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DTN Midday Livestock Comments          10/05 11:38

   Stronger Tones Lead Livestock Higher Into Afternoon

   The cash cattle market remains quiet as packers are trying to avoid paying 
more for cattle, but feedlots seem quite determined to move the market at least 
$1.00 higher.

ShayLe Stewart
DTN Livestock Analyst


   The livestock complex is heading into Wednesday's afternoon fully higher as 
the market welcomes traders' interest and hopes that follow-through fundamental 
support reaches the markets Wednesday afternoon. After closing sharply lower 
Tuesday afternoon, the lean hog complex is back to rallying in a hasty way as 
traders seem quick to want to recover lost position. December corn is up 3 
cents per bushel and December soybean meal is steady. The Dow Jones Industrial 
Average is down 172.16 points.


   The live cattle market hasn't seen much business shake through its market 
has of yet as traders are mildly supporting the contracts, seeming to wait to 
see how the cash cattle market trades. Feedlots know that packers are hungry 
for cattle and have thus held strong in waiting the week out for potentially 
higher prices. A lone bid of $234 stands in Nebraska, but at this point, 
feedlots are passing it by. Asking prices are noted in the South at $145 but 
are still not established in the North. October live cattle are up $0.82 at 
$145.02, December live cattle are up $0.67 at $148.17 and February live cattle 
are up $0.70 at $151.95.

   The Fed Cattle Exchange Auction held Wednesday reported 8 lots (6 lots in 
Texas and 1 lot each in Nebraska and Kansas), totaling 1,557 head of cattle. 
Opening prices were at $141 to $142, high bids had a range of $141.50 to 
$144.25, reserve prices were $143 to $145. Only 1 lot sold, 201 head in 
Nebraska at $144.25.

   Boxed beef prices are lower: choice down $0.54 ($247.50) and select down 
$1.84 ($220.07) with a movement of 108 loads (72.61 loads of choice, 19.09 
loads of select, 7.22 loads of trim and 9.14 loads of ground beef).


   Feeder cattle are aiming to close higher and even with the corn complex 
pushing $0.03 to $0.04 rally heading into noon hour, the market seems confident 
in its upward quest. October feeders are up $1.55 at $176.25, November feeders 
are up $1.72 at $176.92 and January feeders are up $1.35 at $177.42. It's 
helping that the live cattle market is trading higher too, but the biggest 
supportive gesture is stemming from the likelihood that feedlots will see 
higher prices again this week. If the cash cattle market does indeed trade 
higher and corn doesn't pose much more of treat, then a stronger close isn't 
out of the picture for the feeder cattle market.


   The lean hog market has posted a stronger trade after the market was 
blindsided by traders Tuesday afternoon and closed sharply lower. The 
trajectory of the market remains shaky as, on one hand, hogs possess some 
opportunity to trade higher given that the market is far from any resistance 
pressure and the sheer volume of hogs needed to be marketed its overbearing. 
But, at the same time, with demand being questionable both domestically and 
internationally, packers are quick to react to protect their margins, which 
adds a shakable level of uncertainty and volatility to the complex. December 
lean hogs are up $2.12 at $76.55, February lean hogs are up $1.52 at $78.80 and 
April lean hogs are up $1.15 at $84.45.

   The projected lean hog index is delayed from the source. Hog prices are 
higher on the Daily Direct Morning Hog Report, up $4.11 with a weighted average 
of $89.92, ranging from $83.00 to $98.00 on 7,852 head and a five-day rolling 
average of $87.20. Pork cutouts total 176.61 loads with 150.70 loads of pork 
cuts and 25.91 loads of trim. Pork cutout values: up $2.45, $100.74.

   ShayLe Stewart can be reached

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