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DTN Midday Livestock Comments          12/05 12:11

   Cheaper Corn Brings Excitement to the Livestock Sector

   The livestock complex is trading higher into Monday afternoon as the 
contracts are fond of the weakening corn sector.

ShayLe Stewart
DTN Livestock Analyst

GENERAL COMMENTS:

   The entire livestock complex is trending higher into Monday afternoon as the 
market warmly welcomes the onset of cheaper corn. The feeder cattle complex is 
leading the charge higher as its market has now broken above both the 40-day 
and 100-day moving averages. March corn is down 7 1/4 cents per bushel and 
January soybean meal is up $7.30. The Dow Jones Industrial Average is down 
331.23 points.

LIVE CATTLE:

   After last week's mostly supportive trade, the live cattle complex is again 
trending higher into Monday afternoon. Helping the market more than anything at 
this point is that the corn complex is finding a softer bottom to its market 
which obviously comes as celebratory news to cattle feeders who are facing 
extremely high cost of grains. The cheaper it becomes for feedlots to finish 
cattle, the more margin they should be able to secure if cash prices keep 
trending in the current upward fashion. December live cattle are up $0.07 at 
$153.42, February live cattle are up $0.35 at $156.22 and April live cattle are 
up $0.37 at $159.95.

   Last week Southern live cattle traded for $153.50 to $155, but mostly at 
$155, which is fully steady with the previous week's weighted average. Northern 
dressed cattle traded for $245 to $249, but mostly at $249, which is $4.00 
higher than the previous week's weighted average.

   Boxed beef prices are lower: choice down $2.69 ($247.24) and select down 
$1.47 ($223.09) with a movement of 68 loads (39.49 loads of choice, 7.70 loads 
of select, 13.22 loads of trim and 7.16 loads of ground beef).

FEEDER CATTLE:

   With the nearby corn contracts trending $0.05 lower into Monday's noon hour, 
the feeder cattle market is trading anywhere from 57 to 142 points higher as 
feeders are loving the idea of cheaper feed prices. The nearby contracts are 
seeing the biggest gains and current the spot January contract is not only 
trading above its 40-day moving average, but also above its 100-day moving 
average. The real question in the feeder cattle complex remains to be: What are 
fat cattle prices going to do? In order for buyers to justify paying these 
purchase prices, the output price of fats has to get stronger. January feeders 
are up $1.40 at $183.85, March feeders are up $1.15 at $186.42 and April 
feeders are up $0.82 at $189.45.

LEAN HOGS:

   As the day has traded on the lean hog complex has grown more and more 
confident in itself as prices are not only trading higher, but they're breaking 
through current resistance points. December lean hogs are up $0.10 at $82.52, 
February lean hogs are up $0.90 at $91.32 and April lean hogs are up $0.37 at 
$96.20. As hog producers face extremely high feed prices, part of the market's 
excitement stems from the fact that corn is trending $0.05 lower in its nearby 
contracts. Additionally, the market could see followed through support in 
Tuesday's complex if pork cutout values are able to close higher. The midday 
report shows the carcass up $0.88 as the loin is up $4.08 and the rib is up 
$4.91 -- two very supportive price jumps.

   The projected lean hog index for 12/2/2022 is down $0.08 at $82.79, and the 
actual index for 12/1/2022 is down $0.37 at $82.87. Hog prices are unavailable 
on the Daily Direct Morning Hog Report as there hasn't been enough packer 
participation to break through the threshold of confidently. We can see that 
3,232 head have traded and that the market's five-day rolling average sits at 
$84.99. Pork cutouts total 178.94 loads with 151.48 loads of pork cuts and 
27.45 loads of trim. Pork cutout values: up $0.88, $89.82.

   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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