DTN Livestock Midday: Lean Hog Contracts Higher

A Criollo steer on the USDA-ARS, Jornada Experimental Range in southern New Mexico. Photo: Texas AgriLife Extension

Lean Hog Contracts Hail Higher While Cattle Trade Mixed

The lean hog complex isn’t wasting the day but the cattle contracts, on the other hand, trade lower in the live cattle complex and mixed in the feeder cattle market.

General Comments

Some livestock contracts are taking another swing at the market before the week closes and heads into the weekend. Feeder cattle and lean hog contracts are taking advantage of the momentum while the live cattle contracts are hesitant. December corn is down 3 cents per bushel and December soybean meal is down $1.10. The Dow Jones Industrial Average is down 40.37 points and NASDAQ is down 39.31 points.

LIVE CATTLE

Live cattle contracts aren’t seeing the same support and momentum as the other livestock contracts are heading into Friday afternoon. August live cattle are up $0.40 at $103.02, October live cattle are down $0.20 at $106.75 and December live cattle are down $0.55 at $110.40. Cash cattle trade has been mostly quiet as packers and feeders play tug-of-war with this week’s prices in the North. There’s been light inquiry on cattle all throughout the day and some cattle sold in Colorado for $103, and in Iowa for $164 dressed and $103 live. It wouldn’t be surprising to see more trade develop through the afternoon in the Northern Plains.

Boxed beef prices are higher: choice up $0.33 ($204.99) and select up $0.78 ($192.79) with a movement of 62 loads (32.92 loads of choice, 8.93 loads of select, 8.53 loads of trim and 11.31 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts are enjoying the modest gains in deferred contracts, but the weakness in nearby contracts is disappointing. Last Friday, nearby contracts shot through resistance at $143.85 and cattle enthusiasts prayed that the market would be able to keep prices elevated beyond that threshold as sales throughout the countryside continue to move higher. As this week progressed, a toppy chart started to form and with Thursday’s lower close, prices once again sank below the resistance plane. Friday’s trade has pushed nearby contracts lower and regardless of the phenomenal strength throughout the country, the nearby contracts keeping trading lower. August feeder cattle are down $0.62 at $142.85, September feeder cattle are down $0.32 at $145.55 and October feeder cattle are down $0.07 at $146.70.

LEAN HOGS

Lean hog contracts are firing higher heading into Friday afternoon as support from pork cutouts is strengthening the market along with the hope that the government aid package may have specific subsidies for hog producers who are battling hardship because of the backlog. Seeing nearby contracts jump above the $50.00 threshold is exhilarating for the market as contracts have simply been unable to break free from the resistance. August lean hogs are up $1.37 at $51.12, October lean hogs are up $2.20 at $51.40 and December lean hogs are up $1.57 at 53.07. Producers will be watching the board meticulously throughout the afternoon hoping that the support can carry into the day’s close and potentially spur the market higher early next week.

The projected lean hogs index for 8/6/2020 is down $0.34 at $52.44 and the actual index for 8/5/2020 is down $0.14 at $52.78. Hog prices are higher on the National Direct Morning Hog Report, up $0.33 with a weighted average of $38.27, ranging from $35.00 to $38.61 on 3.792 head and a five-day rolling average of $39.28. Pork cutouts total 193.67 loads with 163.78 loads of pork cuts and 29.89 loads of trim. Pork cutout values: up $3.04, $73.84.

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