DTN Midday Livestock Comments 09/30 11:42
Hogs Trend Higher After Absorbing Quarterly Report
Heading into Friday afternoon, cattlemen are hoping the corn complex doesn't
run much higher ahead of closing.
DTN Livestock Analyst
It's been a mixed Friday for the market as both live and feeder cattle
contracts are trending lower after closing higher Thursday. But the lean hog
complex is doing the exact opposite as it found enough support in Thursday's
market to keep morale elevated through Friday. Not helping matters in terms of
the cattle market's weakness Friday is the sheer fact that corn is trading 11
to 13 cents higher, which is a sizeable jump for the day. December corn is up
11 1/2 cents per bushel and December soybean meal is down $3.10. The Dow Jones
Industrial Average is down 162.71 points.
The live cattle complex is trading modestly lower into Friday afternoon as
the market looks for support after pushing higher through Thursday's close.
October live cattle are down $0.45 at $143.67, December live cattle are down
$0.87 at $146.90, and February live cattle are down $0.72 at $150.62. The cash
cattle market hasn't seen any more interest develop and it's likely the week's
trade is all but done with. Throughout the week, Northern dressed sales have
had a range of $225.60 to $233, mostly $228, which is $1.00 lower than last
week's weighted average. Southern live cattle have been marked at $143, which
is fully steady with last week's weighted averages. As mentioned earlier this
week, monitoring not only boxed beef prices is critical in this time but also
the sheer volume of sales as packers can balance lower prices with larger sales
so long as the opportunity lasts. However, if demand wanes and both prices and
sale volumes crater, packers could look to rein back production.
Boxed beef prices are mixed: choice down $1.26 ($244.82) and select up $0.86
($220.64) with a movement of 47 loads (30.63 loads of choice, 10.13 loads of
select, zero loads of trim and 6.39 loads of ground beef).
With the corn complex gaining more and more steam as the day plays on, the
feeder cattle market is taking a step back as nearby corn contracts trade 11 to
13 cents higher. Thankfully, at this point the market has support at the plane
established earlier this week, which will be critical for the market to
maintain if higher prices are to be in the feeder cattle markets in the near
future. October feeder cattle are down $1.87 at $175.45, November feeders are
down $2.40 at $175.42 and January feeders are down $1.95 at $176.47.
As the lean hog complex now has had time to thoroughly examine the Quarterly
Hogs and Pigs Report, which was released Thursday afternoon, the market has
traded higher all Friday. October lean hogs are up $0.22 at $89.67, December
lean hogs are up $0.50 at $76.25, and February lean hogs are up $0.15 at
$79.20. Pork cutout values closed lower Thursday afternoon, which largely
stemmed from the regression in belly prices. Monitoring pork cutout values and
demand Friday afternoon will be important for the market as packers could opt
to scale back production if demand isn't as lively as they'd like.
The projected CME Lean Hog Index for 9/29/2022 is down $0.23 at $94.91, and
the actual index for 9/28/2022 is down $0.46 at $95.14. Hog prices are lower on
the Daily Direct Morning Hog Report, down $3.36 with a weighted average of
$85.08, ranging from $82.00 to $95.50 on 2,966 head and a five-day rolling
average of $89.29. Pork cutouts total 158.43 loads with 134.97 loads of pork
cuts and 23.46 loads of trim. Pork cutout values: down $1.31, $97.49.
ShayLe Stewart can be reached email@example.com
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