Monday, August 10, 2020
Monday Morning Livestock Market Summary - Limited Futures Support Expected Following Stronger Cash Sales
|BULL SIDE||BEAR SIDE|
Friday, August 7, 2020
Cattle contracts weren't as powerful this Friday as they were last week, but with the cattle contracts stepping to the sidelines, the lean hog complex was able to gain traction and blow past nearby resistance.
Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.17 with a weighted average of $38.11 on 8,212 head. December corn is down 3 cents per bushel and December soybean meal is down $1.60. The Dow Jones Industrial Average is up 39.98 points and NASDAQ is down 101.79 points.
From Friday to Friday livestock futures scored the following changes: August live cattle down $0.03, October live cattle down $1.43; August feeder cattle down $1.95, September feeder cattle down $1.10; August lean hogs down $1.00, October lean hogs down $1.35.
Live cattle contracts weren't granted any favors throughout Friday's trade as contracts closed $0.07 to $0.87 lower. August live cattle closed $0.17 higher at $102.80, October live cattle closed $0.52 lower at $106.45 and December live cattle closed $0.87 lower at $110.07. Traders seemed to grow leery of the market as the momentum in the feeder cattle contracts was weakening in the later part of the week, and coming off last week's rally, pushing contracts higher seemed risky. Friday's cash cattle trade was quiet as the cattle that did trade were mostly steady with the week's earlier accomplishments. Cattle traded in Iowa for $163 to $164, some cattle traded in Nebraska for $163 and Kansas moved some cattle late Friday afternoon for $100. Friday's slaughter is estimated at 109,000 head -- 4,000 head less than a week ago and 8,000 head less than a year ago. Saturday's kill is projected to be around 60,000 head.
Boxed beef prices closed higher: choice up $0.81 ($205.47) and select up $0.74 ($192.75) with a movement of 116 loads (64.21 loads of choice, 14.99 loads of select, 15.53 loads of trim and 20.93 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to slightly higher. Feeders will be anxious to price cattle higher again as they were able to move the market higher this week and really push on packers. Packers may push back as the lack of demand from the restaurant sector is changing their customary marketing structure.
Friday's pressure grew stronger as the day traded through the afternoon and the market's downward trend captured most of the feeder cattle contracts. August feeder cattle closed $0.75 lower at $142.72, September feeder cattle closed $0.75 lower at $145.12 and October feeder cattle closed $0.37 lower at $146.40. With feeder cattle sales continuing to ring the bell across the nation, next week's market is going to have to face the same challenge as weeks past: is there enough support to surpass resistance and keep above the $143.85 threshold or will the market fear a topping chart and simply trade sideways with little aggression? Iowa's weekly cattle report shared that on average, compared to a week ago feeder steers weighing 500 to 825 pounds sold steady to $10.00. And feeder heifers weighing 500 to 725 pounds sold $1.00 to $5.00 higher. The CME feeder cattle index 8/6/2020: up $1.13, $141.92.
The lean hog complex heads into the week with three strong motivators for next week's trade: a stronger close through the futures complex, a stronger cutout value and higher cash hog prices! August lean hogs closed $1.25 higher at $51.00, October lean hogs closed $1.77 higher at $50.97 and December lean hogs closed $1.42 higher at $52.92. One of the market's biggest challenges is taking care of its nearby contracts, as the first and second quarter of 2021 are far more favorable. Pork cutouts totaled 341.72 loads with 300.49 loads of pork cuts and 41.23 loads of trim. Pork cutout values: up $1.13, $71.93. Friday's slaughter is estimated at 474,000 head, steady with a week ago and 25,000 head more than a year ago. Saturday's kill is projected to be around 230,000 head. The CME lean hog index 8/5/2020: down $0.14, $52.78.
MONDAY'S CASH HOG CALL: Steady. It was encouraging to see packers not only pay slightly more for hogs Friday afternoon but to also see over 8,000 head trade. If the market's momentum can carry into next week, prices may be able to trade steady instead of scaling lower.