Livestock markets continue to scale lower and lower and in all three cattle charts it’s becoming more apparent that the wondered-about correction has arrived.
Remember the Johnny Cash song, Ring of Fire? Well today’s market (though it could be much worse) somewhat feels like that, “I went down, down, down, and the flames went higher, and it burns, burns, burns, the ring of fire, the ring of fire.”
October live cattle are down $2.62, December live cattle are down $1.65, November feeder cattle are down $2.50 and December lean hogs are down $1.40. Given the fact that none of the markets are limit down, we clearly know and understand that things could be worse and that this correction was anticipated.
BUT … it never is a rosy sight to see the markets bleeding lower on Friday when there still is a slug of fat cattle to sell and there was early morning confirmation of massive pork sales. December corn is down 3 1/2 cents per bushel and December soybean meal is up $2.00. The Dow Jones Industrial Average is down 206.62 points and NASDAQ is down 104.40 points
Live cattle contracts all showing significant losses Friday morning with the spot October contract showing the biggest loss, down $2.60 at $109.80 and December live cattle are down $1.62 at $112.72. As mentioned earlier, after getting used to higher and higher prices, a correction doesn’t ‘feel good’ and it’s chipping away at current prices stings.
However, it is positive to be getting this well-known and much-anticipated correction out of the way so that the market can establish a stable and steady position hopefully long before the upcoming 2020 calendar arrives.
A light trade is being reported in parts of the South at $108, steady to $1.00 lower than the bulk of last week’s trade. A few deals set for delayed delivery have been reported in Eastern Nebraska at $173 (set for the weeks of November 4 and November 11). Asking prices are around $112 in the South, and $178 to $180 in the North.
Midday boxed beef cutouts are mixed: choice down $0.23 ($217.88) and select up $1.51 ($194.11). Friday’s offering of boxed beef comes to 47 loads (22.82 lads of choice cuts, 14.17 loads of select cuts, no loads of trim and 10.38 loads of ground beef).
Feeder cattle markets have taken Friday’s slug the hardest. Feeder markets range anywhere from $1.45 to $2.42 lower. Sale barn markets as of Thursday have been able to rally higher prices and attract buyers to come bids on long runs of calves. Friday’s weakening board could begin to affect those prices though. November feeder cattle prices are down $2.27 at $142.05.
Unable to be inspired by the notice of higher net sales early Friday morning, which made a new marketing-year high, lean hog prices still trail downward. Increased purchases came from Mexico 132,400 metric tons, China 94,000mt, Japan 46,400mt, South Korea 9,900mt, and Canada 5,800mt.
The lean hog sector is down, but not nearly as much as the live cattle board and feeder cattle board. December lean hogs are down $1.37 at $66.77 and all other contracts range $0.05 to $1.02 lower except for February 2021, which is up $0.05.
The projected lean hog index for 10/16/19 is up $0.96 at $64.90, and the actual for 10/15/19 came to $63.94 up $1.02. Prices are down on the National Direct Morning Hog Report, down $0.75 with a weighted average of $57.05, ranging from $55.00 to $60.00 on 4,400 head sold and a five-day rolling average of $57.79.
Pork cutouts totaled 129.73 loads with 117.02 loads of pork cuts and 12.72 loads of trim. Pork cutouts values are up $0.16 at $76.44.