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DTN Midday Livestock Comments          09/26 11:49

   Outside Pressures Send Livestock Lower 

   With both interest rates and inflation running wildly, the livestock complex 
is trading lower into Monday afternoon. 

ShayLe Stewart
DTN Livestock Analyst


   At the day's opening bell, the cattle complex seemed as though it was going 
to trade strong; but as time passed, outside market concerns pushed contracts 
lower. The lean hog complex is in the same boat as its market is $1.00 to $2.00 
lower and desperately needs to see strong domestic consumer support. December 
lean hogs are down $2.88 at $79.925, December corn is down 7 cents per bushel 
and December soybean meal is down $1.90. The Dow Jones Industrial Average is 
down 270.76 points.


   Live cattle futures are plunging lower as the market's strong show in the 
cash cattle sector isn't enough support to outweigh the pressures of the 
economy's uncertainty. October live cattle are down $0.75 at $143.50, December 
live cattle are down $1.25 at $147.30, and February live cattle are down $1.07 
at $151.62. With boxed beef prices waning and packers now having to chase the 
cash market a little more aggressively -- monitoring slaughter speed is 
incredibly important. If boxes continue to work their way lower, packers may 
cut production in the form of slowing processing to preserve margin.

   Last week, Southern live cattle traded for $143, which is $1.00 stronger 
than last week's weighted average, and Northern dressed cattle traded for 
mostly $228, which is also $1.00 stronger than last week's weighted average.

   Boxed beef prices have not been updated by the USDA at this time. 


   Feeder cattle futures started the day off higher, but as the morning 
progressed lower tones sent the market tumbling lower. Friday's Cattle on Feed 
Report came out neutral as placements and on-feed totals were steady with a 
year ago, but marketings were 6% higher. Nevertheless, the market seems to be 
trading lower not because of Friday's report necessarily, but because of 
overbearing outside pressures (higher interest rates, higher inflation and 
overall economic uncertainty). October feeders are down $0.82 at $177.52, 
November feeders are down $0.57 at $177.67 and January feeders are down $0.92 
at $178.55. Thankfully the corn complex isn't adding to the list of market 
pressures as it's trading 5 to 6 cents lower.


   The lean hog complex is taking a wild ride in Monday's market and 
unfortunately the spot December contract is carving out a new low for the move, 
which is pressuring prices not last seen since February 2022. October lean hogs 
are down $1.97 at $90.65, December lean hogs are down $2.75 at $80.05, and 
February lean hogs are down $2.77 at $84.27. It's likely the market is 
concerned with China's third release of pork reserved last week and is 
skeptical of what this week's export report will unveil. Continuing to monitor 
pork cutout values will be one of the most important signals for the lean hog 
market as packers are going to need to see consumer support here domestically.

   The projected CME Lean Hog Index for 9/23/2022 is down $0.60 at $96.99, and 
the actual index for 9/22/2022 is down $0.42 at $97.59. Hog prices are higher 
on the Daily Direct Morning Hog Report, up $4.24 with a weighted average of 
$90.45, ranging from $82.00 to $100.00 on 5,271 head and a five-day rolling 
average of $93.03. Pork cutouts total 198.67 loads with 166.28 loads of pork 
cuts and 32.38 loads of trim. Pork cutout values: up $0.64, $101.57.

   ShayLe Stewart can be reached

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