DTN Midday Livestock Comments 09/18 12:32
Cattle Contracts Take Friday's Momentum
Seeing the opportunity to jump higher before the week's close, cattle
contracts rally modestly and a bump in cash prices helps support the movement.
DTN Livestock Analyst
The board's midmorning shift to higher prices complemented the cash cattle
market and sent dressed cattle prices in Nebraska $2.00 higher than Thursday's
trade and $4.00 higher than last week's average. The cattle market's support is
coming as a pleasant surprise and even though the lean hog market is trading
lower, its losses remain mild and with news about another round of CFAP
payments, widespread support could carry over into the lean hog complex before
the day is over. December corn is up 1 3/4 cents per bushel and December
soybean meal is up $6.40. The Dow Jones Industrial Average is down 76.04 points
and NASDAQ is down 128.42 points.
The other important news is that on Friday morning USDA released details
about another round of CFAP payments. DTN's Ag Policy Editor Chris Clayton
shared the specifics of the announcement, which can be found here in the Ag
News section on DTN subscription products.
b91-6376-4a7b-ad41-ef73067a03fe. But for beef cattle, hogs and pigs the payment
will be of the inventory owned (excluding breeding stock) from April 16,2020 to
Just when we thought the week's price range had been established - feedlots
in the North continued to market their cattle vigorously, not caving early in
the week and lo-and-behold they pulled another $2.00 (on top of what the market
already gained earlier in the week) from packers Friday morning. Early Friday
morning the board was indecisive on how it was going to trade but midmorning
support continued to build and now the complex enters Friday afternoon fully
higher. It was also interesting to see that of some of the cattle that traded,
packers called for delivery as early as next week. Maybe packers need more
cattle than assumed? With their willingness to pay higher prices at the end of
the week and need of cattle delivered next week, it seems likely. October live
cattle are up $0.45 at $107.22, December live cattle are up $0.75 at $112.05
and February live cattle are up $0.55 at $116.32. It was surprising to see the
morning boxed beef prices higher as consumer demand continues to pressure the
Boxed beef prices are higher: choice up $0.57 ($215.62) and select up $0.60
($203.99) with a movement of 74 loads (48.27 loads of choice, 10.86 loads of
select, 5.06 loads of trim and 9.79 loads of ground beef).
Feeder cattle contracts jumped on the bandwagon; trading fully higher in
Friday's afternoon trade. September feeders are up $1.05 at $140.95, October
feeders are up $1.32 at $142.77 and November feeders are up $0.70 at $142.90.
Even though the corn market is seeing a two to three cent rally, the optimism
building in the cattle sector is outweighing the concern in the corn market.
The lean hog market would like to trade higher but is merely stuck trading
sideways as traders sway back and forth. October lean hogs are up $0.20 at
$66.72, December lean hogs are down $0.32 at $63.30 and February lean hogs are
down $0.05 at $68.15. As the complex keeps trading sideways, more resistance is
being built at the $68.00 threshold.
The projected lean hog index for 9/17/2020 is up $1.74 at $69.58 and the
actual index for 9/16/2020 is up $1.42 at $67.84. Hog prices are lower on the
National Direct Morning Hog Report, down $2.00 with a weighted average of
$60.61, ranging from $50.00 to $64.00 on 7,465 head with a five-day rolling
average of $58.36. Pork cutouts total 252.54 loads with 220.62 loads of pork
cuts and 31.91 loads of trim. Pork cutout values: up $1.16, $88.19.
ShayLe Stewart can be reached firstname.lastname@example.org
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