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DTN Midday Livestock Comments          08/06 12:09

   Livestock Contracts Scale Lower

   Thursday hasn't granted the cattle contracts any support in continuing their 
upward trend, and has suppressed the lean hog contracts in the process.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Heading into Thursday's afternoon trade, the livestock contracts are losing 
their strength and have turned to mostly lower trade. Cash cattle trade is 
getting a little more attention as packers and feeders seem to be finding some 
middle ground in Iowa on a small test. December corn is steady and December 
soybean meal is down $1.10. The Dow Jones Industrial Average is up 18.15 points 
and NASDAQ is up 18.99 points.


   Live cattle contracts have sunk to the pressure building as the noon hour 
approaches, turning most of the complex fully lower. August live cattle are up 
$0.07 at $102.37, October live cattle are down $0.62 at $106.82 and December 
live cattle are down $0.85 at $110.80. A tough game of hard ball is keeping the 
cash cattle market interesting as packers irritably up their bids to $162 in 
the Northern Plains and other than a small sampling of cattle in Nebraska that 
did sell, feedlots seem mostly uninterested as their asking prices is set at 
$165. In the Southern Plains asking prices are firm at $101 to $102.

   Thursday's export report shared that beef net sales of 13,400 mt were 
reported for 2020 which was down 55% from the previous week and 35% from the 
prior four-week average.  The three primary increases were from Japan (4,600 
mt, including decreases of 600 mt), South Korea (3,200 mt, including decreases 
of 400 mt) and Canada (1,200 mt, including decreases of 100 mt).

   Boxed beef prices are higher: choice up $1.18 ($204.75) and select up $1.17 
($191.99) with a movement of 71 loads (41.75 loads of choice, 9.66 loads 
select, 6.16 loads of trim and 12.97 loads of ground beef).


   Feeder cattle contracts are trading one shaky ground - higher one minute, 
lower next and are sitting dangerously close to the resistance levels that were 
broke through last Friday. As trade continues to panic, the understanding that 
the feeder cattle charts are topping out is becoming more prominent. August 
feeders are down $0.92 at $143.87, September feeders are down $0.05 at $146.42 
and October feeders are up $0.07 at $147.37.


   Nearby lean hog contracts are able to hold steady while the rest of the 
livestock contracts trade lower. August lean hogs are $0.42 higher at $49.87, 
October lean hogs are steady at $49.30 and December lean hogs are steady at 
$51.47. The resistance at the $50.00 threshold has nearby contracts held 
hostage as support has been strong enough to move the nearby contracts higher 
to where deferred contracts are trading.

   Pork net sales of 30,300 mt were reported for 2020 which was down 23% from 
the previous week and 14% from the prior 4-week average.  The three primary 
increases were from Mexico (12,900 mt, including decreases of 200 mt), China 
(5,600 mt, including decreases of 3,000 mt), Canada (2,700 mt, including 
decreases of 400 mt).

   The projected lean hog index for 8/5/2020 is down $0.14 at $52.78 and the 
actual index for 8/4/2020 is up $0.11 at $52.92. Hog prices are higher on the 
National Direct Morning Hog Report, up $0.50 with a weighted average of $39.03, 
ranging from $36.00 to $40.00 on 3,402 head and a five-day rolling average of 
$39.86. Pork cutouts total 180.04 loads with 163.67 loads of pork cuts and 
16.37 loads of trim. Pork cutout values: up $4.93, $71.97.

   ShayLe Stewart can be reached

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