Friday's markets are mixed for outside
commodities, while the September U.S. dollar index turned higher,
possibly related to unconfirmed talk of the U.S. and China talking trade
again. Dow Jones Industrials were higher earlier Friday, but are now
near Thursday's close.
LIVE CATTLE:
October cattle are down 0.37 at mid-morning,
still under bearish pressure, while the market is still trying to adjust
to the loss of the Tyson plant in Kansas earlier this month. Dow Jones
estimated Friday's cattle slaughter at 117,000 head and the Saturday
slaughter at 69,000. That should be enough to keep the weekly total
roughly steady, but in the larger picture it is still disappointing that
total cattle slaughter is up just 1% so far in 2019 -- an indication of
demand that was already flat before the Tyson plant was lost. Friday
morning started with light trade in the South at $103, down $3 from last
week's trade. Thursday saw trade around $170 in the North, which was $5
lower than last week. More business is expected to develop later
Friday. Meanwhile, choice boxed beef was priced at $231.58 in USDA's
morning report, down $6.30 from a week ago. Selects were at $212.31,
down $1.71 from a week ago.
FEEDER CATTLE:
October feeder cattle are up 0.47 at $132.45
Friday morning, coming back from an initial sell-off that took prices
down $1.77 from Thursday's close. December corn is on track for a modest
gain this week, but is still near its lowest prices in 2019. Concerns
about corn supplies not being available in the new-crop season have
largely dissipated, except for local areas where spring planting weather
was the worst. Normally, feeders would rebound on news like that, but
buyers remain cautious while demand for cattle has been lackluster in
2019. Technically, October feeder cattle do appear to be building
support around $130, the lowest October prices in over two years.
LEAN HOGS:
October lean hogs are trading down $1.15 in
Friday's mid-session, still protecting a modest gain for the week after
last Friday's tariff news from China took October prices to its lowest
close in almost a year. Also pressuring prices, USDA's morning report
showed pork carcass at $71.18, down 38 cents from Thursday afternoon,
but down nearly $9.00 from a week ago. In the short-term, last Friday's
close may have been excessively bearish, but there is no question that
the trade dispute with China has hurt U.S. hog prices in 2019 and kept
the U.S. at the back of the line as far as exports to China are
concerned. Even so, U.S. pork exports are up 15% in 2019 from a year ago
and that should help prices find an end to this four-month downward
slide. Technically speaking, $60 in October hogs represents a 75%
retracement of the August 2018 to April 2019 rally and is a good
candidate for possible support in spite of Friday's lower trade.
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