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DTN Midday Livestock Comments          07/16 12:08

   Taking All that's Available -- Livestock Contracts Leap Higher

   Thursday morning has been another good show for the bullish side of the 
market place as contracts rally strong into Thursday afternoon.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Livestock contracts jump into the afternoon relentless to weaken as all 
three markets see various contracts jump over $1.00, and some even $2.00 
higher. The morning's strong export report helped boost the market's morale and 
the underlying support and bullishness that's stemming from the countryside 
continues to fuel the momentum. December corn is up 4 1/2 cents per bushel and 
December soybean meal is up $2.10. The Dow Jones Industrial Average is down 
152.54 points and NASDAQ is down 142.52 points.

   LIVE CATTLE

   Live cattle contracts are on to higher prices as the feeder cattle complex 
paves a way for the live cattle contracts to follow. August live cattle are up 
$0.90 at $102.20, October live cattle are up $1.35 at $105.90 and December live 
cattle are up $1.37 at $109.55. Breaking out of the sideways trade is truly 
refreshing and now the industry patiently waits to see if the rally will hold 
strong through closing. Feeders are likely how the board is trading and are 
trying to get their full asking prices out of packers this week for the 
remaining cattle they'd like to sell. Bids of $157 are noticed throughout the 
countryside but hopes of $158 to $160 are still strong in the North. Packers 
are expected to inquire more on cattle throughout the day and could very likely 
up their bids.

   Thursday's export report shared that beef net sales of 27,800 mt were 
reported for 2020 which was up noticeably from the previous week and up 68% 
from the prior four-week average. The three primary increases were from South 
Korea (7,900 mt including decreases of 400 mt), Japan (6,300 mt including 
decreases of 400 mt) and Mexico (3,600 mt including decreases of 100 mt).

   Boxed beef prices are higher: choice up $0.37 ($201.13) and select up $0.05 
($191.42) with a movement of 92 loads (53.65 loads of choice, 17.83 loads of 
select, 5.65 loads of trim and 15.25 loads of ground beef).

   FEEDER CATTLE

   Feeder cattle contracts continue to spring forward as half of the complex 
trades over $2.00 higher. August feeders are up $2.37 at $141.80, September 
feeders are up $2.52 at $142.07 and October feeders are up $2.42 at $142.92. As 
the market rallies to prices not seen since early this spring, the industry is 
pushing this rally as feeder cattle prices rolled far stronger than assumed 
this spring/early summer. With Western Video Market's sale concluding this 
week, buying interest was evident especially on weaned calves and on programmed 
(NHTC or GAP) yearlings. As the week starts to near the finishing line, 
producers are anxious that the market can keep its strength not only through 
Thursday but through the end of the week.

   LEAN HOGS

   Lean hog contracts are surging higher in nearby contracts and are modestly 
rallying in deferred. August lean hogs are up $2.25 at $52.42, October lean 
hogs are up $1.65 at $51.07 and December lean hogs are up $1.22 at $52.22. 
Unfortunately, the cutout value gave up some of the headway Wednesday secured, 
but with strong export sales the market is rallying onward.

   Pork net sales of 38,500 mt were reported for 2020 which was up 22% from the 
previous week and up 16% from the prior four-week average. The three primary 
increases were from Mexico (10,100 mt including decreases of 400 mt), China 
(8,000 mt including decreases of 800 mt) and Canada (5,700 mt including 
decreases of 400 mt).

   The projected lean hog index for 7/15/2020 is up $0.39 at $47.49, and the 
actual index for 7/14/2020 is up $1.02 at $47.10. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.31 with a weighted average of 
$31.15, ranging from $30.00 to $31.32 on 3,326 head and a five-day rolling 
average of $30.33. Pork cutouts total 197.31 loads with 184.48 loads of pork 
cuts and 12.83 loads of trim. Pork cutout values: down $2.11, $66.84.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




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