DTN Midday Livestock Comments 10/06 11:37
Exports Send Hogs Higher and Cattle Mostly Lower
Southern cattle are trading for $144, which is $1.00 higher than last week's
DTN Livestock Analyst
Thursday morning's export report was extremely friendly to the hog market,
but it came as a bitter report to beef sales. The cash cattle market's ability
to trade cattle higher this week is helping lessen the pain of the morning's
report. December corn is down 11 1/2 cents per bushel and December soybean meal
is down $5.40. The Dow Jones Industrial Average is down 175.25 points.
The live cattle market is trading mixed as the market saw a measly export
report but is seeing strong trade develop throughout the cash market. So far,
1,700 head have traded in Kansas and 900 head have traded in Texas, both for
$144 live, which is $1.00 higher than last week's weighted average. There
should be more cattle that trade Thursday afternoon, but feedlots seem pretty
firm in their asking prices of $145 in the South and $233 plus in the North.
The nearby live cattle contracts are trading slightly higher into the day's
afternoon, but the deferred contracts are trending mildly lower as the market
yearns for more support. October live cattle are up $0.52 at $145.20, December
live cattle are up $0.05 at $147.97 and February live cattle are down $0.15 at
Beef net sales of 16,400 mt for 2022 were primarily for South Korea (6,000
mt) Japan (2,200 mt) and Mexico (2,200 mt).
Boxed beef prices are mixed: choice up $0.58 ($247.64) and select down $0.47
($218.75) with a movement of 99 loads (58.31 loads of choice, 22.85 loads of
select, zero loads of trim and 18.08 loads of ground beef).
A betting person would bet that, with corn trending $0.10 to $0.11 lower
heading into Thursday's afternoon, feeders would be trending higher, but
without seeing the support they need, traders are sheepishly trading the feeder
cattle contracts and letting most of the month's trend lower into the
afternoon. October feeders are down $0.70 at $175.85, November feeders are down
$0.80 at $176.52 and January feeders are down $0.17 at $177.90. You'd think
that the market would look at the morning's developments in the cash cattle
market as somewhat of a supportive achievement, but apparently traders aren't
agreeing with that logic.
With the day's export report sharing a monstrous movement of 34,300 metric
tons, how couldn't the lean hog complex be celebrating? Right from Thursday's
get-go, the complex gapped higher as the market is feeling more confident
thanks to the strong fundamental support it's received (i.e. strong export
sales, relatively strong domestic sales, and good prices and good movement
throughout the cash market). December lean hogs are up $1.07 at $77.57,
February lean hogs are up $1.32 at $80.20 and April lean hogs are up $0.90 at
$85.42. The cash market will likely close lower as the market has already see
robust interest from packers earlier in the week, so traders are going to be
eye the performance in cutout values all that much more.
Pork net sales of 34,300 mt for 2022 were primarily for Mexico (16,800 mt),
China (10,100 mt) and Canada (1,900 mt).
The projected lean hog index is delayed from the source. Hog prices are
lower on the Daily Direct Morning Hog Report, down $0.60 with a weighted
average of $89.32, ranging from $84.00 to $98.00 on 6,587 head and a five-day
rolling average of $87.54. Pork cutouts total 134.84 loads with 100.99 loads of
pork cuts and 33.86 loads of trim. Pork cutout values: up $2.46, $101.75.
ShayLe Stewart can be reached firstname.lastname@example.org
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