DTN Midday Livestock Comments 07/01 12:09
Live Cattle Contracts in Denial & Feeder Cattle Contracts Depressed
The livestock contracts trade mixed into Wednesday noon hour as the
different markets react differently to the challenges the industry is facing.
DTN Livestock Analyst
Midday live cattle contracts are trading mildly higher with the rest of the
livestock complex trades lower. Cash trade has treated the lean hog market
kindly as for a second day in row cash hogs are trading higher, but
unfortunately the cash cattle market isn't celebrating the same news as prices
continue to erode. September corn is up 8 1/4 cents per bushel and December
soybean meal is up $8.50. The Dow Jones Industrial Average is up 62.09 points
and NASDAQ is up 88.16 points.
Understanding the live cattle market when fundamentally understanding the
challenges the industry is up against is truly baffling. Last week's data
shared that carcass weights are 47 pounds over a year ago levels for steers,
and 37 pounds over a year ago for heifers; we know that the back log of cattle
still has to be processed through and concerns about beef demand through the
third quarter are heightened - all of which should be bearish sediments but yet
the board scales modestly higher. August live cattle are up $0.47 at $96.75,
October live cattle are up $0.37 at $100.10 and December live cattle are up
$0.12 at $103.77. Cash cattle trade has developed modestly throughout the
countryside with Southern cattle selling for $95 live ($1.00 lower than last
week) and northern cattle selling dressed for $153 to $155, which is mostly
steady for the week. Asking prices remain firm at $98-plus in the South and
$158 in the North for dressed cattle.
The Fed Cattle Exchange Auction listed a total of 1,814 head, with 144
actually sold, 1,352 head listed as unsold, and 318 head listed as PO (Passed
Offer). The state by state breakdown looks like this: Kansas 1,155 total head,
with 144 head sold at $95.00, 693 head unsold, 318 head listed as PO ($93.00);
Nebraska 194 total head, with no cattle sold; Texas 465 total head, with no
cattle sold. The delivery date/weighted averages breakdown is as listed: 1-9
day delivery: 768 head total, 144 head sold, with a weighted average price of
$95.00; 1-17 day delivery 1,046 head total, with no sales.
Boxed beef prices are lower: choice down $1.38 ($205.59) and select down
$0.44 ($199.46) with a movement of 115 loads (73.94 loads of choice cuts, 15.30
loads of select, 5.82 loads of trim and 19.65 loads of ground beef).
Feeder cattle contracts are truly unimpressed with every notion that
Wednesday has offered and insist on trading lower after seeing corn prices
trading higher. Feeder cattle contracts are playing the field on a safer note
when compared to the live cattle contracts as the industry isn't past the back
log of cattle and cash cattle prices are going to only continue to erode
through the summer. August feeders are down $1.37 at $131.47, September feeders
are down $1.02 at $132.35 and October feeders are down $0.97 at $133.12.
The lean hog complex has trades disappointingly Wednesday morning as the
board tips lower while cash prices hit the midday report strong and cutout
values post midday gains of over $1.00 stronger. July lean hogs are down $0.20
at $44.97, August lean hogs are up $0.40 at $49.42 and October lean hogs are
down $1.05 at 48.35. Interest in pretty slim and given that the Thursday is the
last trading day for this holiday shortened week, the complex may simply not
have enough trade support and interest to rally.
The projected lean hog index for 6/30/2020 is up $0.03 at $45.27, and the
actual index for 6/29/2020 is up $0.01 at $45.24. Hog prices are higher on the
National Direct Morning Hog Report, up $0.23 with a weighted average of $28.69,
ranging from $24.00 to $30.13 on 5,095 head and a five-day rolling average of
$28.64. Pork cutouts total 230.63 loads with 204.33 loads of pork cuts and
26.30 loads of trim. Pork cutout values: up $1.18, $64.30.
ShayLe Stewart can be reached firstname.lastname@example.org
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