Feeder Cattle Contracts Paying Close Attention to Corn Prices
Cattle contracts are keeping with their upward trend hoping to regain ground lost from last week’s regression and keep rallying into the latter part of the week to encourage cash cattle prices.
The cattle contracts are soaking up this week’s support, rallying modestly in the live cattle market and upwards of $1.00 higher in the feeder cattle market. Meanwhile in the lean hog market the contracts keep stair-stepping lower as pressure around resistance levels encourages the market to trade lower. December corn is down 11 1/4 cents per bushel and December soybean meal is down $6.00. The Dow Jones Industrial Average is down 678.49 points and NASDAQ is down 316.80 points.
The live cattle market is liking the support that is largely stemming from the rally in the feeder cattle market and obvious support from traders that are willing to step back into the market again. December live cattle are up $0.62 at $104.67, February live cattle are up $0.47 at $107.47 and April live cattle are up $0.57 at $111.22. Wednesday’s usual cash cattle business didn’t go as planned as the Fed Cattle Exchange experienced some technical difficulties and was unable to host their weekly sale. Around midmorning some cash cattle bids did start to lightly develop.
There are some cattle bid on in Texas at $104 but asking prices are starkly higher at $108 in the South, and the North has yet to set their prices. Trade is more likely to see develop Thursday and Friday though there could be some mild developments throughout Wednesday afternoon.
Boxed beef prices are mixed: choice down $0.75 ($205.95) and select up $1.16 ($189.83) with a movement of 110 loads (65.52 loads of choice, 15.51 loads of select, 8.42 loads of trim and 20.71 loads of ground beef).
Feeder cattle contracts are bound and determined to make a comeback as the market’s successfully rallied three days in a row. Wednesday’s biggest support is coming from the corn markets hard sell off as December corn falls $0.11 lower per bushel, and March corn is down $0.10 per bushel. November feeders are up $1.37 at $133.67, January feeders are up $1.30 at $129.75 and March feeders are up $1.17 at $129.22. If the market can keep this forward momentum, and see some progress made in the live cattle market – buyers could be somewhat more willing to look at feeder cattle and calves selling this fall.
As the lean hog market scales lower; seeming at the time unwilling to surpass the market’s current resistance planes, traders look at the cattle contracts will more interest and leave the hogs to fall lower. December lean hogs are down $1.37 at $66.27, February lean hogs are down $1.92 at $66.12 and April lean hogs are down $1.77 at $68.60. Pork cutouts aren’t as hot Wednesday as they were earlier in the week, and with the cash markets lower midday prices, the market sits fully lower heading into Wednesday afternoon. As time passes and we begin to look to Thursday, the week’s export report has a way of gravely affecting the pork market. Hog producers obviously hope for a strong report to keep packers vigorously processing and to help move front end supplies.
The projected lean hog index for 10/26/2020 is down $0.70 at $77.47 and the actual index for 10/23/2020 is down $0.37 at $78.17. Hog prices are lower on the National Direct Morning Hog Report, down $1.12 with a weighted average of $61.44, ranging from $58.00 to $63.50 on 5,110 head and a five-day rolling average of $60.62. Pork cutouts total 226.60 loads with 203.84 loads of pork cuts and 22.76 loads of trim. Pork cutouts values: down $0.01, $88.82.