General Comments
Cattle contracts tried rallying earlier in the day but have fallen subject to the market's pressure and lack of trader buy-in, once again. Meanwhile the lean hog market continues to rally; especially in the December contract, as stronger cutout values help boost the market's morale. December corn is up 1 3/4 cents per bushel and December soybean meal is up $6.60. The Dow Jones Industrial Average is down 186.32 points and NASDAQ is down 121.04 points.
LIVE CATTLE
Live cattle contracts are tipping lower like the feeder cattle complex -- as it seems incredibly difficult to persuade traders to look at the two cattle contracts. October live cattle are down $0.62 at $108.20, December live cattle are down $1.27 at $109.95 and February live cattle are down $0.67 at $112.97. The market's cash cattle trade hasn't interested feedlots although bids are becoming more readily available. In Kansas and Texas cattle are bid at $108, and in Nebraska cattle are bid at $107. Feedlots have explicitly seen over the last four weeks the advantages in waiting until later in the week to market their cattle and its looking like this week's trade could end up waiting until Thursday or Friday to really move cattle.
The Fed Cattle Exchange Auction listed a total of 774 head, of which 671 actually sold, 103 head were listed as unsold, and none were listed as PO (Passed Offer). The state by state breakdown looks like this: Kansas 123 total head (one lot), with 123 head sold at $108.00, none went unsold; Nebraska 103 total head (one lot), none sold; Texas 548 total head (three lots), with 548 head sold at $108.00-$108.25, none were unsold. The delivery date/weighted averages breakdown is as listed: 1-9-day delivery: 304 head total, all sold, with a weighted average price of $108.00; 1-17-day delivery 470 head total, 367 head sold, with a weighted average price of $108.25.
Boxed beef prices are mixed: choice down $0.68 ($211.76) and select up $0.13 ($200.21) with a movement of 98 loads (64.26 loads of choice, 26.52 loads of select, zero loads of trim and 7.19 loads of ground beef).
FEEDER CATTLE
Feeder cattle contracts made a run at higher prices earlier Wednesday morning but as traders remain leery of the cattle contracts -- a lack of followed through support left the market trading lower. In respect to higher input costs, feeders haven't been overly pressured by Wednesday's corn market but as the noon hour approaches nearby corn contracts are seeing some mildly higher prices. October feeders are down $0.52 at $137.60, November feeders are down $0.72 at $136.10 and January feeders are down $1.12 at $133.10.
LEAN HOGS
Just when the market wonders if the lean hog rally has seen its top, the market rallies again far beyond expectation and jumps to new eight-month highs. December lean hogs are up $2.25 at $68.40, February lean hogs are up $1.15 at $71.27 and April lean hogs are up $0.37 at $75.00. Being fueled by strong domestic pork demand, the complex feels secure knowing that the countryside's large supply will be met with excellent demand.
The projected two-day lean hog index for 10/13/2020 is up $0.03 at $78.24 and the actual index for 10/12/2020 is up $0.07 at $78.21. Hog prices are lower on the National Direct Morning Hog Report, down $1.82 with a weighted average of $61.92, ranging from $58.00 to $64.50 on 3,380 head and a five-day rolling average of $63.36. Pork cutouts total 170.61 loads of pork cuts and 27.37 loads of trim. Pork cutout values: up $1.20, $97.10.
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