GENERAL COMMENTS:
Even though the lean hog complex closed mostly lower, with a strong cutout close and a higher cash market again, Tuesday was a positive day. The feeder cattle market secured a positive close throughout the board, leaving the live cattle market up for debate and leaving us wondering how this week's cash cattle trade will pan out. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.72 with a weighted average of $58.89 on 9,467 head. December corn is down 3 1/2 cents per bushel and December soybean meal is down $2.80. The Dow Jones Industrial Average is up 2.27 points and NASDAQ is up 133.67 points.
LIVE CATTLE:
Monday's trade was higher, Tuesday's trade was mostly lower and now both packers and feeders sit around waiting for the rest of the week, keenly watching the board to see how it will influence this week's cash cattle trade. October live cattle closed $0.22 higher at $107.10, December live cattle closed $0.12 lower at $111.57 and February live cattle closed $0.32 higher at $116.02. The battle this week falls into the hands of the cash market. Feeders want to regain some of the leverage they've lost over the last couple of weeks and would like to see the market $1.00 to $2.00 higher. Packers obviously want the complete opposite. With boxed beef prices falling, packers hope to see prices steady at best this week. There's rumor that two major packers don't have Saturday kills planned. If this is true, feeders' ability to move the market higher is slim. If it's not true, and just a scare tactic, then waiting this week out and pushing trade later could better serve feeders once again. Tuesday's slaughter is estimated at 120,000 head, 2,000 head more than a week ago and steady with a year ago.
Boxed beef prices are lower: choice down $1.12 ($216.09) and select down $1.48 ($206.28) with a movement of 159 loads (100.34 loads of choice, 18.17 loads of select, 10.88 loads of trim and 29.95 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Thus far there's been no cash cattle trade shifting the week's business to the latter half and potentially very tail end of the week. The Fed Cattle Exchange did share that they plan to host their sale Wednesday, having fixed the technical issues that delayed last week's sale. Trade could very well wait until Thursday or Friday, and if it does develop as early as Wednesday, steady is most likely the best the day will do.
FEEDER CATTLE:
Tuesday's pull back leaves cattlemen wondering if the market simply took the day to rest before igniting stronger trade come Wednesday or if the upward momentum has run its course. September feeders closed $0.17 higher at $141.67, October feeders closed $1.10 higher at $143.70 and November feeders closed $0.92 higher at $144.12. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to the sale two weeks ago, feeder steers and heifers sold $4.00 to $8.00 higher. The division was stark -- weaned calves sold steady to somewhat higher but unweaned calves suffered tremendously, with instances of $10.00 lower. With temperatures swinging from daytime highs to nighttime lows, buyers are leery of buying unweaned calves as it comes with such a risk. The CME feeder cattle index 9/14/2020: down $0.93, $140.52.
LEAN HOGS:
The lean hog complex closed lower except for the spot October contract, which traded safely within the realm of Monday's trade. October lean hogs closed $1.07 higher at $65.70, December lean hogs closed $0.52 lower at $63.05 and February lean hogs closed $0.05 lower at $68.70. Though packers didn't move Tuesday's cash market $2.00 to $4.00 higher like they have in the day's past, the market still closed stronger and on nearly 10,000 head. Even though the board closed mostly lower, the market continues to be supported by not only the cash market, but also consumer demand as the pork cutout values closed over $4.50 higher Tuesday's afternoon. Producers may have questions regarding the market's longevity, but so long as demand is noteworthy, packers will most likely keep pulling for more hogs. Pork cutouts total 420.84 loads with 387.79 loads of pork cuts and 33.06 loads of trim. Pork cutout values: up $4.55, $84.26. Tuesday's slaughter is estimated at 485,000 head, 20,000 head more than a week ago and 7,000 head less than a year ago. The CME lean hog index 9/11/2020: up $1.27, $64.55.
WEDNESDAY'S CASH HOG CALL: Steady to slightly higher. A day or two of steady trade wouldn't be a defeat for the lean hog sector as the market's ginormous leap higher was done in a short matter of time. But with consumers pulling pork protein, packers are likely to keep buying aggressively.
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