DTN Livestock Midday: Contracts Looking for Support

Photo: Kansas State University

Like the lean hog and feeder cattle, contracts trade higher, the live cattle market is hoping to muster up some support before the day is over.

General Comments

As Monday nears the noon hour, the lean hog market sees support rise from both the futures market and from midday cutout values while the cattle market trades mixed. Live cattle contracts are still trading fully lower but there’s mild support beginning to develop in the feeder cattle complex. March corn is down 4 1/4 cents per bushel and January soybean meal is down $3.50. The Dow Jones Industrial Average is down 356.70 points and NASDAQ is down 70.25 points.

LIVE CATTLE

Even with the bullish cattle on feed report, higher cash cattle trade last week and a supported futures market last week, Monday’s live cattle contracts aren’t feeling the same supported, joyful spirit. December live cattle are down $0.35 at $110.27, February live cattle are down $0.05 at $113.20 and April live cattle are down $0.05 at $116.90. Thankfully boxed beef prices are showing positive figures again and will hopefully continue to do so into the week. Feedlots have their eyes on higher trade again this week and could very easily get to stronger levels if the board starts to trade higher and if boxed beef prices can continue to secure profits.

Showlists this week are lighter in the Texas, but slightly larger in Kansas, Nebraska and Colorado.

Last week’s negotiated cash sales totaled 89,519 head. Given that it was a holiday, last week’s movement was rather impressive! Of the 89,519 head that sold, 61,625 head are committed for delivery in the next two weeks while the remaining 27,894 head are for delivery in the following 15 to 30 days.

Boxed beef prices are higher: choice up $1.17 ($244.02) and select up $1.48 ($222.16) with a movement of 45 loads (25.29 loads of choice, 6.61 loads of select, 8.31 loads of trim and 4.99 loads of ground beef).

FEEDER CATTLE

Throughout most of Monday’s morning trade, both cattle contracts were scaling lower but as the noon hour approaches the feeder cattle market has seen considerable support surface. January feeders are up $0.70 at $140.52, March feeders are up $0.50 at $139.50 and April feeders are up $0.40 at $140.72. The $140 threshold has been a short-term resistance level that nearby feeder cattle contracts are aiming to ahold of, and so long as Monday’s support can maintain the market may be able to close above that level in the spot January contract.

LEAN HOGS

Over the last month we have been talking about the need for pork cutout values to rally so that the hog market can scale out of its sideways wrap and Monday’s morning cutout values have surely helped the market do exactly that. With morning cutout values over $8.00 higher, the market has a considerable chance of close higher this afternoon and encouraging higher trade again Tuesday. December lean hogs are up $1.05 at $66.92, February lean hogs are up $1.02 at $68.27 and April lean hogs are up $0.77 at $71.15.

The projected lean hog index for 11/27/2020 is down $0.34 at $66.81 and the actual index for 11/25/2020 is down $0.23 at $67.15. Hog prices are lower on the National Direct Morning Hog Report, down $0.09 with a weighted average of $56.43, ranging from $50.00 to $57.50 on 6,610 head and a five-day rolling average of $57.02. Pork cutouts total 114.30 loads with 97.58 loads of pork cuts and 16.72 loads of trim. Pork cutout values: up $8.17, $88.13.

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