General Comments
As the week passes by the halfway mark, trade is mostly higher throughout the livestock sector and cash cattle trade is slowly starting to develop. With corn prices backing off their recent rally, livestock contracts can breathe a little easier as rapid concerns about input costs were on the forefront of everyone's mind while corn was jumping higher. December corn is down 2 1/4 cents per bushel and December soybean meal is up $0.40. The Dow Jones Industrial Average is up 79.72 points and NASDAQ is up 36.52 points.
LIVE CATTLE
Live cattle prices are trading higher as the cash cattle trade continues to develop for $2.00 to $3.00 higher than last week's averages. August live cattle are up $0.65 at $107.37, October live cattle are up $0.67 at $110.55 and December live cattle are up $0.55 at $113.50. Wednesday's Fed Cattle Exchange didn't spark any rapid-fire trade throughout the countryside, but cattle are trading in Texas for $106, and cattle have been bid on in Kansas for $106. Action throughout the North remains painfully quiet as feeders are asking $175-plus. If boxed beef prices can keep with the upward trend through Friday's close, packers may be willing to meet feeders' full asking prices.
The Fed Cattle Exchange Auction listed a total of 1,462 head, with 150 actually sold, 1,080 head listed as unsold, and 232 head listed as PO (Passed Offer), asking prices ranged from $106 to $107. The state by state breakdown looks like this: Kansas 238 total head, with no cattle sold, 121 head went unsold, and 117 head were listed as PO ($106.25); Nebraska 460 total head, all of which went unsold; Texas 764 total head, with 150 head sold at $160.75, 499 head went unsold, and 115 head were listed as PO ($106.25).
Boxed beef prices are higher: choice up $2.20 ($223.06) and select up $1.10 ($205.75) with a movement of 106 loads (54.73 loads of choice 17.96 loads of select, 20.85 loads of trim and 12.31 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts are scaling higher into Wednesday afternoon as support from this week's special feeder cattle video sales has been phenomenal and buyers are just as ambitious to buy now as they were earlier this summer. August feeder are up $0.47 at $143.70, September feeders are up $0.45 at $146.05 and October feeders are up $0.50 at $146.87. The market will be leaning toward trading higher as corn prices have backed off trading higher, cash cattle trade is higher again this week and demand for both calves and feeders is excellent. The uncertainty comes from traders as they wonder how much more upward direction the complex has in the near future.
LEAN HOGS
After dropping considerably lower Tuesday afternoon, the market is trading fully higher throughout both nearby and deferred contracts and the cash market is even trading higher as well. October lean hogs are up $1.12 at $52.55, December lean hogs are up $0.67 at $53.85 and February lean hogs are up $0.42 at $61.55. Unfortunately, if the market keeps scaling higher it will soon reach resistance levels again and without considerable support from the cash market or cutout prices, a steady holding pattern may be the market's nearby trend.
The projected lean hog index for 8/17/2020 is up $0.34 at $54.81 and the actual index for 8/14/2020 is up $0.63 at $54.57. Hog prices are higher on the National Direct Morning Hog Report, up $0.10 with a weighted average of $37.75, ranging from $34.50 to $40.00 on 3,343 head and a five-day rolling average of $37.54. Pork cutouts total 195.38 loads with 164.97 loads pork cuts and 30.41 loads of trim. Pork cutout values: up $2.75, $76.81.
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