DTN Midday Livestock Comments 07/07 12:13
Livestock Contracts Lower Tuesday After Monday's Rally
Livestock contracts are taking a second to pause and determine if the recent
rally was where the market needs to go.
DTN Livestock Analyst
The optimism that circulated through livestock futures late last week and
Monday disappeared Tuesday as all the contracts are lower as we move into
Tuesday afternoon. As strange as it may be, going against all fundamentals, the
market seems to have some underlying support. Determining whether the market's
regression on Tuesday is a simply a chance to catch a break or is a pivotal
turning point back to lower trading ranges is yet to be solidified. December
corn is down 4 1/2 cents per bushel and December soybean meal is down $1.80.
The Dow Jones Industrial Average is down 210.80 points and Nasdaq is up 23.44
Live cattle futures are taking a minute to slightly regress and consider the
recent change in direction. August live cattle are down $0.27 at $99.82,
October live cattle are up $0.02 at $103.95 and December live cattle are down
$0.17 at $106.87. Seeing where Tuesday's boxed beef movement ends up will be
interesting as the midday report only showed a small 55 load count. At midday,
cash cattle trade is mostly quiet but one regional came into Nebraska and
bought cattle for $157, $3.00 higher than last week's weighted average. Trade
has been mostly quiet for the week without a trend.
Boxed beef prices are higher: choice up $0.58 ($206.04) and select up $0.89
($197.86) with a movement of 55 loads (27.74 loads of choice, 13.58 loads of
select, 5.75 lads of trim and 7.98 loads of ground beef).
Feeder cattle sales were sparse Monday afternoon as several sale barns took
the day off. The feeder cattle complex contemplated for a long time whether
contracts should follow the live cattle momentum; after enough time and
pressure to do so, the feeder complex did follow suit. But just as the live
cattle contracts started to weaken, the feeder cattle contracts were quick to
rethink. Nearby contracts are taking the biggest step backwards while deferred
contracts are only trading slightly lower. August feeder cattle are down $1.05
at $135.07, September feeders are down $0.80 at $136.42 and October feeders are
down $0.47 at $137.37.
The hog complex isn't supporting Monday rallying except for in the August
and October contracts, which is largely traders moving their positions before
the July contract expires. July lean hogs are down $0.20 at $44.75, August lean
hogs are steady at $49.27 and October lean hogs are up $0.12 at $49.17. The
glut of hogs that still needs to be processed is burdensome on nearby contracts
but looking past 2020 (let's hope this year's madness ends there) prices are
far more optimistic, trading anywhere from $60.50 to $76.77 in 2021.
The projected lean hog index for 7/2/2020 is up $0.64 at $45.66 and the
actual index for 7/1/2020 is down $0.26 at $45.02. Hog prices are higher on the
National Direct Morning Hog Report, up $0.59 with a weighted average of $29.11,
ranging from $24.00 to $30.19 on 5,310 head and a 5-day rolling average of
$28.86. Pork cutouts total 210.23 loads with 189.88 loads of pork cuts and
20.35 loads of trim. Pork cutout values: up $1.14, $65.48.
ShayLe Stewart can be reached firstname.lastname@example.org
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