General Comments
As Monday afternoon quickly approaches, the feeder cattle complex is losing support while the lean hog market gains interest. While the other livestock contracts trade back and forth, the live cattle market is keeping with its steady upward progression through Monday's mostly uneventful trade. December corn is down 3/4 cent per bushel and December soybean meal is down $6.70. The Dow Jones Industrial Average is up 350.91 points and NASDAQ is up 206.93 points.
LIVE CATTLE
The live cattle complex may only be seeing a modest progression into Monday afternoon but while the other contracts seem undecided, surprisingly the live cattle sector trades confidently. October live cattle are up $0.47 at $108.70, December live cattle are up $0.55 at $111.65 and February live cattle are up $0.40 at $115.10. Helping fuel the market is seeing last week's cash cattle trade total over 125,000 head even with the market jumping $2.00 to $3.00 higher. Monday's cash cattle market is expectedly quiet not showing much interest from either packers nor feeders to get the week's trade rolling too early. New showlists appear to be very near steady in Kansas, but lower in Texas and Nebraska/Colorado.
Last week's negotiated purchases totaled a staggering 125,552 head. Of the 125,552 head most of the cattle were committed for delivery in next two weeks (88,017 head) and the remaining 37,535 head were committed for the following 15 to 30 days. There have only been three other weeks in 2020 when packers bought more than 125,000 negotiated cattle in one week's time. While in 2019 there were only two weeks for the whole year that negotiated purchase surpassed 125,000 head.
Boxed beef prices are mixed: choice down $1.41 ($217.47) and select up $1.65 ($209.26) with a movement of 73 loads (41.55 loads of choice, 15.68 loads of select, 3.89 loads of trim and 11.73 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts have traded back and forth throughout Monday's morning trade, showing that the complex is undecided where the market should head to and needing both technical and fundamental direction.
October feeder cattle are up $0.07 at $139.97, November feeder cattle are up $0.10 at $139.97 and January feeders are down $0.10 at $137.90. As the week progresses and unfortunately as drought conditions progress throughout the U.S. it's likely that more calves will be hitting the scales sooner rather than later.
LEAN HOGS
Over the last four weeks the lean hog market has rallied far beyond what most assumed even possible, but without ginormous export sales the market begins to wonder how sustainable these price levels are? October lean hogs are up $0.30 at $74.80, December lean hogs are down $0.12 at $62.37 and February lean hogs are up $0.22 at $67.87. Helping keep some of the market's positivity is the domestic pork demand. As midday pork cutout values reach $100.64 (up $8.00) the market is hopeful to keep producers returning to the pork section of retail counters.
The projected lean hog index for 10/2/2020 is up $0.45 at $77.26 and the actual index for 10/1/2020 is up $0.07 at $76.81. Hog prices are unchanged on the National Direct Morning Hog Report with a weighted average of $63.32, ranging from $58.00 to $64.00 on 4,338 head and a five-day rolling average of $63.64. Pork cutouts total 153.28 loads with 138.76 loads of pork cuts and 14.52 loads of trim. Pork cutout values: up $8.49, $100.64.
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