DTN Midday Livestock Comments          12/06 11:37

   Livestock Futures Desperate for Fundamental Support

   With the corn complex posing a minor comeback through Tuesday morning, the 
livestock complex has been rocked back on its heels and sent trading lower.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   It's a tough day for the cattle complex as both the live cattle and feeder 
cattle markets trade substantially lower, and the lean hog market isn't trading 
any better either. As traders cautiously view the marketplace, the timid nature 
of the futures market mixed with slightly higher corn prices and a lack of 
fundamental demand early this week as hurt both cattle and hog futures. March 
corn is up 1 3/4 cents per bushel and January soybean meal is up $18.00. The 
Dow Jones Industrial Average is down 316.23 points.

LIVE CATTLE:

   It's a gloomy day throughout the live cattle complex as the market stomachs 
the fact that Monday's choice close was the lowest that the year has seen. Now, 
to be clear, it's normal to see a downturn in boxed beef prices through 
December, but the real question for market is: Where's the actual bottom? It's 
likely that the market will continue to face pus back in boxed beef prices 
throughout the week, which could wane negatively on the futures complex. 
Whether or not these weaker boxed beef prices have an affect on this week's 
cash cattle market remains unknown. To feedlots' advantage, showlists are 
extremely current, which will likely keep packers engaged in the market to some 
degree. But with packers expected to scale back production as a way to manage 
margin and minimize their need to chase after the cash sector, feedlots could 
be faced with steady prices. Some early asking prices are noted in the South at 
$157, but the North hasn't disclosed their early asking prices yet. December 
live cattle are down $1.45 at $151.77, February live cattle are down $1.90 at 
$153.92 and April live cattle are down $1.72 at $157.85.

   Boxed beef prices are lower: choice down $0.96 ($242.35) and select down 
$0.68 ($220.43) with a movement of 84 loads (48.68 loads of choice, 15.73 loads 
of select, 4.72 loads of trim and 14.58 loads of ground beef).

FEEDER CATTLE:

   The topsy-turvy nature of the relationship between feeder cattle and corn 
continues as the corn market is posing a minor $0.02 advancement in its nearby 
contracts, which has the feeder cattle market trading anywhere from 107 to 317 
points lower. Tuesday's lower downturn has moved the spot January contract back 
below it's 100-day moving average, and unfortunately, until the market sees 
support from either the live cattle or cash cattle market or lower corn prices, 
this lower waning tone could persist. January feeders are down $2.92 at 
$180.85, March feeders are down $3.05 at $183.32 and April feeders are down 
$2.87 at $186.65.

LEAN HOGS:

   The lean hog complex is in a position much like the cattle sector -- longing 
for support fundamentally but coming up short thus far in Tuesday's market. 
February lean hogs are down $2.77 at $87.77, April lean hogs are down $2.22 at 
$93.60 and June lean hogs are down $1.35 at $105.52. Pork cutout values may be 
higher at midday, but it's likely that they close lower yet again as the belly 
has proven time and time again that it's a volatile cut right now with so much 
product sitting in cold storage. With traders pushing the contracts lower at 
Tuesday's noon hour, it's seeming as though they're making a statement that, 
unless the market's fundamentals improve, the resistance at $90.00 is here to 
stay.

   The projected lean hog index for Dec. 5 is up $0.15 at $82.94 and the actual 
index for Dec. 2 is down $0.08 at $82.79. Hog prices are averaging $82.13 on 
the Daily Direct Morning Hog Report, ranging from $80.00 to $84.00 on 6,556 
head and a five-day rolling average of $84.98. Pork cutouts total 193.26 loads 
with 179.56 loads of pork cuts and 13.70 loads of trim. Pork cutout values: up 
$5.74, $92.20.

   ShayLe Stewart can be reached shayle.stewart@dtn.com

   **

   Cattlemen are eager for supply and demand mechanics to swing their way, but 
the market isn't completely free of hurdles as bearish concerns about the U.S. 
and global economies loom. Hear DTN Livestock Analyst ShayLe Stewart's thoughts 
on the 2023 cattle market at the all-virtual DTN Ag Summit on Dec. 12-13. Full 
details available at http://www.dtn.com/agsummit




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