DTN Midday Livestock Comments 08/13 12:54
Feeder Cattle Contracts Beginning to Weaken
Live cattle and lean hog contracts head into Thursday's afternoon trade
fully higher, but the feeder cattle complex isn't as boastful as upward
resistance is setting in.
DTN Livestock Analyst
Heading into Thursday's afternoon hours, live cattle contracts push full
steam ahead, the lean hog complex has seen a spark in support and meanwhile the
feeder cattle contracts are fighting nearby resistance that is turning most of
the contracts lower. Packers continue to hold their cards tight to their chest
as some more cattle have traded throughout the Southern Plains, but the
Northern Plains remain extremely quiet. December corn is up 11 1/2 cents per
bushel and December soybean meal is up $9.80. The Dow Jones Industrial Average
is down 51.91 points and NASDAQ is up 98.00 points.
Live cattle contracts keep scaling higher while the cash cattle market is
shaping up to be tough in the Northern Plains as packers seem reluctant to pay
this week's asking prices and feeders are unwilling to budge as their supplies
are mostly current. August live cattle are up $0.80 at $107.15, October live
cattle are up $0.67 at $110.25 and December live cattle are up $0.32 at
$112.87. Packers have picked up some more Southern cattle at $104 and have
placed bids from $165 to $170 dressed in Iowa and $106 to $107 live in Iowa as
well. Thus far feeders have let those bids sit idly on the table. Heading into
the afternoon it will be important to see where boxed beef movement ends up as
Wednesday was an impressive day moving 182 loads as Americans begin to prepare
for Labor Day weekend.
Thursday's export report shared that beef sales of 11,600 mt were reported
for 2020 which was down 13% from the previous week and 46% from the prior
4-week average. The three primarily increases were from Japan (2,900 mt,
including decreases of 500 mt), China (1,900 mt) and Canada (1,400 mt,
including decreases of 100 mt).
Boxed beef prices are higher: choice up $1.83 ($210.92) and select up $1.51
($197.50) with a movement of 98 loads (53.39 loads of choice, 18.75 loads of
select, 13.47 loads of trim and 12.42 lads of ground beef).
After three days of strong gains in the feeder cattle complex, Thursday's
feeder cattle market is fighting modest resistance in nearby contracts. August
feeders are steady at $145.25, September feeders are down $0.50 at $147.45 and
October feeders are down $0.60 at $148.50. The countryside sits without any
major feeder cattle sales this week; just the scheduled sales throughout the
sale barns which have continued to be aggressive. But next week Superior will
host their Big Horn Classic sale in Sheridan, Wyoming, and Western Video Market
will host their video sale in Cheyenne, Wyoming, and the following week
Northern Livestock Video auction is set to host their Early Fall Preview. As
the market bounces back and forth between thinking the markets done what it can
in the short term to believing that with the immense support for buyers there's
more to be had -- these upcoming sales will dial-in the market's perspective as
The lean hog complex has seen nearby contracts jump upwards of $0.80 while
deferred contracts follow in a modest fashion. August lean hogs are up $0.87 at
$53.77, October lean hogs are up $0.82 at $52.42 and December lean hogs are up
$0.77 at $54.17. The market's been able to slowly push cutout values modestly
higher and hopefully Thursday's close can continue with the market's strength.
As the feeder cattle contracts grow and traders worry about how much more
upside potential is in the market, the lean hog complex becomes more appealing.
The projected lean hog index for 8/11/2020 is up $0.03 at $53.82, and the
actual index for 8/10/2020 is up $0.77 at $53.79. Hog prices are unavailable on
the National Direct Morning Hog Report due to confidentiality. Pork cutouts
total 184.29 loads with 148.92 loads of pork cuts and 35.38 loads of trim. Pork
cutout values: up $4.01, $76.45.
Pork net sales of 10,500 mt were reported for 2020 which was down 66% from
the previous week and 70% from the prior 4-week average. The three primarily
increases were from Mexico (8,800 mt, including decreases of 200 mt), Japan
(2,700 mt, including decreases of 900 mt) and Canada (1,600 mt, including
decreases of 400 mt).
ShayLe Stewart can be reached firstname.lastname@example.org
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