DTN Midday Livestock Comments 12/02 12:22
Cattle Contracts Gaining Support into the Afternoon
Early Wednesday morning it wasn't clear how the market was going to trade as
traders were slow to invest, but as the day has progressed traders are showing
support again for the cattle contracts.
DTN Livestock Analyst
Early Wednesday morning the livestock complex wasn't sure which way the
day's chips were going to fall. At times all three contracts were trading lower
but as the day moved closer and closer to the noon hour more support has
solidified in the cattle contracts, helping move the markets to a slightly
higher position. There is some cash cattle trade starting to develop in parts
of Texas but so far, it's been a small enough scale and trade is still expected
to wait until later in the week. March corn is up 2 cents per bushel and
January soybean meal is down $1.90. The Dow Jones Industrial Average is down
27.42 points and NASDAQ is down 20.48 points.
As the noon hour approaches, the live cattle market is seeing more and more
support develop throughout the contracts while is perfect timing as cash cattle
trade is starting to draw some packer interest. December live cattle are down
$0.05 at $110.57, February live cattle are up $0.40 at $113.60 and April live
cattle are up $0.30 at $117.10. With boxed beef prices starting to top,
feedlots need the board to support a higher cash cattle trade in order to
easily get this week's market moved higher. There's been some light trade
reported in parts of Texas at $110 to $112, which is mostly steady with last
week's trade. Asking prices are around $112 to $113 in the South and $175 in
The Fed Cattle Exchange Auction listed a total of 1,025 head, of which 488
actually sold, 393 head were listed as unsold, and 144 head were listed as PO
(Passed Offer). The state by state breakdown looks like this: Texas 779 total
head, with 488 head sold at $110.50-$110.75, 147 head unsold, 144 head listed
as PO ($110.50); Nebraska 246 total head, no of which none sold. The delivery
date/weighted averages breakdown is as listed: 1-9 day delivery: 488 head
total, 197 head sold, with a weighted average price of $110.75; 1-17 day
delivery 537 head total, 291 head sold, with a weighted average price of
Boxed beef prices are mixed: choice down $1.70 ($241.70) and select up $1.13
($224.21) with movement of 75 loads (48.01 loads of choice, 8.22 loads of
select, 6.86 loads of trim and 12.15 loads of ground beef).
The fact that traders had cold feed early Wednesday morning and that the
fact that the corn market is seeing a slight rally isn't bothering the feeder
cattle market one bit. January feeders are up $0.22 at $141.87, March feeders
are up $0.40 at $141.05 and April feeders are up $0.27 at $142.15. It seems
like the market will have successful day as the support around the noon hour is
building, it will just be important to monitor how the contracts react to the
market's looming resistance levels.
The lean hog market is being pressured to trade lower again Wednesday
morning and so far contracts haven't tried fighting the market's downward
notion. December lean hogs are down $0.60 at $66.37, February lean hogs are
down $0.72 at $68.02 and April lean hogs are down $0.40 at $70.97. Again,
looking at the pork cutout value its easy to get excited about seeing a
positive figure but until there's followed through support, a day higher
following by two to three days of lower trade doesn't amount to much.
The projected lean hog index for 12/01/2020 is up $0.04 at $66.71 and the
actual index for 11/30/2020 is down $0.14 at $66.67. Hog prices are lower on
the National Direct Morning Hog Report, down $0.34 with a weighted average of
$56.42, ranging from $50.00 to $58.50 on 5,327 head and a five-day rolling
average of $56.46. Pork cutouts total 187.74 loads with 159.70 loads of pork
cuts and 28.04 loads of trim. Pork cutout values: up $4.08, $81.16.
ShayLe Stewart can be reached email@example.com
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