DTN Midday Livestock Comments 10/23 12:21
End-of-Week Slump Continues
A few contracts show small gains, but most live cattle, feeder cattle, and
lean hog futures contracts are moving lower at the middle of Friday's session.
A few nearby live cattle contracts are peeking into positive territory in
the middle of Friday's session, but overall, the tone of livestock trade
remains bearish with lower momentum carrying through from the past four
sessions and a big cattle-on-feed report expected. December corn is up 2 cents
per bushel and December soybean meal is up $0.60 per ton. The Dow Jones
Industrial Average is down 152 points and NASDAQ is down 42 points.
December live cattle are up $0.45 at $103.925, February live cattle are up
$0.225 at $107 and April live cattle are down $0.175 at $109.70. The trade
continues to look to Friday afternoon's Cattle on Feed numbers, which are
bearishly expected to show record-large October inventory in the range of 11.65
million head. Bear in mind, however, that while the raw October 1 number of
animals may be large, many of the new arrivals this fall have been coming off
of pastures notably light in weight, with extreme and exceptional drought still
reigning over Colorado and most of the western U.S. cattle country. Earlier
this week Northern dressed deals ranged from $163 to $165, which is mostly $3
to $4 lower than last week. Southern cattle have traded for mostly $106, which
is mostly $2 lower than last week.
Boxed beef prices are higher: choice up $0.11 ($208.97) and select up $1.02
($192.10) with a movement of 75 loads (34.22 loads of choice, 6.94 loads of
select, 23.73 loads of trimmings, and 10.07 loads of ground beef).
With the nearby corn futures contract hitting a fresh yearly high at $4.19
3/4 in intraday movement Friday, the conservative feeder cattle pricing at sale
barns and on the futures board will likely continue. The October contract, up
$0.175 at $134, has experimented with some small gains off and on through the
session, but deferred contracts portray the more overwhelming sense of
bearishness that has been true of feeder cattle contracts since Monday's slide.
The November contract is down $0.175 at $130.25 and the January 2021 contract
is down $0.125 at $126.075.
There was virtually no question that hog futures contracts would be headed
toward a lower weekly close as the Friday trading session rounds out, and
although the December contract is up $0.75 at $66.95, deferred contracts are
indeed staying on their downward course. The February contract is down $0.125
at $66.725 and the April contract is down $0.35 at $69.35.
The projected lean log index for 10/22/2020 is down $0.06 at $78.54 and the
actual index for 10/21 is down $0.09 at $78.60. The National Direct Morning Hog
report was delayed Friday due to packer submission problems, but Thursday's
weighted average was $59.80 after a five-day rolling average of $60.31. Pork
cut-outs total 187.83 loads with 174.61 loads of pork cuts and 13.22 loads of
trim. Pork cut-out values: down $0.11, $98.73.
Elaine Kub can be reached firstname.lastname@example.org
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