GENERAL COMMENTS:
Livestock futures contracts are green across the board in the middle of Tuesday's trading session, although none of the gains are extensive enough to take the charts out of their sideways consolidation. Lean hogs, the market most in need of a boost, are seeing gains of up to $2 per cwt in some deferred 2021 contracts. December corn is up 4 1/2 cents per bushel, and December soybean meal is up $6.40. The Dow Jones Industrial Average is down 131.90 points, and the NASDAQ is up 4.77 points.
LIVE CATTLE:
The U.S. Dollar Index is sharply lower Tuesday and in danger of testing fresh November lows, which has sparked bullish price changes across a variety of dollar-denominated export-focused commodities, notably soybeans, soybean meal and lean hogs, but the cattle contracts also seem happy to go along for the ride. The December live cattle contract is up $0.80 at $111.225, the February contract is up $1.375 at $113.40, and the April contract is up $0.925 at $117.275. Cash cattle business continues to wait until later in the week, but bids and asking prices may benchmark themselves against last week's numbers: mostly $172 dressed in the North and mostly $110 live in the South.
Boxed beef prices are higher and supportive of the futures boost: choice up $6.33 ($233.28) and select up $1.10 ($213.45) with a movement of 70 loads (42.37 loads of choice, 9.82 loads of select, 4.30 loads of trim and 13.54 loads of ground beef).
FEEDER CATTLE:
A trend of lower daily highs on the feeder cattle charts is likely to pressure the market away from its recent high, seen at $141.95 in the November contract a week ago. That contract is trading at $137.425 Tuesday, sharing in gains across the board. Deferred contracts are faring even better, with January contract up $1.45 at $139.375 and the March contract up $1.35 at $139.025. With U.S. corn harvest virtually complete (95% harvested in this week's USDA Crop Progress report), stockers and backgrounding operations should be finding ample available corn stalks on which to graze animals and no major weather concerns across the Midwest this week to impede transportation.
LEAN HOGS:
Perhaps with an eye toward continued pork export prospects, deferred lean hog futures contracts are posting impressive gains amid fast trade Tuesday morning, sometimes exceeding $2 per cwt in the July and August 2021 contracts. In the more immediate future, the December contract is up $0.30 at $65.45, February is up $1.80 at $65.575, and April is up $1.80 at $69.25. While pork cutout values hold steady or improve, hog prices sold on a live and carcass basis continue to slide day by day.
The projected lean hog index for 11/16/2020 is down $0.35 at $69.73, and the actual index for 11/13/2020 was down $0.76 at $70.08. Hog prices are lower on the National Direct Morning Hog Report, down $0.13 with a weighted average of $58.77, ranging from $52.00 to $59.66 on 6,480 head and a five-day rolling average of $59.77. Pork cutouts total 258.14 loads with 239.71 loads of pork cuts and 18.43 loads of trim. Pork cutout values: up $0.10, $81.25.
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