DTN Midday Livestock Comments 08/07 12:20
Lean Hog Contracts Hail Higher While Cattle Trade Mixed
The lean hog complex isn't wasting the day but the cattle contracts, on the
other hand, trade lower in the live cattle complex and mixed in the feeder
DTN Livestock Analyst
Some livestock contracts are taking another swing at the market before the
week closes and heads into the weekend. Feeder cattle and lean hog contracts
are taking advantage of the momentum while the live cattle contracts are
hesitant. December corn is down 3 cents per bushel and December soybean meal is
down $1.10. The Dow Jones Industrial Average is down 40.37 points and NASDAQ is
down 39.31 points.
Live cattle contracts aren't seeing the same support and momentum as the
other livestock contracts are heading into Friday afternoon. August live cattle
are up $0.40 at $103.02, October live cattle are down $0.20 at $106.75 and
December live cattle are down $0.55 at $110.40. Cash cattle trade has been
mostly quiet as packers and feeders play tug-of-war with this week's prices in
the North. There's been light inquiry on cattle all throughout the day and some
cattle sold in Colorado for $103, and in Iowa for $164 dressed and $103 live.
It wouldn't be surprising to see more trade develop through the afternoon in
the Northern Plains.
Boxed beef prices are higher: choice up $0.33 ($204.99) and select up $0.78
($192.79) with a movement of 62 loads (32.92 loads of choice, 8.93 loads of
select, 8.53 loads of trim and 11.31 loads of ground beef).
Feeder cattle contracts are enjoying the modest gains in deferred contracts,
but the weakness in nearby contracts is disappointing. Last Friday, nearby
contracts shot through resistance at $143.85 and cattle enthusiasts prayed that
the market would be able to keep prices elevated beyond that threshold as sales
throughout the countryside continue to move higher. As this week progressed, a
toppy chart started to form and with Thursday's lower close, prices once again
sank below the resistance plane. Friday's trade has pushed nearby contracts
lower and regardless of the phenomenal strength throughout the country, the
nearby contracts keeping trading lower. August feeder cattle are down $0.62 at
$142.85, September feeder cattle are down $0.32 at $145.55 and October feeder
cattle are down $0.07 at $146.70.
Lean hog contracts are firing higher heading into Friday afternoon as
support from pork cutouts is strengthening the market along with the hope that
the government aid package may have specific subsidies for hog producers who
are battling hardship because of the backlog. Seeing nearby contracts jump
above the $50.00 threshold is exhilarating for the market as contracts have
simply been unable to break free from the resistance. August lean hogs are up
$1.37 at $51.12, October lean hogs are up $2.20 at $51.40 and December lean
hogs are up $1.57 at 53.07. Producers will be watching the board meticulously
throughout the afternoon hoping that the support can carry into the day's close
and potentially spur the market higher early next week.
The projected lean hogs index for 8/6/2020 is down $0.34 at $52.44 and the
actual index for 8/5/2020 is down $0.14 at $52.78. Hog prices are higher on the
National Direct Morning Hog Report, up $0.33 with a weighted average of $38.27,
ranging from $35.00 to $38.61 on 3.792 head and a five-day rolling average of
$39.28. Pork cutouts total 193.67 loads with 163.78 loads of pork cuts and
29.89 loads of trim. Pork cutout values: up $3.04, $73.84.
ShayLe Stewart can be reached firstname.lastname@example.org
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