General Comments
It's about as ugly as a Monday can get for the cattle contracts as the industry feels the full effect of the market's new limits. Live cattle are $2.00 to $3.00 lower, while feeder cattle range anywhere from $3.00 to $5.00 lower as the market sells out. The lean hog market is feeling Monday's pressure as both the board and cash hog markets trade lower, but thus far isn't manageable compared to the cattle market's drastic dive lower. December corn is up 3 cents per bushel and December soybean meal is up $7.70. The Dow Jones Industrial Average is down 95.57 points and NASDAQ is down 41.80 points.
LIVE CATTLE
The cattle market's psychology is taking a hit Monday morning as both live cattle and feeder cattle futures dive lower and feedlot's resiliency is compromised as some Texas cattle sell already in the week for $106. Rallying corn prices and bottom that seems limitless at the time in the futures market has pressured Monday's market more than any anticipated. October live cattle are down $2.55 at $104.57, December live cattle are down $3.05 at $105.57 and February live cattle are down $3.07 at $108.40. This week's showlists appear to be mixed, larger in Kansas and somewhat smaller in Texas and Nebraska/Colorado. Heading into the afternoon and rest of the week, getting a grasp on the morning's damage is vital as analysts and producers wonder if the downward momentum is done for or it more is to be seen.
Last week's negotiated sales totaled 111,123 head. Of that, 73,440 head are committed for delivery in the next two weeks while the remaining 37,684 head are for delivery in the following 15 to 30 days.
Boxed beef prices are lower: choice down $0.17 ($209.86) and select down $1.05 ($192.47) with a movement of 60 loads (24.46 loads of choice, 12.05 loads of select, 8.01 loads of trim and 15.11 loads of ground beef).
FEEDER CATTLE
The feeder cattle market is experiencing the drastic movement of the cattle complex's new limits. October feeders are down $2.85 at $135.25, November feeders are down $5.00 at $130.02 and January feeders are down $3.80 at $125.52. The widespread volatility is being felt throughout the entire marketplace as contracts just continue to fall lower as the day nears noon. For producers looking to hit sales this week, Monday's extreme downward spiral will throw buyers off guard and as corn prices keep tactically moving higher, the nearby feeder cattle outlook is grim.
LEAN HOGS
Upon seeing the stark downward dive in the cattle contracts, the lean hog market is faring considerably well considering the day's huge sell out. The spot December contract is rallying and has surpassed nearby resistance at $70.00. December lean hogs are up $1.35 at $71.15, February lean hogs are down $0.02 at $70.92 and April lean hogs are down $1.10 at $72.55. Again, domestic demand continues to be impressive as support in the cutout value teeters at $100.25 for midday.
The projected two-day lean hog index for 10/16/2020 is up $0.04 at $78.28 and the actual index for 10/15/2020 is down $0.25 at $78.24. Hog prices on the National Direct Morning Hog Report are lower, down $2.06 with a weighed average of $59.84, ranging from $58.88 to $65.00 on 3,250 head and a five-day rolling average of $62.15. Pork cutouts total 178 loads with 166.23 loads of pork cuts and 11.76 loads of trim. Pork cutout values: up $1.06, $100.25.
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