DTN Livestock Midday: Contracts Heading Higher

Photo: Texas AgriLife Extension

The live cattle and lean hog contracts were willing to trade higher from the morning’s initial bell, but the feeder cattle complex took some time.

General Comments

Monday’s encouragement is starting to trickle into all three of the livestock sectors as even the feeder cattle contracts are starting to show some stronger support. Meanwhile the live cattle and lean contracts trade steadily higher without any wavering support. Cash cattle trade is idle thus far though Northern feedlots have already set their asking prices for the week. December corn is up 1 3/4 cents per bushel and December soybean meal is up $4.10. The Dow Jones Industrial Average is up 265.98 points and NASDAQ is down 81.48 points.

LIVE CATTLE

A positive trade throughout Monday morning has put a positive spin on the live cattle contracts. August live cattle are up $0.87 at $103.67, October live cattle are up $0.82 at $107.30 and December live cattle are up $0.85 at $110.92. The Northern Plains have set this week’s asking prices at $107 live, and $168 dressed while asking prices have yet to be set in the South.

Packers have inquired on cattle throughout much of the five-area feeding region, but bids have yet to hit the table. Feeders are anxious to see where bids are going to land this week after last week’s strong cash cattle trade and with showlists lower this week feeders have another opportunity to move cattle for more money again. Showlists appear to be somewhat lower in Kansas, lower in Nebraska/Colorado and sharply lower in Texas.

Last week’s negotiated purchases totaled 100,601 head. Of that 87,039 are committed for delivery in the next two weeks while the remaining 13,562 head are for delivery in the following 15 to 30 days.

Boxed beef prices are higher: choice up $1.46 ($206.93) and select up $1.12 ($193.87) with a movement of 57 loads (32.91 loads of choice, 9.90 loads of select, 6.75 loads of trim and 7.06 loads of ground beef).

FEEDER CATTLE

Feeder cattle contracts were leery of trading higher after falling below the $143.85 resistance plane last week but upon seeing the live cattle and lean hog complexes trade higher, midday morning the feeder cattle contracts started to see some support. August feeders are up $0.50 at $143.22, September feeders are up $0.02 at $145.15 and October feeders are down $0.10 at $146.30. How the feeder cattle contracts trade this week will be interesting. There could be pressure for the market to trade higher if cash cattle prices scale higher and if feeder cattle prices continue to sell steady to even stronger. But the fundamental pressure cautioning traders as the market has rallied significantly over the last month carries clout as well.

LEAN HOGS

Last week’s burst of optimism throughout the later part of the week has successfully continued into Monday’s trade as lean hog contracts are trading $0.27 to $3.10 stronger. Deferred contracts have been trading upwards of $25 stronger than the nearby lean hog contracts so Monday’s boost in nearby support comes as an encouraging change to hog producers. August lean hogs are up $2.05 at $53.05, October lean hogs are up $3.02 at $54.00 and December lean hogs are up $1.95 at $54.87. With pork cutout values stronger, and midday cash hog prices higher, if the afternoon can close higher and keep the other markets elevated, Tuesday is going to be in a fine position.

The projected lean hog index for 8/7/2020 is up $0.58 at $53.02 and the actual index for 8/6/2020 is down $0.34 at $52.44. Hog prices are higher on the National Direct Morning Hog Report, up $0.54 with a weighted average of $38.73, ranging from $37.00 to $38.81 on 4,150 head and a five-day rolling average of $38.86. Pork cutouts total 197.24 loads with 179.83 loads of pork cuts and 17.41 loads of trim. Pork cutout values: up $3.52, $75.45.

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