DTN Closing Livestock Comment 10/20 16:09
Cattle Complex Attracts Some Support
Thankfully, as Tuesday rolled into the afternoon, the cattle complex
attracted some traders and closed higher following Monday's regression.
DTN Livestock Analyst
Tuesday's afternoon allowed traders the opportunity to jump back into the
marketplace and support the cattle contracts, but the same can't be said for
the lean hog market. Cattle contracts rallied into the day's close while the
lean hog market endured some pressure. Hog prices closed higher on the National
Direct Afternoon Hog Report, up $0.58 with a weighted average of $62.31 on
10,884 head. December corn is up 3 1/2 cents per bushel and December soybean
meal is down $1.30. The Dow Jones Industrial Average is up 113.37 points and
NASDAQ is up 37.61 points.
Thankfully, through Tuesday's afternoon, the live cattle complex saw traders
reinvest as the marketplace waned lower through Monday's trade and early into
Tuesday. October live cattle closed $0.12 higher at $104.12, December live
cattle closed $0.30 higher at $105.45 and February live cattle closed $0.47
higher at $108.65. Even though the boxed beef prices closed mixed, continuing
to see a vast movement of boxed beef is advantageous (if buyers keep buying)
for the cattle market as it should help keep packers incentivized to keeping a
rigorous kill pace. Tuesday's slaughter is estimated at 121,000 head, 1,000
head more than a week ago and 2,000 head more than a year ago. Unfortunately,
as Monday's cash cattle trade set a lower tone for the week, Tuesday again
traded cattle for mostly steady prices compared to Monday's trade. Texas moved
some cattle for $106, Iowa traded some cattle for $166 and Kansas sold some
cattle for $105 to $106.
Boxed beef prices closed mixed: choice up $0.86 ($210.60) and select down
$0.17 ($191.67) with a movement of 190 loads (124.76 loads of choice, 33.11
loads of select, 22.32 loads of trim and 9.38 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady with the week's decline. As the week's
already moved some cattle, it will be hard for feeders to do anything but be
steady with the week's trend. If feeders would have rallied together and waited
to sell cattle later in the week, there could have been some potential to trade
cattle steady with last week's prices.
As Tuesday morning's trade turned to the afternoon, the support that started
in the deferred feeder cattle contracts continued to grow and allowed the
market to close mostly higher. October feeder cattle closed $0.10 lower at
$134.50, November feeders closed $0.70 higher at $130.77 and January feeders
closed $1.47 higher at $126.70. As the market dropped significantly, traders
reevaluated their positions and opted to jump back into the market and support
both the live cattle and feeder cattle contracts. At Winter Livestock Auction
in La Junta, Colorado, compared to a week ago, calves sold uneven as buyers
were selective with specific weights and demanded that cattle be weaned and
have a vaccination program. Steers under 500 pounds sold $5.00 to $8.00 higher
with instances of even $10.00 higher. Steers weighing 500 to 700 pounds sold
$3.00 to $5.00 lower and steers over 700 pounds sold $1.00 to $2.00 lower.
Heifers calves under 350 pounds sold steady, heifers 350 to 400 pounds sold
$2.00 to $4.00 lower, heifers weighing 400 to 500 pounds sold steady to $5.00
higher, and heifers 500 to 600 pounds sold $3.00 to $5.00 lower. The CME feeder
cattle index for Oct. 19: down $1.60, $138.66.
The lean hog market saw some bearishness overtake the marketplace as the
complex fell lower through Tuesday's close. Upon being able to keep the
December contract elevated through Monday's close, the market was hoping to
have enough support to scathe by without absorbing any of the market's
weakness. December lean hogs closed $2.17 lower at $69.25, February lean hogs
closed $1.57 lower at $69.27 and April lean hogs closed $0.92 lower at $71.40.
The market was disappointed to see a weaker cutout close as the nation's pork
demand has been helping keep the market positive. It was interesting to see
Tuesday's cash hog market so active -- seeing packers buy over 10,000 head in
what was expected to be rather quiet day makes one wonder if another bullish
surprise is in store for the market. Pork cutouts total 353.59 loads with
322.80 loads of pork cuts and 30.79 loads of trim. Pork cutout values: down
$1.19, $96.91. Tuesday's slaughter is estimated at 488,000 head, steady with a
week ago and 1,000 head more than a year ago. The CME lean hog market for Oct.
16: up $0.04, $78.27.
WEDNESDAY'S CASH HOG CALL: Steady. Tuesday's cash hog market wasn't anything
that the industry expected as the futures market is brittle and as buyers sit
on considerable supplies.
ShayLe Stewart can be reached at email@example.com
(c) Copyright 2020 DTN, LLC. All rights reserved.
Get your local Cash Bids emailed to you each morning from DTN – click here
to sign up for DTN Snapshot.