Tuesday morning opened an unexpected mixed market with both live cattle and feeder seeing gains in nearby and deferred contracts, whereas corn and lean hog contracts suffer. Cattle contracts could have been supported by the strength in the midday boxed beef cutout values and dwindling corn prices.
A positive board for cattle contracts early in the week could be a strong indication as to where the week could go if support remains and cash trade follows suit. The complex will have a lot of pressure to navigate through with the COF report coming out Friday, and large runs of cattle beginning to hit the scales at sale barns for the early fall sales.
December corn is down 5 3/4 cents, at $3.6825. The Dow Jones is down 50.14 points, and the NASDAQ is down 0.46 points.
Tuesday’s midday market shows intention of making gains, and hopefully keeping them! Tuesday live cattle opened at $98.200, and have etched upwards to $99.525, a $1.525 gain. Nearby and deferred contracts all have gains at midday, with the strongest gain being seen in February 2020.
If Tuesday’s market keeps its gains through closing, this could be a signal to the cash market to take $1-$2. As of midday, no bids or cash trades have been established. With a strengthening board, packers will be leery whether or not the gains will stick, and feedlots will want to see just how far this rally could go before they bid their cattle.
Wednesday’s Fed Cattle Exchange currently has 1,229 head of cattle consigned to the sale, with a healthy mix of both steers and heifers, ranging anywhere from one-to-nine-day-delivery, or one-to-17-day-delivery periods, and an average weight of 1,252 pounds.
Estimates for September’s Cattle on Feed report have come out with cattle on feed expected at 99.0%, placements at 92.0%, and marketing at 98.1%. With COF placement numbers lower, some are expecting a bullish market outcome.
Boxed beef cutouts at midday are higher with choice up $1.39 ($222.01) and select up $0.42 ($196.99). Tuesday’s offering of boxed beef movement is just slightly lower that Monday’s midday offering 58 total loads versus Monday’s 60 loads. Tuesday’s 58 total loads comprised 25.75 loads of choice, 14.03 loads of select, 9.14 loads of trimmings and 9.13 loads of ground beef.
October feeder cattle are on a roll Tuesday morning seeing seeking greater gains than the live cattle contracts. The October feeder cattle contract opened Tuesday morning at $134.100, and has since then jumped to $138.525, taking a $4.325 gain. Whether this rally is in conjunction with the live cattle contract, or because corn prices have been hit hard, feeders will gladly take the gain regardless!
The Tuesday lean hog market opened at $70.450, and has since then dropped to $67.878, a $2.800 change. Nearby and deferred contracts have followed suit this morning, and there’s no indication that there will be a strong close for Tuesday’s ending if cattle markets continue to surge, and corn prices stay down.
The projected lean hog index for 9/16/19 is $57.49, down $0.99, and the actual price for 9/13/19 came to $58.48, down $1.23. Prices are down again Tuesday on the National Direct Morning Hog Report, down $0.83, at a weighted average of $44.26, ranging from $43.50 to $46.00, on 4,600 head sold, and with a five-day rolling average of $45.93.
Pork cutouts came to 248.76 loads, with 229.65 loads of pork cuts, and 19.10 loads of trimmings. Pork cutout values came in $0.69 higher at $69.35.