General Comments
Friday's trade has been back and forth for the live cattle and lean hog contracts. As the day has progressed the live cattle market has absorbed all the support throughout livestock arena and is trading modestly higher, while also being coaxed along by a strong cash cattle market. The feeder cattle contracts are veering lower keeping with the week's trend and following Thursday's rally the lean hog market has opted to scale lower into the week's close. December corn is up 8 1/2 cents per bushel and December soybean meal is up $4.80. The Dow Jones Industrial Average is up 223.30 points and NASDAQ is up 141.60 points.
LIVE CATTLE
Feedlots managed to push the cash cattle market $2.00 higher again this week and are gaining substantial leverage in the cash cattle market. The board traded higher and lower all throughout the morning's trade but developed some strength as cash cattle trade developed. October live cattle are up $0.20 at $109.90, December live cattle are up $0.17 at $112.80 and February live cattle are down $0.27 at $114.72. When feeders work together its amazing what the market can accomplish and as this week marks the fourth consecutive week of higher prices! The Southern Plains accomplished selling cattle live mostly at $109, and Northern cattle sold dressed for $170. Some dressed cattle are selling with delivery for the week of 10/26/2020, indicating that packers are getting inventory built.
Boxed beef prices are lower: choice down $0.93 ($215.07) and select down $2.28 ($200.82) with a movement of 73 loads (43.66 loads of choice, 15.46 loads of select, 9.30 loads of trim and 4.92 loads of ground beef).
FEEDER CATTLE
The feeder cattle complex has suffered all throughout the week not being able to rally trader interest and the corn market's rally really sent the contracts spiraling lower. October feeders are down $0.27 at $137.77, November feeders are down $0.90 at $135.52 and January feeders are down $1.15 lower at $133.80. Looking through multiple upcoming sales, next week will be the first real test of spring-born calves hitting the fall's market. Looking bullishly at the market, the support throughout the cash cattle market has a strong pull on feeder's morale; however, the bearish realization of rising corn prices concern many about input expenses moving forward.
LEAN HOGS
Friday's lean hog market hasn't been as strong as many assumed it would be following Thursday's bullish export report but given the fact that the market is trading at far higher levels than assumed, it's safe to say that the market's upward momentum is slowing down. October lean hogs are up $0.55 at $77.90, December lean hogs are down $0.05 at $66.80 and February lean hogs are down $0.35 at $70.05. As export demand solidified this past week, the market will also be watching closely to see how domestic demand continues.
The projected lean hog index for 10/7/2020 is up $0.12 at $77.62 and the actual index for 10/6/2020 is up $0.09 at $77.50. Hog prices are lower on the National Direct Morning Hog Report, down $0.47 with a weighted average of $64.58, ranging from $60.75 to $68.50 on 3,946 head and a five-day rolling average of $63.97. Pork cutouts total 232.50 loads with 209.18 loads of pork cuts and 23.32 loads of trim. Pork cutout values: up $1.44, $96.80.
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