DTN Livestock Midday: Slow Start to New Week

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All three livestock contracts trade lower Monday morning as the markets seem lethargic and exhausted.

General Comments

Seeming to be not yet ready for Monday, feeder cattle and lean hog markets tumble with losses greater than a dollar, and the live cattle contracts aren’t in much better shape, but are keeping their losses between $0.20 to $0.72. With the board seeming to be in an idle, stagnant place, the cash markets may be the biggest pulls this week — or potentially the signing of the phase one trade agreement.

March corn is up 3 cents per bushel and March soybean meal is down $0.50. The Dow Jones Industrial Average is up 74.91 points and NASDAQ is up 69.32 points.

LIVE CATTLE

Putting your finger on the indicating factor as to why all three livestock markets are trading lower isn’t as easy task, but for the cattle contracts it would be a lie to say that steady fat cattle prices last week; instead of higher prices, isn’t playing some effect. February feeders are down $0.87 at $126.55, April live cattle are down $0.65 at $127.30 and June live cattle are down $0.45 at $119.32.

Psychology pays a tremendous role in both the future’s markets and cash markets. And knowing that fat cattle traded for mostly steady prices last week, pulls on those psychology stings and charges some panic into feeders. But knowing that current readily-available fat cattle supplies are tight helps level the playing field and puts everything back into perspective.

Formula totals for last week were mixed, higher in Kansas and Texas, but lower in Nebraska: Kansas 100,004(up 21,258), Nebraska 52,302(down 725), Texas 78,642(up 5,784). Total trade volume was also mixed, higher in the South and lower in Nebraska: Kanas 115,093(up 17,378), Nebraska 71,182 (down 11,674), Texas 82,545 (up 9,687). New show lists appear to be higher in Texas and Nebraska/Colorado, but lower in Kansas

Boxed Beef prices are mixed: choice down $0.13 ($209.91) and select up $1.12 ($207.67) with a movement of 51 loads (28.05 loads of choice, 5.14 loads of select, 0 loads of trim and 18.07 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are trading $0.85 to $1.65 lower, with nearby contracts taking Monday the hardest. This doesn’t seem to be a market wide trend as last week’s feeder cattle prices were call steady to instances of $10.00 higher on lighter weight calves. January feeder cattle are down $1.67 at $145.92, March feeders are down $1.60 at $145.82 and April feeders are down $1.35 at $148.70.

LEAN HOGS

Pressure. The lean hog market continues to dip lower as pressure builds. The market in a matter of nearly 10 days has whittled away the gains produced from late November until early January.

It wouldn’t be surprising to see the market sit back and trading steadily lower until some announcement about the phase one trade agreement is made. February lean hogs are down $1.65 at $65.60, April lean hogs are down $1.27 at $72.85 and May lean hogs are down $1.32 at $79.40.

The projected lean hog index for 1/10/2020 is down $0.37 at $58.99, and the actual index for 1/9/2020 was reported at $59.36, down $0.20. Hog prices are lower on the National Direct Morning Hog Report, down $0.23 with a weighted average of $50.19, ranging from $48.00 to $51.01 on 5,122 head sold and a five-day rolling average of $50.41.

Pork cutouts total 156.32 loads with 133.77 loads of pork cuts and 22.55 loads of trim. Pork cutout values: up $2.00, $74.50.

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