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
DTN Livestock Analyst
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 firstname.lastname@example.org
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