The Lean Hog Market Pulls Wednesday’s Attention
With corn prices jumping significantly higher, cattle contracts have regressed heading into Wednesday afternoon trade.
Cattle contracts were trading modestly higher Wednesday morning but as the noon hour approached both the live and feeder cattle contracts have taken a turn for lower prices and in an abrupt manner as the feeder cattle market sees as much as a $2.30 loss. With the announcement of Germany finding more wild boars carrying ASF and corn prices jumping as much as $0.16 to $0.17 per bushel, the attention has left the cattle complex and is focusing on lean hogs and corn. December corn is up 16 cents per bushel and December soybean meal is up $13.30. The Dow Jones Industrial Average is up 502.96 points and NASDAQ is up 176.29 points.
The market’s attention for the cattle contracts has disappeared as there’s more concern about the ASF cases in Germany and feeders want to get an understanding of the corn market’s rally. Meanwhile live cattle contracts are trading lower but not as steeply as the feeder cattle complex. October live cattle are down $0.32 at $108.70, December live cattle are down $0.42 at $112.72 and February live cattle are down $0.35 at $115.87. Cash cattle trade remains at an utter standstill even after the day’s online auction. Some early asking prices are noted in the South at $109, and bids of $167 are offered in Iowa but trade has yet to develop.
The Fed Cattle Exchange Auction listed a total of 901 head, of which 358 actually sold, but 543 head were listed as PO (Passed Offer). The state by state breakdown looks like this: Kansas 142 total head (1 lot), with 142 head listed as PO ($104.00); Nebraska 214 total head (1 lot), with 214 head sold at $106.00; Texas 545 total head (3 lots), with 144 head sold at $106.00, and 401 head listed as PO ($104.00). The delivery date/weighted averages breakdown is as listed: 1-9-day delivery: 543 head total, all passed, and 1-17-day delivery 358 head total all sold at $106.00.
Boxed beef prices are higher: choice up $1.48 ($218.64) and select up $0.94 ($207.93) with a movement of 97 loads (59.57 loads of choice, 15.60 loads of select, 6.88 loads of trim and 15.12 loads of ground beef).
Feeder cattle contracts are taking the brunt of Wednesday’s blow, seeing as much as $2.22 losses as the complex barley broke above the $144 resistance plane before shooting lower. October feeder cattle are down $1.50 at $141.37, November feeder cattle are down $2.10 at $141.67 and January feeders are down $1.95 at $139. Pressuring the feeder cattle complex tremendously is the corn market’s rally as corn prices are jumping up as much as $0.15 to $0.16 per bushel.
Just when the market wondered if the hype surrounding the ASF cases in Germany was dying down, news broke Wednesday morning that two additional wild boars were found positive with the disease. Upon hearing the news, the hope of export opportunity is helping boost the lean hog market. October lean hogs are up $0.12 at $72.50, December lean hogs are up $1.37 at $63.35 and February lean hogs are up $1.32 at $68.32.
The projected lean hog index for 9/29/2020 is up $0.63 at $76.54 and the actual index for 9/28/2020 is up $0.49 at $75.91. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.02 with a weighted average of $63.90, ranging from $60.00 to $66.00 on 5,815 head and a five-day rolling average of $64.31. Pork cutouts total 190.09 loads with 167.25 loads of pork cuts and 22.84 loads of trim. Pork cutout values: down $0.55, $91.20.