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DTN Midday Livestock Comments          09/28 11:45

   Livestock Contracts Continue to Bleed Lower

   Wednesday hasn't shown the livestock complex any grace as the entire 
marketplace continues to trade lower.

ShayLe Stewart
DTN Livestock Analyst


   Yet again, we see another day where the livestock complex plummets lower as 
outside pressures of the market's economy continued to consume the largest 
portion of the market's focus. December corn is up 1 3/4 cents per bushel and 
December soybean meal is down $2.10. The Dow Jones Industrial Average is up 
393.49 points.


   The cash cattle market hasn't seen any business renewed at this point, and 
aside from the few head that traded Tuesday afternoon for steady prices, 
largely the market remains undeveloped. If the cash cattle market can 
successfully keep prices steady, then that bodes well for entire cattle complex 
as it shows that strength remains in some of the market's fundamentals. But 
given that packers have paid the market little to no attention Wednesday, 
feedlots are going to have their work cutout for them this week as packers will 
use the market's weakness as a bargaining tool. October live cattle are down 
$0.50 at $143.07, December live cattle are down $0.70 at $146.20 and February 
live cattle are down $0.55 at $150.30.

   The Fed Cattle Exchange Auction held Wednesday reported seven lots (six lots 
in Texas and one lot in Kansas), totaling 1,077 head of cattle, none of which 
sold. Opening prices were at $141, high bids had a range of $141 to $143, but 
none of these bids met reserve prices of $143 to $144.

   Boxed beef prices are mixed: choice up $0.40 ($248.83) and select down $1.29 
($219.92) with a movement of 113 loads (69.20 loads of choice, 20.89 loads of 
select, 12.90 loads of trim and 10.34 loads of ground beef).


   With the live cattle market aiding no support to the feeder cattle complex 
and corn trading just slightly above steady prices, the feeder cattle complex 
is again trending lower into Wednesday's afternoon. October feeders are down 
$1.25 at $174.87, November feeders are down $1.07 at $175.20 and January 
feeders are down $0.75 at $176.05. As September looks at its final trading days 
of the month, cow-calf producers who have yet to sell their calves are 
scratching their heads, wondering when this pressure will ease and how much 
more it's going to cost the market in the meantime.


   The entire livestock complex has taken a beating this week, but the lean hog 
complex's chart is ugly -- very ugly. Day after day, the market carves out a 
new low for the move, which is equivalent to the lowest prices the market has 
seen since in the last nine months. Questions about demand continue to hang 
over both the cattle and hog markets, but especially in the hog market as China 
has attempted to cheapen their own pork prices by releasing reserves three 
times this month. Nevertheless, both packers and producers are praying that 
export demand shows something positive come Thursday, and both continue to 
anxiously monitor domestic prices as support is dearly needed. October lean 
hogs are up $0.05 at $88.75, December lean hogs are down $0.52 at $75.72 and 
February lean hogs are down $1.02 at $79.32.

   The projected lean hog index for Sept. 27 down $0.81 at $95.60, and the 
actual index for Sept. 26 is down $0.58 at $96.41. Hog prices are lower on the 
Daily Direct Morning Hog Report, down $1.26 with a weighted average of $89.25, 
ranging from $82.00 to $102.00 on 4,303 head and a five-day rolling average of 
$90.59. Pork cutouts total 152.45 loads with 132.56 loads of pork cuts and 
19.89 loads of trim. Pork cutout values: up $0.89, $99.90.

   ShayLe Stewart can be reached

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