DTN Midday Livestock Comments
Cash Cattle Trade is Vibrant Again Thursday
Though the livestock complex is split, trying to wade through the bullish and bearish indicators, the day is seeing some positive support building.
DTN Livestock Analyst
As Thursday has progressed and enters the afternoon, more support has developed through the feeder cattle and lean hog complexes that were trading lower earlier Thursday morning. Cash cattle trade has been steady with the week's pre-established prices, marking a solid $2.00 jump from last week's average. December lean hogs are down $0.48 at $62.625, December corn is up 4 3/4 cents per bushel and December soybean meal is up $6.10. The Dow Jones Industrial Average is up 118.67 points and NASDAQ is up 111.19 points.
As Thursday morning cash cattle trade has supported higher prices, the board scales higher boosted by the market's positive morale. October live cattle are up $0.05 at $108.60, December live cattle are down $0.35 at $112.00 and February live cattle are down $0.22 at $115.65. Though December 2020 and February 2021 contracts are lower, the deferred contracts from there on out and all scaling modestly higher. Cash cattle trade has been busy in the South as both Texas and Kansas sell cattle again for $107 which is fully steady with Wednesday's trade. Iowa has moved the market higher from Wednesday's business though as dressed cattle have sold for $168 and live cattle for $108 -- $1.00 higher than Wednesday's trade and $3.00 higher than last week's trade.
Beef net sales of 24,700 mt reported for 2020 were up 37% from the previous week and 67% from the prior four-week average. The three primary increases were from Japan (9,900 mt, including decreases of 600 mt), South Korea (5,700 mt, including decreases of 400 mt), China (4,300 mt).
Boxed beef prices are higher: choice up $0.84 ($218.58) and select up $0.89 ($208.43) with a movement of 83 loads (42.24 loads of choice, 21.93 loads of select, 5.56 loads of trim and 13.26 loads of ground beef).
Feeder cattle contracts are hesitant about the marketplace as Wednesday posted a monstrous corn rally, and though prices are only rallying a fraction of what they were compared to Wednesday, the $0.02 to $0.07 rally has feeders on edge. October feeders are up $0.50 at $141.87, November feeders are down $0.02 at $142.02 and January feeders are down $0.07 at $140.22. Despite concerns about feed costs, the feeder cattle market has warmed up to the idea of trading higher as the live cattle complex trades mostly higher and the cash cattle market is looking at moving this week's prices at least $2.00 higher.
The lean hog complex put a lot of pressure on Thursday's export report hoping that export sales would be astronomically higher and that the market would see significant support, but unfortunately, Thursday's report didn't match those expectations. That's not to say that export demand won't rise at some point down the road, but pork producers and traders alike must remember that the U.S. isn't the only source of pork for other nations. October lean hogs are up $1.20 at $74.00, December lean hogs are down $0.52 at $62.57 and February lean hogs are down $0.37 at $67.62.
Pork net sales of 39,500 mt reported for 2020 were up 5% from the previous week, but down 8% from the prior 4-week average. The three primary increases were for Mexico (17,900 mt, including decreases of 1,000 mt), China (6,500 mt, including decreases of 1,100 mt), Canada (4,400 mt, including decreases of 400 mt). The projected lean hog index for 9/30/2020 is up $0.20 at $76.74, and the actual index for 9/29/2020 is up $0.63 at $76.54. Hog prices are lower on the National Direct Morning Hog Report, down $1.10 with a weighted average of $63.60, ranging from $60.00 to $64.00 on 3,792 head and a five-day rolling average of $64.13. Pork cutouts total 165.04 loads with 137.96 loads of pork cuts and 27.08 loads of trim. Pork cutout values: up $8.69, $100.06.
ShayLe Stewart can be reached