DTN Midday Livestock Comments 08/11 12:22
Cattle Contracts Take Spotlight, Hogs Head Lower
Hog contracts headed into the week fully higher but as Tuesday rolled along,
cattle contracts took the market higher while the lean hog complex scaled lower.
DTN Livestock Analyst
The livestock complex traded mixed into the afternoon as cattle contracts
jump higher but the lean hog contracts are starting to run out of support. The
encouraging trade throughout the cattle contracts should help feedlots entice
packers into paying more again this week. Unfortunately, as the cattle
contracts grow and build into the afternoon, traders are simply seeming to lose
interest in the hog complex as its momentum is dwindling.
December corn is up 1 cent per bushel and December soybean meal is up $0.80.
The Dow Jones Industrial Average is up 273.86 points and NASDAQ is up 10.46
Live cattle contracts are pushing into Tuesday afternoon fully higher.
August live cattle are up $0.95 at $104.55, October live cattle are up $1.47 at
$108.62 and December live cattle are up $1.12 at $1.12 at $112.10. The strength
throughout the live cattle sector helped pull feeder cattle contracts higher as
the market wasn't sure if fully higher was where trade needed to head. Packers
have called on cattle throughout most of the feeding region, but bids are still
elusive. There have been some cattle trade in Kansas for mostly $103, but a
limited sampling did sell for $106. Bids could start to surface as early as
Tuesday afternoon, but it wouldn't be surprising if trade waited for
Wednesday's online auction and then developed.
Boxed beef prices are higher: choice up $1.15 ($208.35) and select up $2.74
($196.67) with a movement of 97 loads (51.38 loads of choice, 13.03 loads of
select, 9.14 loads of trim and 23.48 loads of ground beef).
The longer the feeder cattle contracts are given to trade the higher the
complex rolls into Tuesday afternoon. August feeders are up $1.07 at $144.67,
September feeders are up $1.42 at $146.77 and October feeders are up $1.22 at
$147.80. Having pushed through nearby resistance again, the complex will have
some solidifying to do. Feeder cattle sales support a stronger market but do
traders feel comfortable at these levels and are these prices are sustainable
over the short-term and also heading into the fall run?
The lean hog complex rallied robustly over the last two trading days and
although Tuesday is trading mostly lower, the complex reached levels not seen
since the middle of June. October lean hogs are down $1.50 at $52.32, December
lean hogs are down $1.00 at $53.70 and February lean hogs are down $0.82 at
$60.92. In the same lower fashion, the cash hog market couldn't push packers
higher again Tuesday morning, but as the afternoon rolls around it would be
encouraging for packers to keep their chain-speeds higher if cutout values
could scale higher. With a midday cutout value up $5.02, the afternoon report
could show a higher close as well.
The projected lean hog index for 8/10/2020 is up $0.77 at $53.79 and the
actual index for 8/7/2020 is up $0.58 at $53.02. Hog prices are lower on the
National Direct Morning Hog Report, down $0.82 with a weighted average of
$37.61, ranging from $36.00 to $38.81 on 4,860 head and a five-day rolling
average of $38.43. Pork cutouts total 222.12 loads with 200.69 loads of pork
cuts and 21.44 loads of trim. Pork cutout values: up $5.02, $75.09.
ShayLe Stewart can be reached email@example.com
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