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DTN Midday Livestock Comments          10/19 12:13

   New Cattle Limits Wreak Havoc

   Monday roared into the cattle market pushing the feeder cattle market to the 
industry's new limits and letting the live cattle market fall incrementally 

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   It's about as ugly as a Monday can get for the cattle contracts as the 
industry feels the full effect of the market's new limits. Live cattle are 
$2.00 to $3.00 lower, while feeder cattle range anywhere from $3.00 to $5.00 
lower as the market sells out. The lean hog market is feeling Monday's pressure 
as both the board and cash hog markets trade lower, but thus far isn't 
manageable compared to the cattle market's drastic dive lower. December corn is 
up 3 cents per bushel and December soybean meal is up $7.70. The Dow Jones 
Industrial Average is down 95.57 points and NASDAQ is down 41.80 points.


   The cattle market's psychology is taking a hit Monday morning as both live 
cattle and feeder cattle futures dive lower and feedlot's resiliency is 
compromised as some Texas cattle sell already in the week for $106. Rallying 
corn prices and bottom that seems limitless at the time in the futures market 
has pressured Monday's market more than any anticipated.  October live cattle 
are down $2.55 at $104.57, December live cattle are down $3.05 at $105.57 and 
February live cattle are down $3.07 at $108.40. This week's showlists appear to 
be mixed, larger in Kansas and somewhat smaller in Texas and Nebraska/Colorado. 
Heading into the afternoon and rest of the week, getting a grasp on the 
morning's damage is vital as analysts and producers wonder if the downward 
momentum is done for or it more is to be seen.

   Last week's negotiated sales totaled 111,123 head. Of that, 73,440 head are 
committed for delivery in the next two weeks while the remaining 37,684 head 
are for delivery in the following 15 to 30 days.

   Boxed beef prices are lower: choice down $0.17 ($209.86) and select down 
$1.05 ($192.47) with a movement of 60 loads (24.46 loads of choice, 12.05 loads 
of select, 8.01 loads of trim and 15.11 loads of ground beef).


   The feeder cattle market is experiencing the drastic movement of the cattle 
complex's new limits. October feeders are down $2.85 at $135.25, November 
feeders are down $5.00 at $130.02 and January feeders are down $3.80 at 
$125.52. The widespread volatility is being felt throughout the entire 
marketplace as contracts just continue to fall lower as the day nears noon. For 
producers looking to hit sales this week, Monday's extreme downward spiral will 
throw buyers off guard and as corn prices keep tactically moving higher, the 
nearby feeder cattle outlook is grim.


   Upon seeing the stark downward dive in the cattle contracts, the lean hog 
market is faring considerably well considering the day's huge sell out. The 
spot December contract is rallying and has surpassed nearby resistance at 
$70.00. December lean hogs are up $1.35 at $71.15, February lean hogs are down 
$0.02 at $70.92 and April lean hogs are down $1.10 at $72.55. Again, domestic 
demand continues to be impressive as support in the cutout value teeters at 
$100.25 for midday.

   The projected two-day lean hog index for 10/16/2020 is up $0.04 at $78.28 
and the actual index for 10/15/2020 is down $0.25 at $78.24. Hog prices on the 
National Direct Morning Hog Report are lower, down $2.06 with a weighed average 
of $59.84, ranging from $58.88 to $65.00 on 3,250 head and a five-day rolling 
average of $62.15. Pork cutouts total 178 loads with 166.23 loads of pork cuts 
and 11.76 loads of trim. Pork cutout values: up $1.06, $100.25.

   ShayLe Stewart can be reached shayle.stewart@dtn.com

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