DTN Midday Livestock Comments 10/03 11:37
Spike in Job Openings Sends Livestock Complex Tumbling
With all three of the livestock markets trading lower into Tuesday's noon
hour, it's likely that weaker tones dominate the market throughout Tuesday.
DTN Livestock Analyst
The job openings report has had a bearish effect on the livestock complex
Tuesday as the news will likely ensure an increase in interest rates at the end
of the month. The cattle complex is taking the news the hardest, but the lean
hog market is trading mostly lower as well. December corn is down 2 1/4 cents
per bushel and December soybean meal is down $3.10. The Dow Jones Industrial
Average is down 381.87 points.
The live cattle complex isn't able to minimize the pressure looming over the
entire futures complex thanks to the hike in job openings in the U.S. The
entire complex is trading lower and it's likely that this bearish attitude
sticks with the market through the day's end and potentially even through the
upcoming trading days. October live cattle are down $1.62 at $182.80, December
live cattle are down $2.07 at $186.27 and February live cattle are down $2.17
at $191.00. The cash cattle market hasn't seen any interest arise and with the
bearish energy whirling throughout the market, packers will likely remain
patient and wait to offer bids until later in the week as they hope this will
pressure feedlots into selling more easily.
Boxed beef prices are lower: choice down $0.46 ($302.62) and select down
$0.23 ($276.75) with a movement of 54 loads (20.94 loads of choice, 18.66 loads
of select, zero loads of trim and 14.19 loads of ground beef).
If you have a weak stomach, I don't recommend checking in on the feeder
cattle complex Tuesday. The market is seeing $4.00 to $5.00 losses across its
market as traders bear down after seeing a spike in U.S. job openings. This
news won't likely sit well with the Federal Reserve and most likely ensures an
interest rate increase, which is where the feeder cattle market's queasiness
comes into play as buyers are expected to be buying more calves this month as
the fall run is officially underway. October feeders are down $4.70 at $248.62,
November feeders are down $4.87 at $250.82 and January feeders are down $4.52
Out of all the livestock contracts, the lean hog market is weathering the
news of more job openings being available than any of the other markets. This
could partly be because Monday was especially tough on the complex as the
market gapped lower and continues to dig deeper as the market looks to
establish a new bottom for its trading range. Either way, with the market
enduring immense technical pressure, it would be ideal if fundamental support
came in to encourage the market, but at this point cash prices have been lousy
this week and pork cutouts have been mixed. October lean hogs are up $0.35 at
$80.20, December lean hogs are down $0.77 at $68.75 and February lean hogs are
down $1.62 at $72.30.
The projected lean hog index for Oct. 2 is down $0.29 at $84.55, and the
actual index for Sept. 29 is down $0.74 at $84.84. Hog prices are lower on the
Daily Direct Morning Hog Report, down $1.74 with a weighted average price of
$70.63, ranging from $67.00 to $74.00 on 2,415 head and a five-day rolling
average of $74.78. Pork cutouts total 187.44 loads with 155.27 loads of pork
cuts and 32.17 loads of trim. Pork cutout values: up $0.56, $96.60.
ShayLe Stewart can be reached email@example.com
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