DTN Midday Livestock Comments

Cattle Complex Mostly Higher Near Midday

(DTN photo by Russ Quinn)

GENERAL COMMENTS:

Activity in cattle feeding country is limited to the distribution of new showlists. The new offering appears to be generally smaller than last week with only Colorado showing more ready steers and heifers. Asking prices are poorly defined with feedlot managers waiting to see how early week futures and beef sales developing before putting their foot on base. According to the midday report, the Iowa hog base is $2.23 lower (on light volume) compared with the Prior Day settlement ($63.00-$71.50, weighted average $71.69). Corn futures are 1-2 cents lower near the top of the noon hour, pressured by good harvest weather and a general lack of supporting news. The stock market at midday is generally higher with the Dow positive by 40 points and the Nasdaq up 8.

LIVE CATTLE:

Live issues are mixed near midday with spot October up 75 points and the rest of the complex lower. October is supported by renewed cash strength and signs of early week strength in the whole market. Bull spreading also appear to be a popular feature. Beef cut-outs are significantly higher at midday, up $1.12 (select, $199.01) to $1.32 (choice, $204.32) with very light box movement (30 loads of choice cuts, 14 loads of select cuts, 9 loads of trimmings, 24 loads of coarse grinds).

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FEEDER CATTLE:

While lead October is holding close to unchanged at the time, the balance of the market reflects decent buying interest. Softness in the grain trade could be helping the firm undertone. Yet longer-term bullishness here hinges on the odds of further recover in live futures and feedlot sales. On an estimated run of 7,100 head (up from 6,850 last week but slightly below 7,411 counted in 2014), Oklahoma City has sold steers and heifers calves weighing under 500 pounds $8-10 higher in the early rounds.

LEAN HOGS:

Lean futures are mostly 30 to 62 points higher near the top of the noon hour. The market continues to be supported by evidence of decent pork demand, apparently more than strong enough to handle the seasonal increase in tonnage without lowering wholesale prices. Carcass value at midday is solidly higher with all primals making positive contributions. Pork cut-out: $89.39, up .81. CME cash lean 10/08: 74.84, up 0.09 (DTN Projected lean index for 10/09: 74.77, off 0.07).

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

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