DTN Midday Livestock Comments 10/28 13:00
Feeder Cattle Contracts Paying Close Attention to Corn Prices
Cattle contracts are keeping with their upward trend, hoping to regain
ground lost from last week's regression and keep rallying into the latter part
of the week to encourage cash cattle prices.
DTN Livestock Analyst
The cattle contracts are soaking up this week's support, rallying modestly
in the live cattle market and upwards of $1.00 higher in the feeder cattle
market. Meanwhile in the lean hog market the contracts keep stair-stepping
lower as pressure around resistance levels encourages the market to trade
lower. December corn is down 11 1/4 cents per bushel and December soybean meal
is down $6.00. The Dow Jones Industrial Average is down 678.49 points and
NASDAQ is down 316.80 points.
The live cattle market is liking the support that is largely stemming from
the rally in the feeder cattle market and obvious support from traders who are
willing to step back into the market. December live cattle are up $0.62 at
$104.67, February live cattle are up $0.47 at $107.47 and April live cattle are
up $0.57 at $111.22. Wednesday's usual cash cattle business didn't go as
planned as the Fed Cattle Exchange experienced some technical difficulties and
was unable to host their weekly sale. Around midmorning some cash cattle bids
did start to lightly develop. There are some cattle bid on in Texas at $104 but
asking prices are starkly higher at $108 in the South, and the North has yet to
set their prices. Trade is more likely to see develop Thursday and Friday
though there could be some mild developments throughout Wednesday afternoon.
Boxed beef prices are mixed: choice down $0.75 ($205.95) and select up $1.16
($189.83) with a movement of 110 loads (65.52 loads of choice, 15.51 loads of
select, 8.42 loads of trim and 20.71 loads of ground beef).
Feeder cattle contracts are bound and determined to make a comeback as the
market has successfully rallied three days in a row. Wednesday's biggest
support is coming from the corn market hard sell off as December corn falls
$0.11 lower per bushel, and March corn is down $0.10 per bushel. November
feeders are up $1.37 at $133.67, January feeders are up $1.30 at $129.75 and
March feeders are up $1.17 at $129.22. If the market can keep this forward
momentum, and see some progress made in the live cattle market - buyers could
be somewhat more willing to look at feeder cattle and calves selling this fall.
As the lean hog market scales lower, seemingly unwilling to surpass the
market's current resistance planes, traders look at the cattle contracts with
more interest and leave the hogs to fall lower. December lean hogs are down
$1.37 at $66.27, February lean hogs are down $1.92 at $66.12 and April lean
hogs are down $1.77 at $68.60. Pork cutouts aren't as hot Wednesday as they
were earlier in the week, and with the cash markets lower midday prices, the
market sits fully lower heading into Wednesday afternoon. As time passes and we
begin to look to Thursday, the week's export report has a way of gravely
affecting the pork market. Hog producers obviously hope for a strong report to
keep packers vigorously processing and to help move front-end supplies.
The projected lean hog index for 10/26/2020 is down $0.70 at $77.47 and the
actual index for 10/23/2020 is down $0.37 at $78.17. Hog prices are lower on
the National Direct Morning Hog Report, down $1.12 with a weighted average of
$61.44, ranging from $58.00 to $63.50 on 5,110 head and a five-day rolling
average of $60.62. Pork cutouts total 226.60 loads with 203.84 loads of pork
cuts and 22.76 loads of trim. Pork cutouts values: down $0.01, $88.82.
ShayLe Stewart can be reached firstname.lastname@example.org
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