General Comments
With the earlier part of the week's trade being favorable to cattle contracts, concerns that the market's motivation would die off as the later part of the week arrived were valid but thankfully Thursday's trade has grown even more supportive of the cattle contracts! Meanwhile the lean hog complex is trading modestly lower following the morning's disappointing export report. December corn is down 2 1/2 cents per bushel and December soybean meal is up $0.30. The Dow Jones Industrial Average is up 63.12 points and NASDAQ is up 145.59 points.
LIVE CATTLE
As boxed beef prices print higher and nearby contracts scale anywhere from $2.00 to $3.00 higher -- feedlots are soaking up the market's momentum and cherishing the fact that they didn't sell-out early in the week and miss the opportunity to trade cash cattle to their fullest potential. December live cattle are up $2.85 at $107.50, February live cattle are up $2.47 at $110.17 and April live cattle are up $2.02 at $113.40. Bids of $106 are stuck to the table as packers don't want to offer more but feedlots are seeing the market's favor tip their way. In the last hours there's been a handful (very, very few) cattle sold in Texas and Kansas for $106 -- but the rest of the countryside seems willing to wait and hold out for stronger bids. Asking prices in the South hold steady at $108 and asking prices in the North are at $168.
Beef net sales of 18,900 mt reported for 2020 were down 13% from the previous week and 6% from the prior four-week average. The three primary increases were for China (4,300 mt), Japan (4,200 mt, including decreases of 200 mt) and South Korea (4,200 mt, including decreases of 1,500 mt).
Boxed beef prices are higher: choice up $1.50 ($207.29) and select up $1.99 ($191.57) with a movement of 64 loads (35.24 loads of choice, 7.99 loads of select, 6.81 loads of trim and 13.80 loads of ground beef).
FEEDER CATTLE
The feeder cattle market is continuing to press forward and regain some of the position lost last week. November feeders are up $2.70 at $136.60, January feeders are up $1.52 at $131.47 and March feeders are up $1.55 at $131.07. The market was closely watching the corn market Thursday morning as corn export sales were robust and could have sent the complex trading higher. Thankfully the corn market has opted to continue to trade lower which is favorable to cattlemen.
LEAN HOGS
As the livestock market's attention falls to the cattle contracts, the lean hog market is left trading mildly lower into Thursday's afternoon trade. December lean hogs are down $0.70 at $65.67, February lean hogs are down $0.55 at $65.65 and April lean hogs are down $0.42 at $68.32. Unfortunately as the lean hog market has seemed to reach its top, the market is being left high and dry to trade aimless lower.
Pork net sales of 29,000 mt reported for 2020 were up 8% from the previous week, but down 24% from the prior four-week average. The three primary increases were for Mexico (8,400 mt, including decreases of 1,500 mt), Japan (6,400 mt, including decreases of 200 mt) and South Korea (2,900 mt, including decreases of 400 mt).
The projected lean hog index for 10/28/2020 is down $0.80 at $75.49, and the actual index for 10/27/2020 is down $1.20 at $76.29. Hog prices are not available on the National Direct Morning Hog Report due to packer submission problems. Pork cutouts total 145.74 loads with 97.00 loads of pork cuts and 48.74 loads of trim. Pork cutout values: up $5.04, $89.56.
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