex
and corn trading just slightly above steady prices, the feeder cattle complex
is again trending lower into Wednesday's afternoon. October feeders are down
$1.25 at $174.87, November feeders are down $1.07 at $175.20 and January
feeders are down $0.75 at $176.05. As September looks at its final trading days
of the month, cow-calf producers who have yet to sell their calves are
scratching their heads, wondering when this pressure will ease and how much
more it's going to cost the market in the meantime.
The entire livestock complex has taken a beating this week, but the lean hog
complex's chart is ugly -- very ugly. Day after day, the market carves out a
new low for the move, which is equivalent to the lowest prices the market has
seen since in the last nine months. Questions about demand continue to hang
over both the cattle and hog markets, but especially in the hog market as China
has attempted to cheapen their own pork prices by releasing reserves three
times this month. Nevertheless, both packers and producers are praying that
export demand shows something positive come Thursday, and both continue to
anxiously monitor domestic prices as support is dearly needed. October lean
hogs are up $0.05 at $88.75, December lean hogs are down $0.52 at $75.72 and
February lean hogs are down $1.02 at $79.32.
The projected lean hog index for Sept. 27 down $0.81 at $95.60, and the
actual index for Sept. 26 is down $0.58 at $96.41. Hog prices are lower on the
Daily Direct Morning Hog Report, down $1.26 with a weighted average of $89.25,
ranging from $82.00 to $102.00 on 4,303 head and a five-day rolling average of
$90.59. Pork cutouts total 152.45 loads with 132.56 loads of pork cuts and
19.89 loads of trim. Pork cutout values: up $0.89, $99.90.
ShayLe Stewart can be reached email@example.com
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