DTN Closing Livestock Comments

GENERAL COMMENTS:

From Friday to Friday, livestock futures scored the following changes: Oct LC, up $0.35; Dec LC, off $0.70; Oct FC, off $0.40; Nov FC, up $0.17; Oct LH, up $6.03; Dec LH, off $0.37. Cash cattle trade is in the middle of a standoff that could last until late afternoon, early evening. A few additional bids have developed at $111 live and $175 dressed. But this is not enough to allow feeders to let go of cattle. Asking prices on live cattle remain at $113 to $114 and $178 dressed. According to the closing report, the national hog base is $0.40 higher compared with the prior day settlement ($58.50-$65.25) weighted average $63.63. Corn futures are higher in light activity. December futures were 3/4 cent higher. Dow Jones Index is 178 points lower with Nasdaq down 76 points.

LIVE CATTLE:

Live cattle futures ended the week mixed in a narrow trading range ($0.22 lower to $0.45 higher). Price moves in live cattle futures have remained moderate and in a narrow range through the week compared to the wide back-and-forth shifts in feeder cattle and lean hog futures. When the rest of the market rallied higher Friday, live cattle markets were narrowly mixed in nearby contracts. The most significant support developed in late 2019 contracts as traders focused more on market shifts in feeder cattle and outside markets than actual beef moves or potential short-term shifts. Nearby contracts were contained to moves of 22 cents lower to 17 cents higher. Limited activity is likely to be seen early next week also. Beef cut-outs: lower, $0.24 lower (select, $191.74) and down $0.61 (choice, $203.25) with good demand and light to moderate offerings 112 loads (62 loads of choice cuts, 19 loads of select cuts, 9 load of trimmings, 22 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:

Steady. Cash market activity expected to be at a typical early week standstill with showlist distribution and inventory taking the main orders of business. As more direction develops surrounding the amount of cattle sold through the end of this week, it will determine just how aggressive packers may be through the first half of next week.

FEEDER CATTLE:

Feeder cattle futures shifted higher in late-day trade following choppy mixed trade through most of the session ($0.12 lower to $0.80 higher). Buyer interest quickly moved into the complex early Friday morning, but this support was hard to maintain as prices shifted higher and lower through the trading session. Trade volume remained generally sluggish in most contracts. October posted the most aggressive market support, moving 80 cents higher at closing bell, which helped bring a sense of stability to the entire complex at the end of the week. CME cash feeder index for 10/4 is $158.18 up $0.37.

LEAN HOGS:

Strong support quickly moved back into the complex. This pushed most contracts to triple-digit gains during the Friday session ($0.70 to $2.22 higher). Traders in lean hog futures focused more on end-of-week short-covering and adjusting short-term positions, rather than trying to chart any long-term market shifts. December contracts led the complex higher with buyer interest flooding the market following previous pressure. This pushed prices $2.22 per cwt higher and sparked the potential of renewed buyer support early next week. Pork cuts slowly eroded lower, even though primals were mixed in a moderate range. Pork cutout values fell $0.35 per cwt, moving to $79.56 per cwt. CME cash lean index for 10/3 $69.15 up $0.31. DTN Projected lean index for 10/4 $69.31 up $0.16.

MONDAY'S CASH HOG CALL:

Steady. Even though packers will be moving into a new week, the cash market trend is expected to see little change Monday. Early bids are expected to be $1 lower to 50 cents per cwt higher, although most bids will remain steady Monday morning. Slaughter numbers are expected at 469,000 head Monday morning.

Rick Kment can be reached at rick.kment@dtn.com

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