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DTN Midday Livestock Comments          08/15 11:32

   The Livestock Complex Looks for Fundamental Support

   The livestock complex is off to a slightly higher start to the beginning of 
the week as lower corn prices help ease feeding costs. 

ShayLe Stewart
DTN Livestock Analyst


   While heading into the new week the livestock complex is itching to trade 
higher but looking for the fundamental cues to do so. Helping all the contracts 
early in the week however is the fact that the corn complex is taking a beating 
come Monday as it has traded anywhere from $0.15 to $0.20 lower in the day's 
start. December corn is down 14 1/2 cents per bushel and December soybean meal 
is down $13.10. The Dow Jones Industrial Average is up 117.60 points.


   The live cattle market is hesitant to trade higher and heading into Monday's 
afternoon the complex is trading mixed with the spot and nearby contracts 
slightly higher while the rest of the market trends modestly lower. Last 
Friday's WASDE report should give the market all the confidence it needs to 
shoot higher with beef imports lower, beef exports raised, and beef production 
pegged higher thanks to aggressive processing speeds. This upcoming Friday the 
market will see another Cattle on Feed Report shared which could add some 
pressure if analysts don't carefully take into account all the cattle that were 
placed in July in Texas. Nevertheless, the market still sits in a fine position 
to rally as slaughter speeds are remaining strong and market-ready supplies of 
fat cattle are unusually thin for this time. August live cattle are up $0.02 at 
$140.25, October live cattle are up $0.05 at $144.55 and December live cattle 
are down $0.12 at $150.50. New showlists for the week appear to be lower in 
Kansas, and only slightly higher in Texas, Nebraska and Colorado.

   Last week's negotiated cash cattle slaughter totaled 100,017 head. Of that 
65% (64,722 head) were committee for the nearby delivery while the remaining 
35% were committed for the deferred delivery. Last week Southern live deals 
were marked at $138 to mostly $140, roughly $3 to $4.50 higher than the prior 
week's weighted averages. Northern dressed business had a full range of $227 to 
$236, mostly $229 to $230, about $2 to $3 higher than the previous week's 
weighted average basis for Nebraska.

   Boxed beef prices are higher: choice up $0.14 ($263.51) and select up $0.22 
($239.81) with a movement of 44 loads (23.16 loads of choice, 5.76 loads of 
select, 6.59 loads of trim and 8.32 loads of ground beef).


   As the corn complex dives anywhere from $0.15 to $0.16 lower in its nearby 
contracts, the feeder cattle market is beaming, seeming to wait for fundamental 
support to develop so that the market can continue to its upward trend. August 
feeders are up $0.52 at $180.15, September feeders are up $0.90 at $184.27 and 
October feeders are up $0.80 at $186.80. If the live cattle market can trade 
fat cattle higher again this week while the corn complex veers lower, then the 
feeder market should have a relatively problem-free time trading higher.


   As the lean hog market runs into Monday's market, traders are dealt the task 
of deciding how much more upside the market possesses. For producers' sake 
thankfully limited supplies of market-ready hogs have driven cash prices higher 
and with consumer demand, strong packers have stayed engaged in the marketplace 
not wanting to miss out on an opportunity to sell product. From a technical 
sense, the market seems to be running out of steam however as traders ran a 
number of the contracts last week to new highs. If demand continues to be 
favorable and processing speeds run aggressively this week, then the market 
could chop sideways, but if fundamental support lags, then a lower trend 
technically will be what the market expects. October lean hogs are up $0.30 at 
$100.32, December lean hogs are up $0.37 at $90.75 and February lean hogs are 
up $0.35 at $93.10.

   The projected lean hog index for 8/12/2022 is down $0.22 at $121.71, and the 
actual index for 8/11/2022 is up $0.07 at $121.93. Hog prices are lower on the 
Daily Direct Morning Hog Report down $3.32 with a weighted average of $114.82, 
ranging from $114.50 to $126.00 on 2,847 head and a five-day rolling average of 
$123.52. Pork cutouts total 180.95 loads with 141.21 loads of pork cuts and 
39.74 loads of trim. Pork cutout values: up $7.74, $129.57.

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

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