DTN Closing Livestock Comment 09/23 16:14
Cattle Contracts Close Fully Higher Wednesday
Cattle contracts closed higher, giving feeders confidence in asking higher
prices for this week's cash cattle trade.
DTN Livestock Analyst
Wednesday boosted the moral throughout the cattle sector after following two
days of mostly lower trade. The lean hog complex was still able to rally nearby
contracts but fought some hesitation in deferred contracts. Hog prices are
higher on the National Direct Afternoon Hog Report, up $1.00 with a weighted
average of $64.35 on 9,463 head. December lean hogs are up $0.25 at $64.35,
December corn is down 3/4 cent per bushel and December soybean meal is up
$3.60. The Dow Jones Industrial Average is down 525.05 points and NASDAQ is
down 330.66 points.
Wednesday's support was a much-needed change of direction for the cattle
contracts. Leading into the later part of the week, cash cattle sellers are
wondering how much support they'd get for higher prices if the board traded
lower throughout the week. October live cattle closed $0.67 higher at $107.15,
December live cattle closed $1.02 higher at $111.20 and February live cattle
closed $0.60 higher at $114.80. Feedlots are sticking to their guns and holding
tough, waiting for the later part of the week, hoping to get another $1.00 or
$2.00 out of packers. The countryside was quiet, extremely quiet, as packers'
bids were few and far in between and feedlots aren't antsy to get cattle moved.
Wednesday's slaughter is estimated at 120,000 head, steady with a week ago and
2,000 head more than a year ago.
Boxed beef prices closed higher: choice up $0.43 ($215.87) and select up
$1.30 ($207.60) with a movement of 169 loads (92.18 loads of choice, 30.38
loads of select, 11.38 loads of trim and 35.42 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady to $1.00 higher. With feedlots holding
out until the later part of the week, packers will have to get aggressive in
their purchasing if they want to buy any cattle this week.
After the noon hour passed, the feeder cattle complex was able to absorb
some of the support that was building in the live cattle arena. October feeders
closed $0.90 higher at $141.52, November feeders closed $0.47 higher at $141.65
and January feeders closed $0.50 higher at $139.95. The countryside sits in a
transitioning period as some sale barns and auction yards are seeing calves
coming to town a couple weeks early, while other sales are still mostly quiet
waiting for the month of October to arrive before unleashing the hectic nature
of the fall run. The CME feeder cattle index 9/22/2020: down $0.17, $142.28.
The lean hog market closed mostly higher, other than some 2021 contracts
that fought mild pressure through Wednesday's close. October lean hogs closed
$1.17 higher at $69.50, December lean hogs closed $0.25 higher at $64.35 and
February lean hogs closed steady at $69.07. Again, the cash market moved $1.00
higher as packers are tirelessly buying hogs and wanting to be able to
capitalize on export demand in the near future. Thursday's export demand will
be highly sought after and will continue to be in the weeks to come. Pork
cutouts totaled 290.66 loads with 255.01 loads of pork cuts and 35.65 loads of
trim. Pork cutout values: up $0.31, $88.97. Wednesday's slaughter is estimated
at 487,000 head, 2,000 head more than a week ago and 11,000 head more than a
year ago. The CME lean hog index 9/21/2020: up $0.88, $72.17.
THURSDAY'S CASH HOG CALL: Steady to higher. At some point packers are going
to step back and work through the hogs they have, but, as of right now, they
show no signs of weakening their bids in the short term.
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.