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DTN Midday Livestock Comments          10/03 11:32

   Boxed Beef Prices Print Higher at Midday

   It was a pleasant surprise to see the livestock complex trade higher at 
Monday's dawn, but it was even more supportive to see that boxed beef prices 
are higher at midday.

ShayLe Stewart
DTN Livestock Analyst


   The livestock complex is off to a strong start for the week as the three 
markets (live cattle, feeder cattle, and lean hogs) all see higher prices, and 
even though the week is young, meat demand is off to a stronger start too. 
December corn is down 1 1/4 cents per bushel and December soybean meal is down 
$1.90. The Dow Jones Industrial Average is up 595.64 points.


   The live cattle market is off to a strong start as the market not only sees 
moderate support technically, but the market was also surprised to see midday 
boxed beef prices print higher. October live cattle are up $1.35 at $144.62, 
December live cattle are up $0.82 at $147.85 and February live cattle are up 
$0.92 at $151.57. Given that the market appears to have found a bottom last 
week, higher trade isn't out of the question so long as traders stay engaged 
and the market isn't cut short with any worse news about our economy. The cash 
cattle market is expected to trade at least steady this week, if not a little 
higher ever given that showlists are current and that packers are continuing to 
want to buy week in and week out to avoid becoming short bought when supplies 
becoming inherently thinner. Showlists appear to be lighter in all feeding 

   Last 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. Last week's negotiated cash cattle traded totaled 100,258 
head. Of that, 71% (71,469 head) were committed for the nearby delivery while 
the remaining 28% (28,789 head) were committed for the deferred delivery.

   Boxed beef prices are higher: choice up $1.38 ($245.13) and select up $1.70 
($221.83) with a movement of 54 loads (31.58 loads of choice, 7.57 loads of 
select, 6.94 loads of trim and 8.00 loads of ground beef). The choice/select 
spread sits at $23.30.


   With the corn complex trending mostly steady and the live cattle market 
lending feeders support, the feeder cattle contracts are trading modestly 
higher into Monday's afternoon. October feeders are up $0.85 at $175.02, 
November feeders are up $0.75 at $175.37 and January feeders are up $0.82 at 
$176.50. The market appears to have developed a new support plane around 
$174.50 in the November contract and with no nearby concerns of resistance, the 
market has all the potential in the world to trade higher. Higher corn prices 
and any more deterioration in on our economy will likely weaken feeder cattle 
prices, but stronger fat cattle trade and a higher tone in the live cattle 
contracts will add support.


   The lean hog complex is running into Monday's afternoon fully higher as the 
market believes that a support plane was established in last week's market. 
Last week the market was fanned higher on Friday thanks to supportive Quarterly 
Hogs and Pigs report and strong export report than came throughout Thursday's 
trade. The market's biggest concern moving forward will continue to be demand, 
which packers are hoping will come from both domestic and foreign markets. Late 
last week slaughter speeds dipped slightly, which will also be a factor that 
needs to continue to be monitored. October lean hogs are up $0.52 at $89.75, 
December lean hogs are up $1.65 at $77.87 and February lean hogs are up $0.82 
at $80.25.

   The projected lean hog index for Sept. 30 is down $0.58 at $94.33, and the 
actual index for Sept. 29 is down $0.23 at $94.91. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $2.41 with a weighted average of $82.67, 
ranging from $79.00 to $97.50 on 3,150 head and a five-day rolling average of 
$88.12. Pork cutouts total 163.57 loads with 136.09 loads of pork cuts and 
27.48 loads of trim. Pork cutout values: up $5.39, $102.98.

   ShayLe Stewart can be reached

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