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.
DTN Livestock Analyst
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 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 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 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 firstname.lastname@example.org
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