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DTN Midday Livestock Comments 10/27 13:22
Cattle Contracts Trading Fully Higher
It's been a prosperous morning for most of the livestock market as cattle
contracts are trading fully higher and though support has been shaky for the
lean hog market, it looks as though support is gaining as the afternoon
approaches.
ShayLe Stewart
DTN Livestock Analyst
The livestock complex has reaped the benefits from the support surfacing
throughout Tuesday morning's trade. Cattle contracts have steadily traded
higher all throughout the day, but the lean hog complex has been a bit touchy
-- trading higher and lower throughout the morning. December corn is down 2 1/4
cents per bushel and December soybean meal is down $3.80. The Dow Jones
Industrial Average is down 84.96 points and NASDAQ is up 64.04 points.
LIVE CATTLE
With live cattle prices faring better than expected, feeders are hopeful to
push cash cattle trade to the end of the week and bat for at least steady
prices. December live cattle are up $0.30 at $103.70, February live cattle are
up $0.15 at $106.55 and April live cattle are up $0.87 at $110.37. The mixed
trade in boxed beef prices will still make getting much of a premium off last
week's trade difficult as packers are seeing lower retail prices -- but steady
trade isn't out of the question. Bids and asking prices are still elusive and
it's very likely that this week's trade won't develop until after Wednesday's
online auction.
Boxed beef prices are mixed: choice down $0.29 ($207.54) and select up $0.55
($189.04) with a movement of 119 loads (64.12 loads of choice, 20.62 loads of
select, 13.23 loads of trim and 21.18 loads of ground beef).
FEEDER CATTLE
The feeder cattle market took the brunt of last week's downward spiral but
come Tuesday the market is taking full advantage of the building support.
November feeder cattle are up $2.40 at $132.87, January feeder cattle are up
$2.35 at $129.12 and March feeders are up $2.25 at $128.67. Helping support the
market is the slight regression in the nearby corn contracts and traders being
willing to step back into the market and leave their sideline position. Feeder
cattle and calves sold mostly lower throughout the countryside Monday
afternoon, but it was interesting to see sale receipts lower than the previous
week. As cow-calf producers saw a weaker market they revaluated their marketing
strategy, and some decided to wait a little longer for a better market.
LEAN HOGS
Finding support has been touch and go for the lean hog market as cattle
contracts seem to be drawing more trader interest. As the lean hog market
starts to face some resistance, it makes sense that traders would be more prone
to looking at the cattle contracts as they've scaled considerably lower here
recently. December lean hogs are steady at $67.75, February lean hogs are up
$0.22 at $67.87 and April lean hogs are down $0.10 at $69.97. Following
Monday's weaker pork cutout close, Tuesday's midday cutout looks promising for
a stronger close, but the market has been facing some regression in cutout
values as of late.
The projected lean hog index for 10/23/2020 is down $0.37 at $78.17 and the
actual index for 10/22/2020 is down $0.06 at $78.54. Hog prices are higher on
the National Direct Morning Hog Report, up $0.81 with a weighted average of
$61.32, ranging from $56.00 to $61.32 on 4,276 head and a five day rolling
average of $60.08. Pork cutouts total 198.41 loads with 179.42 loads of pork
cuts and 18.99 load of trim. Pork cut out values: up $3.03, $94.89.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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