General Comments
Heading
into Friday's afternoon trade, the livestock complex is still scaling
higher in all three markets. The lean hog contracts aren't taking full
advantage of their expanded limits in the nearby contracts but are still
trading $2.00 and $3.00 higher. Cash cattle trade has shown some
development as a considerable movement of steers sold in Texas for $102
ad bids are placed in the North for $101 live and $161 dressed. December
corn is up 1 3/4 cents per bushel and December soybean meal is up
$6.10. The Dow Jones Industrial Average is up 237.14 points and NASDAQ
is down 3.70 points.
LIVE CATTLE
Live
cattle contracts are trending modestly higher keeping the day's rally
mostly between $0.22 to $0.52 higher. October live cattle are up $0.52
at $105.62, December live cattle are up $0.40 at $109.82 and February
live cattle are up $0.27 at $114.32. Following Thursday's standstill of
cash cattle trade, Friday's seen some movement as cattle in Texas sold
for $102 -- $1.00 higher than the rest of the week's trade but still
$1.00 lower than last week's average. The north has yet to move anymore
cattle this week but some bids are surfacing.
This
week's export report shared that beef sales of 15,500 MT reported for
2020 were up 37% from the previous week and 14% from the prior 4-week
average. Increases were primarily for South Korea (5,600 mt, including
decreases of 400 mt), Japan (4,300 mt, including decreases of 400 mt),
Mexico (1,300 mt).
Boxed beef prices are
mixed: choice down $0.75 ($220.08) and select up $0.19 ($207.15) with a
movement of 99 loads (55.32 loads of choice, 10.97 loads of select,
23.22 loads of trim and 9.91 loads of ground beef).
FEEDER CATTLE
Feeder
cattle contracts are keeping with their modest progression heading into
Friday afternoon. September feeders are up $0.70 at $139.87, October
feeders are up $0.72 at $140.30 and November feeders are up $0.60 at
$141.00. Thankfully the market has been aided not only by the buyer
support throughout this week's sale barn auctions, but also through the
additional interest from traders. The market's aggression is still
cautious as the stark realities of a weaker cash cattle market,
strengthening corn prices and concerns about drought weigh the market's
ability to trade effortlessly higher.
LEAN HOGS
It's
been a prosperous week for the lean hog market as support has been
ample and the cash market has been outstanding. Thankfully nearby
contracts are keeping with their upward trend through Friday's morning
trade and the deferred contracts that are trading lower are only doing
so slightly. October lean hogs are up $2.60 at $67.00, December lean
hogs are up $2.97 at $65.82 and February lean hogs are up $1.55 at
$68.97. Thinking about the upcoming weeks, the big question is how will
the gaps fill in? What export demand will transpire/develop? And how
will the complex handle its newfound price levels?
Pork
net sales of 30,200 MT reported for 2020 were down 44% from the
previous week and 3% from the prior 4-week average. Increases were
primarily for Mexico (8,900 mt, including decreases of 300 mt), China
(8,300 mt, including decreases of 400 mt), Japan (5,600 mt, including
decreases of 200 mt).
The projected lean hog
index for 9/10/2020 is up $0.84 at $63.28, and the actual index for
9/9/2020 is up $0.52 at $62.44. Hog prices are lower on the National
Direct Morning Hog Report, down $0.46 with a weighted average of $52.22,
ranging from $45.00 to $60.00 on 5,722 head and a five-day rolling
average of $48.60. Pork cutouts total 250.97 loads with 221.72 loads of
pork cuts and 29.25 loads of trim. Pork cutout values: up $0.46, $81.32.
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