DTN Livestock Midday: Securing Profits Monday Morning

    Photo: Kansas State University

    There was some concern that Monday could have been pressured to trade lower, but thus far the livestock contracts are faring well and managing to secure higher prices.

    General Comments

    The livestock complex is rolling into Monday’s trade far more optimistic than many anticipated. The bearish resistance that loomed over the nearby contracts in the live cattle, feeder cattle and lean hog markets has dissipated and is now allowing for the markets to trade mostly higher which continues to reignite the supportive nature that building in the entire livestock complex. March corn is up 14 1/2 cents per bushel and March soybean meal is up $11.50. The Dow Jones Industrial Average is down 207.33 points and NASDAQ is down 34.14 points.

    LIVE CATTLE

    After last week’s somewhat disappointing cash cattle trade, opportunity lingers for this week’s cash cattle trade. As packers continue to reap the benefits of a strong boxed beef market, feedlots should be keenly aware that they have an opportunity to price their cattle higher and should be willing to wait until later in the week if need be.

    The live cattle contracts are back to securing higher prices Monday morning as the complex continues to be supported even after a bearish Cattle on Feed Report from Friday. February live cattle are down $0.07 at $116.65, April live cattle are up $0.50 at $123.02 and June live cattle are up $0.22 at $119.02. Showlists this week are larger in Texas but lighter in Kansas, Nebraska and Colorado.

    Last week’s negotiated cash cattle trade totaled 88,895 head. Of that 64,836 head are committed for delivery in the next two weeks while the remaining 24,059 head are scheduled for delivery in the following 15 to 30 days.

    Boxed beef prices are higher: choice up $2.96 ($225.78) and select up $2.03 ($215.37) with a movement of 46 loads (25.14 loads of choice, 10.46 loads of select, 4.81 loads of trim and 5.56 loads of ground beef).

    FEEDER CATTLE

    A modest Monday morning rally will gladly be taken seeing that the feeder cattle complex was somewhat worried about what Monday’s trade will pan out to be. With corn prices back on the gain, the feeder cattle contracts don’t seem overly concerned as the support that’s built the complex higher over the last 10 days remains strong from both technical and fundamental indicators. Now if the corn market regains a substantial footing the contracts may begin to be pressured but at this point the contracts seems unscathed. March feeders are up $0.17 at $144.32, April feeders are up $0.37 at $146.50 and May feeders are up $0.57 at $147.60.

    LEAN HOGS

    The lean hog contracts weren’t lackadaisical last Friday and made sure to close sharply higher along with the cattle contracts. Upon Monday’s arrival, the lean hog contracts have had no problem continuing a modest rally and will most likely be able to do so as resistance thresholds aren’t a looming concern at the time being. Pork cutout values are down slightly but the cash market continues to show support for the contracts upward progression and continue to show that packers are interested in keeping vigorous their slaughter speed elevated.

    The projected lean hog index for 1/22/2021 is up $0.33 at $65.88 and the actual index for 1/21/2021 is up $0.15 at $65.55. Hog prices are higher on the National Direct Morning Hog Report, up $0.16 with a weighted average of $55.72, ranging from $48.00 to $55.95 on 3,448 head and a five-day rolling average of $55.59. Pork cutouts total 174.94 loads with 157.83 loads of pork cuts and 17.11 loads of trim. Pork cutout values: down $0.37, $82.46.

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