DTN Livestock Midday: Wavering Trade Agreements, But Still Pressing On

Although most of the marketplace was somewhat disappointed in the China-U.S. trade dealings, livestock markets have seized higher prices Monday morning.

General Comments

“Good morning, Monday,” livestock markets shouted as Monday morning has opened to a surprisingly eager and optimistic livestock complex. Spurred by the excitement generated in the late cash cattle trade, markets have performed well for a Monday morning, especially considering that many Wall Street firms found the trade conversations with China somewhat disappointing.

December corn is down 1 1/4 cents per bushel and December soybean meal is up $0.10. The Dow Jones Industrial Average is up 17.06 points and NASDAQ is down 2.47 points.

LIVE CATTLE

Live cattle markets are posting gains early Monday as markets are still fueled by higher cash cattle prices last week. Last week, cash cattle prices saw a $3.13 jump in prices in the five-area feeding region; and all in all, the cash market has rallied a substantial $12 since the Tyson fire and it looks like pressure will continue early this week.

Packers will have to continue to partake in the negotiated market as they need cattle and are keeping processing plants plenty busy. Prices will likely dip down and cool off a bit sometime in November as Thanksgiving and Christmas holidays don’t center around beef dishes and are obviously days that the futures market is closed. December live cattle are up $1.22 at $113.37, and all live cattle contracts are showing support of $0.67 to $1.17 gains.

Midday boxed beef prices are up: choice up $0.03 ($215.69) and select up $0.05 (188.73). Monday’s offering of boxed beef movement totaled 40 loads (19.06 loads of choice cuts, 8.96 loads of select cuts, 5.04 loads of trim and 7.28 loads of ground beef).

Formula totals for last week were mixed, higher in Nebraska and lower in Kansas and Texas: Kansas 76,766(down 4,641), Nebraska 60,587(up 6,540), Texas 95,329(down 2,284). Total trade volume was also mixed higher in Nebraska and lower in the South: Kansas 87,523(down 5,784), Nebraska 90,864(up 4,965), Texas 100,913(down 4,244).

New showlists appear to also be mixed, slightly higher in Nebraska/Colorado, somewhat smaller in Kansas, and lower in Texas. A few early asking prices have been noted in parts of Nebraska at $115 live and $180 dressed.

FEEDER CATTLE

Countryside feeder cattle markets could be in for a volatile whirlwind this week. First, the sheer amount of snow that accumulated in North Dakota and other parts of the northern region brings great stress to cow/calf producers and their cattle. Even with proper preconditioning shots and vaccinations, calves endure a lot of stress the first initial weeks after being weaned and when hit with a snow storm, sickness is the next thing that managers have on their mind.

Secondly, transportation of these newly weaned calves could be an issue as many of the northern raised calves are trucked down the Corn Belt, and even getting calves shipped to local sale barns can be challenging when dealing with slick, icy roads, or mud. Nevertheless, feeder cattle markets are expecting big runs this week, and health, quality and pre-weaning shots will short the calves hard this week on price.

Despite the nasty weather and potential shipping complications, the board is in support for higher cattle markets early this week. Spot October live cattle futures are up $1.30 at $145.40 and November feeder cattle are up $1.65 at $145.90.

LEAN HOGS

Friday’s chatter surrounding the Chinese trade agreement left the market hopeful but as more time has passed, more questions seem to be unanswered. We know that some progress has been made, but there is still plenty of time for things to go astray, which is exactly what hog producers fear with their growing numbers and vast supply of market-ready hogs.

Thankfully, the fact remains than China and surrounding countries will need a large supply of pork imported to offset the loss of their herds. United States hog producers pray that those imports can be largely from them. December lean hogs are down $0.65 at $68.97 but most of the lean hog market is finding moderate support in other contracts.

The projected lean hog index for 10/11/19 is up $0.93 at $62.11, and the actual lean hog index for 10/10/19 came to $61.18 up $0.53. Prices are unchanged on the National Direct Morning Hog Report with a weighted average price of $56.61 ranging from $50.00 to $60.00 on 8,016 head sold, and a five-day rolling average of $54.25.

Pork cutouts totaled 119.97 loads with 103.81 loads of pork cuts and 16.17 loads of trim. Pork cutouts values are $0.91 higher at $78.43.

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