DTN Midday Livestock Comments 01/20 12:06
Mixed Trade Continues throughout Livestock Contracts
It's another day of mixed trade as the feeder cattle and lean hog contracts
absorb the market's support but leave the live cattle contracts to wane lower.
DTN Livestock Analyst
The livestock contracts continue to trade split heading into Wednesday's
afternoon as the live cattle market is trading mostly lower but the lean hog
contracts have found the fundamental support needed to yield a higher trading
day. The cash cattle market is still quiet, but packer interest should improve
throughout the day. March corn is down 1 1/2 cents per bushel and March soybean
meal is down $5.40. The Dow Jones Industrial Average is up 210.75 points and
NASDAQ is up 230.49 points.
Other than in the spot February live cattle contract, losses are seen
throughout the live cattle complex as the deferred contracts are seeming to
adjust to lower price levels even though the market was hopeful that the in
time those higher price levels would be attainable. February live cattle are up
$0.40 at $113.75, April live cattle are down $0.27 at $119.07 and June live
cattle are down $0.60 at $116.12. The cash cattle market continues to be very
quiet though its likely that packer acquisition will improve later in the day.
Feedlots have a tough job ahead of them as packers will fight tooth and nail to
keep the cash market lower, but if the bulk of the week's trade can hold out
until later in the week then the market stands a chance to push prices $1.00
higher verses holding at steady. Helping add to feedlots ability to demand
higher prices is the strengthening boxed beef market.
The Fed Cattle Exchange Auction listed a total of 1,547 head, of which 567
actually sold, 980 head were listed as unsold, as they did not meet the reserve
prices, that ranged from $110 to $112. Opening prices ranged from $108 to $109,
high bids ranged from $110.50 to $111. The state by state breakdown looks like
this: Kansas 299 total head, all 299 head sold at $110.75 (grid based); Texas
1,248 total head, with 268 head sold at $110.50-$111.00 (live), 980 head went
Boxed beef prices are higher: choice up $0.91 ($218.40) and select up $0.50
($206.94) with a movement of 85 loads (55.73 loads of choice, 10.31 loads of
select, 10.37 loads of trim and 8.22 loads of ground beef).
The feeder cattle contracts continue to rally, adding to what Tuesday was
already able to secure and continuing to take advantage of the support the
market's offering while corn prices trade lower. January feeders are up $0.80
at $135.20, March feeders are up $1.07 at $137.87 and April feeders are up
$1.05 at $140.65. The market has plenty of upside potential, and so long as
support continues to encourage the market's trade, higher positioning can
easily be obtained.
Tuesday was a frustrating trade for the lean hog market but without
fundamental support the market was able to sustain at the levels it attempted
to trade at. Thankfully with Wednesday's arrive the cash market has traded
stronger and pork cutout values also show strong profits. February lean hogs
are up $1.20 at $67.67, April lean hogs are up $0.97 at $72.40 and June lean
hogs are up $0.72 at $83.72. In order for the lean hog market to really
capitalize on these fundamental strong points it will be important that the
fundamental factors continue to trade positively through the day's close.
The projected lean hog index for 1/19/2021 is up $0.02 at $65.67, and the
actual index for 1/18/2021 is up $0.12 at $65.65. Hog prices are higher on the
National Direct Morning Hog Report, up $1.67 with a weighted average of $56.64,
ranging from $50.00 to $58.50 on 7,160 head and a five-day rolling average of
$54.84. Pork cutouts total 225.02 loads with 196.55 loads of pork cuts and
28.47 loads of trim. Pork cutout values: up $4.33, $81.75.
ShayLe Stewart can be reached firstname.lastname@example.org
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