General Comments
The cattle complex has traded on both sides of steady Tuesday morning seeming anxiously uncertain where the market should in the near future. The market's uncertainty will likely continue as both technical and fundamental reasons continue to be stressed and leave many questions unanswered for the current time. Appearing to be the only steady livestock contract thus far in the week, the lean hog complex keeps trading steadily higher and cash hog prices are higher again Tuesday morning. December corn is down 1 cent per bushel and December soybean meal is down $0.30. The Dow Jones Industrial Average is up 70.97 points and NASDAQ is up 116.40 points.
LIVE CATTLE
Last week's rally in corn prices could have been some of the underlying weakness brewing in the cattle contracts, but as this week's corn trade remains mostly bearish cattle contracts are flirting with the notion of trading higher. The market sits in a pivotal timeframe as contracts could easily scale higher or tumble lower once enough traders agree on the same movement. With Taiwan opening the door for more U.S. beef and showlists of fat cattle now at manageable levels, the market could support an upward movement if desired. But as every coin has two sides, the market could easily fall lower as boxed beef prices teeter lower, carcass weights are still far heavier than usual and cash cattle prices are showing some resistance. The market will be subject to volatile swings over the next month until the feeder cattle rally begins. October live cattle are up $0.22 at $105.52, December live cattle are up $0.27 at $109.25 and February live cattle are up $0.42 at $112.75. The North is slow again to price their cattle, but Southern cattle are priced at $107 and bids are on the table in Kansas and Texas at $104.
Boxed beef prices are mixed: choice up $1.18 ($229.13) and select down $0.97 ($214.35) with a movement of 78 loads (33.53 loads of choice, 11.62 loads of select, 23.78 loads of trim and 8.62 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts have traded in the same back and forth manner as the live cattle contract have Tuesday morning. With minor support surfacing in the complex, traders are willing but not overly confident in moving the market higher given the uncertainty in the live cattle market. September feeder cattle are down $0.10 at $140.20, October feeder cattle are own $0.07 at $140.55 and November feeder cattle are up $0.05 at $141.42.
LEAN HOGS
The support in the lean hog complex has held steady through Tuesday's trade despite seeing the weakness in the cattle contracts. October lean hog are up $1.32 at $54.92, December lean hogs are up $0.70 at $55.82 and February lean hogs are up $0.57 at $62.15. Watching the spot October contract trade throughout the later part of the day and into Wednesday is critical as the market comes extremely close to either bowing down or rallying past the $55.00 resistance plane. With the support from a stronger cash market and gains once again in the cutout value the market could very likely rally above the plane.
The projected lean hog index for 8/31/2020 is up $0.20 at $56.80 and the actual index for 8/28/2020 is down $0.45 at $56.60. Hog prices are higher again on the National Direct Morning Hog Report, up $0.20 with a weighted average of $43.23, ranging from $39.00 to $43.50 on 3,583 head and a five-day rolling average of $42.79.Pork cutouts total 245.69 loads with 229.67 loads of pork cuts and 16.02 loads of trim. Pork cutout values: up $1.19, $73.81.
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