General Comments
Monday has been brutally rough for the cattle contracts but upon seeing traders flutter from the cattle complex, the lean hog sector has been able to rally steadily into Monday's noon hour. With Friday's Cattle on Feed report sharing a steeply higher placement number, the short-term top in cattle charts has solidified. December corn is up 3 cents per bushel and December soybean meal is down $0.20. The Dow Jones Industrial Average is up 260.36 points and NASDAQ is up 71.34 points.
LIVE CATTLE
Live cattle contracts are in the same mindset that feeder cattle contracts are, and with traders unwilling to risk taking the market higher, a downward trade is expected for all of Monday. October live cattle are down $0.77 at $107.77, December live cattle are down $1.10 at $110.67 and February live cattle are down $1.22 at $113.40. Feedlot managers are unshaken by Friday's COF report as asking prices are anticipated to be higher again this week. As packers continue to commit to large strings of fat cattle, feeders look at the market and see an opportunity that's available here and now and no reason to cower into pricing cattle lower thus far. New showlists appear to be about steady in Nebraska/Colorado, somewhat lower in Kansas, and lower in Texas.
Last week's negotiated trade totaled a staggering 130,278 head. Of that 110,723 head are committed for delivery in the next two weeks while the remaining 19,555 head will be delivered in the following 15 to 30 days.
Boxed beef prices are higher: choice up $1.37 ($227.31) and select up $2.65 ($211.64) with a movement of 46 loads (26.19 loads of choice, 4.60 loads of select, 11.37 loads of trim and 3.50 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts are taking the brunt of Monday's doggish trade as contracts fall $0.97 to $2.67 lower. September feeders are down $2.10 at $142.75, October feeders are down $2.60 at $142.70 and November feeders are down $2.07 at $143.40. In trader's minds there's one only one way for the complex to head following Friday's bearish Cattle on Feed report, and that's sharply lower. And although the countryside has unwaveringly supported higher prices the board is reluctant to trade anywhere but lower.
LEAN HOGS
The cattle contracts maybe suffering but the majority of hog contracts are higher. October lean hogs are up $0.25 at $54.50, December lean hogs are down $0.10 at $55.35 and February lean hogs are down $0.12 at $61.75. Deferred contracts are taking the day and rallying even higher than nearby contracts, but with the nearby contracts still $10 to $20 discounted from the July 2021 and August 2021 contracts -- it would be encouraging to see those nearby contracts absorb more support.
The projected lean hog index for 8/21/2020 is up $0.55 at $$56.06, and the actual index for 8/20/2020 is up $0.10 at $55.51. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.79 with a weighted average of $39.41, ranging from $37.00 to $41.00 on 3,265 head and a five-day rolling average of $38.20. Pork cutouts total 137.36 loads with 117.49 loads of pork cuts and 19.87 loads of trim. Pork cutout values: up $2.86, $76.37.
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