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Monday, September 30, 2019

Monday Closing Livestock Market Summary - Mixed Close in Livestock

GENERAL COMMENTS:
The week began on a strong note for some and weary for others. Largely the livestock complex opened traditionally with live cattle and feeder cattle unsure of whether the market would subside or grab onto new highs, and the corn contract acted as expected with confirmation of more shipments to be made to Mexico. Corn futures closed 16 1/4 cents higher. According to the National Direct Afternoon Hog Report, prices are up $0.64 with a weighted average of $49.02. The stock market closed stronger with the Dow Jones Industrial Average up 97 and the NASDAQ up 59.
LIVE CATTLE:
The live cattle market could be a gamble this week. With boxed beef prices eroding to follow seasonal trends, shows lists being mixed (higher in the South, lower in the North), slaughter expected to be lower -- and with packer's able to pull their October contracts this week -- it will be a tough act to get higher fat cattle prices this week. Live cattle closed the day mixed: $0.60 higher to $0.45 lower. Nearby contracts struggle to find interest, while deferred contracts sit with moderate gains. Live cattle equivalent index: $136.40, down $0.74.
Boxed beef cutouts closed the day lower: choice down $0.14 ($212.44) and select down $2.75 ($187.11) with moderate to fairly good offerings totaling 106 loads total (44.52 loads of choice cuts, 34.01 loads of select cuts, 11.22 loads of trim and 15.95 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. With asking prices yet to be established and no confirmed bids that have surfaced, it's unlikely that there will be any significant movement in the cash market until midweek or later.
FEEDER CATTLE:
Despite last week's strong feeder cattle market, feeder cattle contracts took Monday's opening hard. Unable to set a precedence in the market with traders seeming uninterested and knowing that the country side is bound to be flooded with calves trotting across scales as soon as next week, the feeder cattle market wasn't the place to find your serotonin Monday. Feeder futures closed lower, ranging from being moderate to sharply lower, down $0.32 to $1.92. On an estimated run of 6,900 head (up from 6,295 head last week) Oklahoma City sold feeder steers $2 to $4 higher and feeder heifers sold mostly steady.
LEAN HOGS:
Nearby and deferred contracts in the lean hog sector all closed higher, up $0.17 to $2.70. Even with Friday's daunting USDA Hogs and Pigs report, the lean hog market has surged on and not looked back. Pork Cutout: $73.73, up $0.47. Lean hog equivalent index: $78.47, up $0.47.
TUESDAY'S CASH HOG CALL: Steady to $1 higher. There's a good chance that with a strong closing board and supporting cutout values one could see a slight bump in the market, but then again, it's early in the week and no one likes to hand out easy money too soon before the market is truly established.

#completeherdhealth

Monday Midday Livestock Market Summary - Corn Prices Surge While Rest of Livestock Complex Awakes Slowly

General Comments
The USDA confirmed early Monday morning that Mexico has bought 120,000 metric tons of corn for 2019-2020 delivery. Consequently, corn contracts are on the upward move and as the days moves along the rest of the livestock complex is starting to warm up too. December corn is up 9 3/4 cents per bushel and December soybean meal is up $4.30. The Dow Jones Industrial Average is up 161.50 points and NASDAQ is up 56.77 points.
LIVE CATTLE
December live cattle opened Monday at $110.525 and are currently trading just shy of that at $110.450. Last week's gains seen on both the board and cash market rallied the countryside and left cattlemen feeling optimistic. Whether or not those gains will stick is unknown as some see the rally as a market correction to the Kansas fire, while other are weary of the overbought market and slowing seasonal demand. Monday's board is showing positive support in deferred contracts, while nearby contracts have mild losses.
Last week in the five-area trading region, fat cattle prices averaged $104.93 securing a $3.01 gain from the previous week.Formula totals for last week were mixed, higher in the South, but lower in Nebraska: Kansas 88,693(up 13,908), Nebraska 58,750(down 6,062), Texas 97,392 (up 8,580). Total trade volume was also mixed, higher in Kansas and Texas but lower in Nebraska: Kansas 99,743(up 9,051), Nebraska 89,850(down 7,195), Texas 101,995 (up 9,342). New showlists appear to be mixed higher in the South, but lower in Nebraska/Colorado.
Boxed beef cutouts are mixed at midday: choice up $0.21 ($212.79) and select is down $0.79 ($189.07). Monday's offering of boxed beef movement totaled 45 loads (21.65 loads of choice cuts, 15.77 loads of select cuts, 0 loads of trim and 7.55 loads of ground beef).
FEEDER CATTLE
Feeder cattle are hesitant to really get the ball rolling Monday morning and contracts have very few interested traders. The October feeder cattle contract opened Monday at $144.30 and has since swayed to $142.50. It wouldn't be unlikely for the week to start off slow and lethargic and then follow suit with whatever the live cattle market decides to do later in the week.
LEAN HOGS
Lean hog contracts have started to heat up with the December contract drawing lots of attention. December lean hogs opened Monday morning at $68.90 and have since scaled to $72.10. Friday's USDA report was worrisome in its increased hog numbers, but with other nations struggling with disease outbreaks and positive trade negotiations being made, the lean hog complex has surged on anyways.
The projected lean hog index for 9/27/19 is $56.43, up $1.09 and the actual lean hog index for 9/26/19 came to $55.34 up $0.62. Prices are up ever so slightly on the National Direct Morning Hog Report, up $0.03 at a weighted average of $48.41, ranging from $47.00 to $50.00 on 6,264 head hold with a five-day rolling average of $47.43. Pork cutouts totaled 115.34 loads, with 101.73 loads of pork cuts and 13.61 loads of trim. Pork cutout values came in $0.96 higher at $74.22.

#completeherdhealth

Monday Morning Livestock Market Summary - Traders Focus on Increased Hog Inventory

GENERAL COMMENTS:
Cash cattle trade for the week remained higher in all areas with prices moving $2 to $5 per cwt higher, depending on the areas impacted. Southern trade remained at $103 per cwt, $2 per cwt higher than last week, while northern trade was seen mostly $165 dressed, $3 higher, and $106 to $107 live, $4 to $5 per cwt higher. This is expected to spark optimism in the upcoming week, although Monday's activity is expected to be limited to showlist distribution and inventory taking. Active trade is likely to be pushed off until later in the week, which is also placing any expected trade into the month of October. Futures trade is expected mixed in light-to-moderate trade as traders continue to build on the moderate-to-strong rally that developed last week. Nearby futures prices are now trading at the highest level since early August, as December contracts are testing $111.45 resistance set on Aug. 9. A move above these levels before the end of the month should help spark additional bullish technical support moving into the month of October.
Early trade is expected to remain generally weak with nearby contracts focusing on the increased hog numbers on Friday's Hogs and Pigs report. The USDA announced that as of Sept. 1, there were nearly 77.7 million hogs in the U.S. hog production system. This is not only 3.4% over year-ago levels, but well above re-report estimates through the country. The overall inventory level is expected to be viewed as bearish, at least in the short term on the market and for nearby contracts. The positive news in the market was seen in farrowing intentions with December through May intentions near stable with the previous year. This would limit the upside momentum of overall hog production long term and is expected to create longer-term support through the complex. Little news has developed surrounding the trade talks with China that are expected to take place sometime next week. The anticipation of positive developments is helping to contain previous market support in lean hog trade, although the uncertainty in the complex may cause futures pressure through most of the morning. Cash hog values are expected steady to $1 per cwt higher, with most bids steady to firm. Expected slaughter Monday is at 483,000 head.
BULL SIDEBEAR SIDE
1)
Strong cash cattle trade last week is expected to spark increased expectations of further market gains during early October.
1)
The Aug. 9 futures prices continue to remain the test of breaking out of recent market pressure. December futures are nearing these levels before Tyson's Kansas plant fire, but the uncertainty of early week buyer support breaking through this threshold may limit early day support.
2)
Active support late last week in nearby live cattle futures is helping to stimulate buyer interest. This is helping to put the focus on continued long-term support across the cattle complex.
2)
Beef values have been unable to show significant support through the end of last week despite strong gains in futures and cash markets. Although packer margins still remain extremely attractive, packers are going to try to defend these margins as much as possible during early October.
3)
Wholesale pork values are hoping for overall market support going into the fourth quarter of the year, as the summer buying season passes and product focus moves from ribs and bacon, and back to ham and more expensive prime pork cuts through the end of the year.
3)
Larger-than-expected hog supplies as of Sept. 1 on Friday's Hogs and Pigs report is expected to create confirmation of the abundant availability of pork yet to hit the production system. This is likely to erode previous support through the complex.
4)
Continued focus is being placed on the upcoming trade talks with China. This is expected to spark potential market support as the need to supply China remains evident, but a strong agreement will be needed in order to secure the desire for China to return to the U.S. for more of its pork supplies.
4)Larger-than-expected hog supplies as of Sept. 1 on Friday's Hogs and Pigs report is expected to create confirmation of the abundant availability of pork yet to hit the production system. This is likely to erode previous support through the complex.


#completeherdhealth

Friday, September 27, 2019

Friday Closing Livestock Market Summary - Cattle Futures See Gains

GENERAL COMMENTS:
Active gains moved into cattle futures Friday afternoon. The continued active commercial interest, combined with technical buying signals developing through the end of the week, sparked widespread market interest. Hog futures eroded in late-week trade as traders focused on the afternoon USDA Hogs and Pigs report. Increased hog inventory is expected to add further weakness to the lean hog complex next week. From Friday to Friday, livestock futures scored the following changes: Oct live cattle, up $5.68; Dec live cattle, up $5.43; Oct feeder cattle, up $4; Nov feeder cattle, up $5.95; Oct lean hogs, up $4.93; and Dec lean hogs, up $3.60. Corn futures slipped slightly in limited late-week trade with December closing down 1 cent. Stock markets tumbled Friday on impeachment talks, with the Dow down 128 points and the NASDAQ down 121 points.

CASH MARKETS
Cash cattle trade developed over the last two days with prices $2 to $5 per cwt higher than last week. Light to moderate trade in the North Thursday started the ball rolling with dressed trade at $165 per cwt. This is generally $3 per cwt higher than last week and signaled underlying support in all areas. Trade continued to filter into the market during the day Friday with most trade in the South seen at $103 per cwt, a $2-per-cwt gain from last week. Live trade in the North was the last to join the party, pushing prices to $106 to $107 per cwt, a $4- to $5-per-cwt rally. The increased cash market momentum seen through the day was stimulated by aggressive futures market trade, which helped to focus on potential market growth over the coming weeks. The National Daily Direct afternoon hog report was $0.60 lower ($43-$50.50, weighted average $48.39) with total volume reported at 6,635 head.

LIVE CATTLE
Futures closed $0.10 lower to $2.07 higher. The combination of increased cash cattle prices developing Friday and technical market shifts sparked triple-digit gains in all nearby live cattle trade. This pushed prices to their highest levels since early August and is narrowing the gap with August highs. The firm momentum is expected to be the focus early Monday as traders try to defend current gains and expand markets further through the end of the month. As prices continue to distance themselves from summer lows set in August, sights are being set on additional strong fall support. Traders are looking for supplies of market-ready cattle to ease over the coming weeks, giving credibility to both short- and long-term bullish market support possible. Beef cutouts: lower, down $0.53 (select, $189.86) and down $0.93 (choice, $212.58) with moderate demand and offerings, 102 loads (54 loads of choice cuts, 21 loads of select cuts, 8 loads of trimmings, 19 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL
Futures closed $2 lower to $1.52 higher. Triple-digit gains developed in all but the lightly traded September 2020 contract. The strong support sweeping through live cattle futures has spilled over to the rest of the cattle trade. Friday's move pushed spot-month October above July highs, sparking increased technical support and breaking the feeder cattle complex out of its two-month-long sideways trend. CME cash feeder index for 9/24 is $140.03, up $0.23.

FEEDER CATTLE
Futures closed off $0.07 to up $0.65. The feeder cattle market has been the steady token this week, and with a bump in dressed cattle prices, it wouldn't be unlikely to see feeder cattle end the week stronger -- not to mention last week's Cattle on Feed report clearly indicated (with fewer placements moved last month) that there are plenty of cattle feeders to be dispersed this time around. The CME feeder cattle index for 9/25/19 stands at $141.13.

LEAN HOGS
Futures closed $1.10 lower to $1.05 higher. Firm pressure developed Friday in all but the spot-month October contract. The firm support in the lightly traded October contract continues to hold, while all other futures contracts were under strong pressure on the lack of new developments with China trade talks and concern that softness early next week will further pull prices away from the recent bounce seen during the week. The quarterly USDA Hogs and Pigs report showed a 3% increase in total inventory to 77.7 million hogs as of Sept. 1. This is also a 3% increase from June inventory. The current inventory is the highest for Sept. 1 since current records started in 1998. The increase will likely have a bearish impact on trade early next week. Although farrowing intentions from December through May are expected to remain stable, the current supply will likely keep prices under pressure over the near future. Pork cutouts posted strong gains Friday. Pork cutout values added $1.25 per cwt, moving to $73.26 per cwt on 229 loads. CME cash lean index for 9/25 is $54.72, up $0.05. DTN Projected lean index for 9/26 is $55.34, up $0.62.

MONDAY'S CASH HOG CALL

Steady to $1 higher. Despite the late-week pressure, cash markets are expected to remain steady to higher with packers still taking advantage of strong margins and the expectation that available supplies will continue over the near future. Monday slaughter numbers are expected at 483,000 head. 


#completeherdhealth

Friday Midday Livestock Market Summary - Highest Cattle Trade Since Early August

General Comments

Wrapping up the week with midday gains in most of the livestock sector. Cattle contracts are seeing nearby gains of $1.72 in October live cattle, and gains of $1.42 in November feeder cattle. Lean hogs are absorbing some of the energy from cattle contracts yet are fighting a steady, sideways midday market that has near $1 losses on National Direct Morning Hog Report but gains of $1.56 in cutout values. December corn is down 1 3/4 cents per bushel. The Dow Jones Industrial Average is down 8.58 points and NASDAQ is down 45.39 points.

LIVE CATTLE
December live cattle opened Friday at $108.85 and have since surged to $110.05. Earlier the Dow Jones reported that since live cattle hit the yearly low in September, the December cattle contract has seen prices rise nearly 9.5%.

Cash trade has been reported in parts of Kansas and Texas at $103, $2 higher than last week's weighted average. It's likely to see more sales trickle in throughout the day, though the precedence has been set in that area. A light to moderate trade took place in parts of Nebraska and Iowa yesterday with dressed trade at mostly $165, $3 higher than last week's weighted average basis in Nebraska. Trade volume totals look a little light in parts of Nebraska and we need to see a little bit more trade in those parts especially in the Eastern part of Nebraska. Some asking prices remain firm around $104 to $105 in the South, and $167 to $170 in the North.

Midday boxed beef prices are lower: choice down $0.25 (213.26), select down $0.61 ($189.78). Boxed beef movement is slightly lower that Thursday offering 65 loads total (32.29 loads of choice cuts, 14.93 loads of select cuts, 7.03 loads of trim and 11.22 loads of ground beef).

FEEDER CATTLE
November feeder cattle opened Friday at $143.40 and have climbed to $144.07 since. Nearby and deferred contracts are all seeing positive gains with the biggest gain being in the November contract. Supported by live cattle gains on both the cash front and future's demeanor, feeder cattle contracts are sitting in a good place.

LEAN HOGS
Lean hog contracts, though hesitant, are reciprocating the energy building in the cattle sector. It's undetermined where the market will wrap up the week, with positive influences from both the future's board and cutout values but followed by close trailing lower National Direct Morning Hog prices that cripple some of the support strength.

Friday's USDA Quarterly Hogs and Pigs Report is anticipated by analysts to reveal the following projections: breeding herd 101.4%, market hogs 103.0%, total inventory 102.8%, June-August pig crop 102.4%, June-August pigs per litter 103.6%, June-August farrowings 101.6%, September-November farrowing intentions 100.6% and December-February farrowing intensions 100.5%.

The projected lean hog index for 9/26/19 is $55.34 up $0.62, and the actual lean hog index for 9/25/19 came out at $54.72 up $0.05. Prices are $0.98 lower on the National Daily Morning Hog report with a weighted average of $48.01, ranging from $47.50 to $49.50, on 3,914 head sold with a five-day rolling average of $46.71. Pork cutouts totaled 129.94 loads, with 118.22 loads of pork cuts and 11.72 loads of trim. Pork cut values came in $1.56 higher at $73.57. 


#completeherdhealth

Friday Morning Livestock Market Summary - Buyers Move Into Livestock Trade

GENERAL COMMENTS

Moderate to strong gains have quickly moved back into all livestock trade Friday morning. The continued movement in live cattle futures is focusing on the underlying support in cash cattle trade developing during the week with increased long-term support sparked that cattle supplies are expected to tighten over the coming months. Hog futures has regained previous week momentum, although current volume remains extremely limited at this point. Corn prices are lower in limited early trade. Stock markets are mixed. Dow Jones is 20 points higher with NASDAQ down 38 points.

LIVE CATTLE:
Open: 40 to 80 cents higher. Strong underlying support is moving into live cattle trade. Although limited moves may continue to develop through the end of the week as prices have backed away from initial market moves, the focus will be driven as increased cash cattle trade is seen. Cash cattle trade is starting to develop early Friday morning following trade in the North Thursday which pushed prices higher. Limited to moderate trade is reported in Texas Friday morning at $103 per cwt. This is $2 per cwt higher than last week, and confirms price gains in both North and South for the week. It is likely that the current trade may be able to set the tone for the rest of the week with prices $2 to $3 per cwt higher. Open interest Thursday fell 68 positions (323,813). Spot month October contracts fell 2,705 positions (41,254) and December contracts slipped 218 positions (140,440). DTN projected slaughter for Friday is 116,000 head.

FEEDER CATTLE:
Open: Steady to 60 cents higher. Light buyer support has slowly returned to the feeder cattle complex. The underlying support in live cattle trade has helped to spark additional follow through momentum in feeder cattle trade. This may bring additional bullish market momentum through the end of the week, despite limited overall volume expected through the end of the week. Cash index for 9/25 is $141.13, up 1.10. Open interest Thursday fell 659 positions (45,043).

LEAN HOGS:

Open: Steady to $1 Higher. Moderate to firm gains have quickly flooded into lean hog futures with spot month October contracts leading the complex higher with 80 cent gains. The focus on continued buyer support based on long term buying from China has redeveloped despite a slow couple of days, but the expectations of continued sales to China over the near future is expected to develop over the near future. Cash hog trade is called steady to $1 higher. Bids are evenly scattered through the range. Open interest added 901 positions (260,840). October fell 1,259 positions (22,554) and December added 681 positions (100,634). Cash lean index for 9/25 is $54.72 up 0.05. DTN projected slaughter for Friday is 485,000 head. Saturday runs have increased to 287,000 head.


#completeherdhealth

Thursday, September 26, 2019

Thursday Closing Livestock Market Summary - Cattle Contracts Staged Gains, While Corn and Lean Hogs Lag Behind

GENERAL COMMENTS:
Thursday morning opened to a scatted and undecisive livestock complex, but as time rolled on and trading closed cattle futures rallied, while corn and lean hog markets couldn't jump on board. December corn closed down 1 3/4 cents per bushel. The Dow Jones Industrial Average is down 79.59 points and NASDAQ is down 46.72 points. The rest of the cash cattle trade will likely take place Friday afternoon, rallying the same gains that Thursday brought forth.
LIVE CATTLE
Futures closed mixed up $0.27 to off $0.15. Thursday morning wasn't promising but low and behold the board closed primarily with gains and the country side took off! Dressed cattle in parts of Nebraska and Iowa took a win Thursday afternoon, selling for $165 -- $3 higher than last week's weighted average. While the rest of cattle country remains quiet, a stronger close and higher cash cattle prices will likely entice the rest of cash cattle to follow suit sometime Friday. Boxed beef cutouts closed mixed: choice down $1.12 ($213.51) and select up $0.56 ($190.39), with moderate demand and offerings (86.95 loads of choice cuts, 25.06 loads of select cuts, 6.60 loads of trim and 16.14 loads of ground beef).
FRIDAY'S CASH CATTLE CALL
Steady. With $3 gains standing in the countryside, it's unlikely that packers will give much more in a week's time, and feedlots won't argue.
FEEDER CATTLE
Futures closed off $0.07 to up $0.65. The feeder cattle market has been the steady token this week, and with a bump in dressed cattle prices, it wouldn't be unlikely to see feeder cattle end the week stronger -- not to mention last week's Cattle on Feed report clearly indicated (with fewer placements moved last month) that there are plenty of cattle feeders to be dispersed this time around. The CME feeder cattle index for 9/25/19 stands at $141.13.
LEAN HOGS
Futures closed predominantly lower, up $0.05 to off $1.22. Nearby contracts suffered more than deferred, but all in all Thursday's close could have been far worse. Pork cutout: up $1.60 at $72.01. The National Daily Afternoon Hog Report closed $0.83 higher, ranging from $42.00 to $52.00 with a weighted average of $48.99. The CME lean hog index for 09/24/2019 came to $54.67. In the case of lean hogs, nearby and deferred contracts opened much better than they settled.
FRIDAY'S CASH HOG CALL
$1 higher. With cutout prices higher, trade deals being made and a disease outbreak in South Korea, domestic lean hog prices are bound for a price bump.

#completeherdhealth

Thursday Midday Livestock Market Summary - Weaker Livestock Market

General Comments
With the only livestock contract standing tall and reading green being feeder cattle, it's fair to say that this Thursday (as of midday) hasn't been the day of livestock trade. There are several key factors that could turn trade around after the noon hour if traders still have interest 1) Boxed beef cutouts values are mixed, and pork cut values are strong, 2) Cash cattle have yet to trade and asking prices are still higher than last week indicating that feeders plan to stick their heels in the ground, 3) Corn prices are dwindling.
LIVE CATTLE
December live cattle opened Thursday at $108.450 and have since then given up $0.05 to $108.40. As the board shows signs of mixed direction, packer's see this as a perfect opportunity to place some countryside bids. Bids of $161-162 have been placed in Nebraska, and bids of $100 have been established in Texas. It's doubtful that significant trade will take place until more time passes, and potentially not until sometime Friday. Asking prices of $104 to $105 still stand in the South, and $170 in the North.
Midday boxed beef cutouts are mixed with choice down $0.73 ($213.90) and select significantly up $1.10 ($190.93). Thursday's moved boxed beef movement presented 71 loads total (38.31 loads of choice cuts, 15.94 loads of select cuts, 5.42 loads of trim and 11.64 loads of ground beef).
FEEDER CATTLE
Feeder cattle have chosen to take a different route Thursday compared to the other livestock contracts. October feeder cattle opened Thursday morning at $142.50 and have since then gained support and moved upward to $143.20. Depending on how the rest of the contracts trade Thursday afternoon and how cash cattle pan out, will largely influence on whether or not feeder cattle keep their upward momentum.
LEAN HOGS
Thursday's December lean hog contract opened at $71.25 and has since then backed off to $70.55. With stronger cutout prices, the uncertainly of South Korea's African swine flu situation and a weakening corn contract, one would except lean hogs to be on the upward roll, but instead the market retracks.
The projected lean hog index for 9/25/19 is up $0.05 at $54.72, and the actual lean hog price for 9/24/19 was down $0.15 at $54.67. Prices are up again Thursday on the National Direct Morning Hog Report, up $0.66, at a weighted average of $48.82, ranging from $42.00 to $52.00, on 6,121 head sold with a five-day rolling average of $46.02. Pork cutouts totaled at 165.92 loads, with 136.89 loads of pork cuts and 29.04 loads of trim. Pork cutout values came in $1.45 higher at $71.86.


#completeherdhealth

Thursday Morning Livestock Market Summary - Growing Demand Support Draws Buyers

GENERAL COMMENTS:
Packer interest is expected to become more active as the day progresses Thursday, although at this point, it is uncertain if active trade will develop Thursday or be held over to Friday. Asking prices remain firmly planted at higher levels of $104 to $105 live basis in the South and $170 in the North. The expectation is that any initial bids in the market will be a far cry from current asking prices, leaving a strong gap for negotiations to fill over the next couple of days. Overall market-ready cattle supplies appear to be starting to tighten from the previous week's levels, although it will still be some time before packers see enough of a pinch in supplies in order to actively negotiate access to cattle. With the end of September quickly approaching, it is also uncertain just how active packers will be given increased contract deliveries set for early October. Futures trade is expected to focus on the uptick in the complex as traders continue to focus on expected short and long-term demand building through the complex while expanding the bullish market trend in the last two weeks. December futures have currently rallied $9.50 per cwt above August lows, as increased fundamental support also helping to stimulate technical gains.
Strong renewed support has moved into the lean hog complex through the week with increased bullish market expectations being built as traders focus on the potential for increased China trade to develop. Reports continue to circulate of China in the market to purchase as much as 100,000 metric tons of pork. This helped to stimulate additional buying activity. An announcement by Chinese ministry spokesman that Chinese buyers have "completed deals to buy soybeans and pork of considerable scale" should continue to spark positive support in nearby contracts. Cash hog values are expected steady to $1 per cwt higher, with most bids expected steady to 50 cents higher. Expected slaughter Thursday is at 487,000 head. Saturday runs are expected near 258,000 head.
BULL SIDEBEAR SIDE
1)
The trade agreement with Japan continues to be an underlying bullish market shift for beef demand through the end of the year. Although this agreement will have more of a long-term impact rather than immediate price relief, it continues to help grow the movement of beef products to global markets with reduced tariffs.
1)
Beef values have continued to struggle through the week with limited support the last couple of days. This suggests that some wholesale market pressure may continue to develop despite firm futures gains in order to regain active retail product movement.
2)
Strong underlying support in live cattle futures should help to stimulate higher cash cattle trade through the end of the week. Given the expectations that cattle supplies will continue to tighten in the near future, upward cash movement is likely to become more evident and common.
2)
Feeder cattle futures have been unable to maintain the level of buyer support in live cattle trade. Although underlying support is still developing, the expectation that additional cattle numbers are moving to market over the coming weeks will likely limit the upside market support.
3)
The announcement by a Chinese spokesman Thursday that China has completed purchases of "considerable amounts" of pork and soybeans is helping to stimulate additional support to the entire lean hog complex.
3)
Deferred lean hog futures have been unable to keep pace with the recent and aggressive gains in nearby lean hog futures. This continues to signal market uncertainty surrounding continued market growth. Much of this market hesitancy is based on lack of a long-term trade agreement with China.
4)
Even though the trade deal with Japan has the most focus on beef, the impact of lower tariff levels will also help to stimulate additional pork supplies. Japan is a major importer or U.S. pork, and this is expected to spark additional movement of pork to Japan.
4)Strong market gains through the week are opening the door for a light-to moderate market correction. With the lean hog market so dependent on headlines over the last few months, overall market support is only as strong as the next news release concerning China trade deal talks.


#completeherdhealth

Wednesday, September 25, 2019

Wednesday Closing Livestock Market Summary - Livestock Futures Rise on Widespread Buying Interest

GENERAL COMMENTS:
Strong buyer support developed in both cattle and hog trade Wednesday. Nearby hog futures led the complex higher as reports of China pork purchases continue to stimulate short-term trade expectations, along with hopes that a trade deal will be reached in October meetings between the U.S. and China. Beef values gained momentum as the first round of a Japan trade agreement was finalized, focusing on growing beef movements. The lack of packer movement in cash cattle trade midweek is indicating another late week of trade. Even though asking prices have remained and are holding at $104 to $105 in the South and $170 dressed in the North, the lack of even initial token bids from packers is creating some concern about overall cash market improvement despite futures gains. Uncertainty of how many cattle need to be bought in negotiated trade before the end of the week leading into early October is adding some additional cash market instability. It is expected that at least light to moderate trade will be needed in all areas before the end of the week, but where initial bids start over the next couple of days could set the tone for weekly trade. The National Daily Direct afternoon hog report was $1.98 higher ($40-$51, weighted average $47.95) with total volume reported at 13,671 head. Corn prices remained mixed Wednesday with December down 1/2 cent. Stock markets were higher in light trade with the Dow up 162 points and the NASDAQ up 83 points.
LIVE CATTLE
Futures closed $0.25 to $1.07 higher. Despite wavering early trader interest, support moved into nearby live cattle trade later in the session. The December contract led the complex higher, now looking to regain early August losses as traders focus on demand support and the potential that the number of market-ready cattle could slip over the coming weeks. The announced signing of a trade deal with Japan brought limited fanfare to the market, but it did help to create confidence that additional U.S. beef will move into Japan, which will help the short- and long-term demand outlook. Beef cutouts: mixed, up $0.17 (select, $189.83) to down $0.76 (choice, $214.63) with moderate demand and moderate to heavy offerings, 172 loads (76 loads of choice cuts, 41 loads of select cuts, 16 loads of trimmings, 39 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL
Steady. Limited market activity is expected early Thursday morning, although packer interest is expected to improve slightly despite being silent the first half of the week. Late-Friday trade is a strong possibility as feeders are not likely to quickly budge from current asking prices.
FEEDER CATTLE
Futures closed $0.32 to $1.05 higher. Despite early uncertainty and an attempt by traders to cover positions Wednesday morning, buyer interest returned to most feeder cattle trade later in the session. Support was most evident in early 2020 contract months with traders looking for increased beef demand during the first half of next year. The announcement that a trade deal with Japan is being signed is supportive for the beef complex both in the short term and long term, and helped to stabilize the market. CME cash feeder index for 9/24 is $140.03, up $0.23.
LEAN HOGS
Futures closed mixed, $0.25 lower to $2.57 higher. Aggressive support moved into lean hog futures as traders focused on reports China will be buying more U.S. pork products. Although no specific numbers can be confirmed at this point, the hope is that overall Chinese imports of U.S. pork will continue to grow. However, to this point, Europe has been the main beneficiary of pork exports to China. It is likely that additional buying will be seen in the next couple weeks leading up to early October trade talks in Washington. Any pork purchases are likely to be viewed as a "good will" gesture in order to gain momentum and hopefully progress in establishing a trade deal. Pork cutouts firmed on aggressive gains in picnic and belly cuts. Pork cutout values added $0.67 per cwt, moving to $70.41 per cwt on 336 loads. CME cash lean index for 9/23 is $54.82, down $0.31. DTN Projected lean index for 9/24 is $54.67, down $0.15.
THURSDAY'S CASH HOG CALL
Steady to $1 higher. Continued support through the futures trade and expected additional late-week gains are helping to solidify cash market support. Most bids are expected steady to 50 cents higher despite expected active weekend plant activity. Thursday slaughter numbers are expected at 478,000 head. Saturday runs are expected at 258,000 head.


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Wednesday Midday Livestock Market Summary - Positive Movements

General Comments

Though the market opened with mixed signals Wednesday morning, it's taken a turn for a positive midday outlook with live cattle, feeder cattle, lean hog and corn contracts all seeing noteworthy gains at the noon hour. December corn is up 1/4 cent at midday. The Dow Jones is up 150.56 points and the NASDAQ is up 30.56 points.

LIVE CATTLE
Thus far the week has been relatively quiet for live cattle contracts however it feels like the market may be at turning point in the week with confirmation of higher boxed beef prices and though untouched, higher cash cattle asking prices. Asking prices of $104 to $105 remain in the South, and $170 dressed in the North. December's live cattle contract opened Wednesday at $107.52 and has since then trekked upward to $108.02. Nearby and deferred are sharing the same energy.
Boxed beef cutouts at midday are higher with $0.31 gains on choice ($215.70) and $0.72 gains on select ($190.38). Wednesday's boxed beef movement is higher with 95 loads total (37.08 loads of choice cuts, 23.04 loads of select cuts, 9.13 loads of trimmings and 25.84 loads of ground beef).
Wednesday's Fed Cattle Exchange offered 1,533 head of cattle from Nebraska, Colorado, Texas, and Kansas, asking price was $104, no lots sold.

FEEDER CATTLE
Feeder cattle markets have responded similarly this morning with all nearby and deferred contracts finding significant support. October's feeder cattle contract opened Wednesday at $141.75 and has since then moved to $141.85. Whether the week will subside with gains or losses is yet to be known, but with midday support building, cash cattle untouched and strengthening boxed beef prices, the stars are aligning for a positive undertone.

LEAN HOGS
The worry of African swine fever continues to circulate as late Tuesday evening South Korea confirmed their fifth case of the disease. Since last week South Korea has culled 22,000 pigs but identifying the source of the outbreak continues to be the unknown. All that aside, lean hog contracts are finding more and more support as the day trails on. The December lean hog contract opened Wednesday at $70.00 and has since then moved slightly to $70.67.

The projected lean hog index for 9/24/19 is expected to be $54.67 down $0.15 and the actual lean hog price for 9/23/19 came in $0.31 lower at $54.82. Pork cutouts came in at 172.42 loads total, with 153.20 loads of pork cuts and 19.23 loads of trimmings. Pork cutout values are higher Wednesday up $1.17 at $70.91. Prices are higher Wednesday on the National Direct Morning Hog Report, up $0.78 at a weighted average of $46.75, ranging from $40.00 to $50.00, on 7,631 head sold with a five-day rolling average of $45.25. 


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Wednesday Morning Livestock Market Summary - Limited Midweek Activity Expected

GENERAL COMMENTS:

The focus on feedlot managers pushing for higher cash cattle prices following futures market support and a break higher in prices last week is evident with increased asking prices. But as of yet, bids have yet to be developed, which may limit optimism through the midweek session. A few token bids may be seen Wednesday, although at this point, it is unlikely that active cash market movement will develop until later in the week given the sideways moves expected in futures trade and limited support in beef values. Futures trade is likely to be mixed with limited direction developing. The inability to sustain early week support could lead to a moderate price shift lower through the end of the week as traders adjust to the current trading range with limited additional market news or direction expected through the week.

Underlying support is starting to become more evident in lean hog trade through the week with firm gains developing over the last two trading sessions as prices move to $62 per cwt in October futures while December futures have advanced above $69 per cwt. The potential that China will purchase pork is helping to motivate additional buyer interest, which had previously remained out of the market over the recent weeks. Confirmation of active sales to China will not only help to spark increased short-term buying, but will also create additional expectations that a trade deal may be developing and push prices higher in deferred contracts also. Cash hog values are expected to be steady to $1 per cwt higher, with most bids expected steady to firm. Expected slaughter Wednesday is at 484,000 head. Saturday runs are expected near 254,000 head.


BULL SIDE BEAR SIDE
1)
Cattle feeders appear to be expecting additional cash market support through the week as elevated asking prices are showing up. Asking prices of $104 to $105 live in the South and $170 dressed in the North create a target for higher weekly cash price levels.
1)
Wholesale beef values have continued to erode, limiting underlying support despite recent cash and futures market support. The inability to hold beef values stable may limit the potential for renewed buyer support in nearby futures trade during early October.
2)
Feeder cattle futures have been able to hold onto early week gains. This focus is helping to solidify additional buyer support through the entire feeder cattle complex, with potential commercial support moving into the complex over the near future.
2)
Despite long-term beef cattle tightness expected through the end of the year and early 2020, the focus on ample market-ready cattle available at packer disposal may still limit short-term support through the complex.
3)
Active negotiated cash hog trade developed Tuesday with over 22,000 head sold as prices moved higher. This is over double the typical daily negotiated trade totals and evidence that packers are gaining increased market access at higher prices.
3)
Despite the recent optimism surrounding China, the road to a trade deal could still be long and winding, given both sides have fundamental differences that neither side appears willing to give in on.
4)
The potential that pork trades to China are developing, or in the works, is sparking underlying buyer support in most lean hog trade. This could stimulate gains if sales are confirmed the next few days.
4) Active plant speeds have helped to keep the hog market current, but the concern of increasing overall pork demand in order to clear product from freezers continues to be the main focus through the end of the year. This may limit long-term price support if active long-term China sales do not develop over the coming weeks and months.


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Tuesday, September 24, 2019

Tuesday Closing Livestock Market Summary - Cattle Futures Close Mixed

GENERAL COMMENTS:
Hog futures continued to find willing buyers Tuesday with nearby trade focusing on the potential for China buying support. Although no official news of pork trade has yet been seen, traders anticipate additional sales to China will help stimulate market support. Cattle trade remained stuck in a narrow range Tuesday on a combination of follow-through buying and limited position-taking following Monday's rally. Cash cattle markets remain quiet with bids unavailable Tuesday afternoon. This is not unexpected, as most bids may be delayed until sometime Wednesday or later. Asking prices have slowly developed through the day with cattle initially priced at $104 to $105 per cwt live basis in the South and $170 dressed in the North. Feedlot managers seem to remain comfortable elevating asking prices given the recent support in futures trade and tighter supplies from last week's Cattle on Feed report. But the uncertainty about how many cattle packers need to fill early October needs could keep cash markets delayed until late in the week. The National Daily Direct afternoon hog report was $1.29 higher ($39-$48, weighted average $45.88) with total volume reported at 22,934 head. Corn prices continued higher Monday despite limited activity with December closing up 1 1/2 cents. Stock markets are lower, giving back initial gains despite light trade. The Dow closed 154 points lower with the NASDAQ down 112 points.

LIVE CATTLE
Futures closed mixed, $0.27 higher to $0.35 lower. Livestock traders needed more time to ruminate on Monday's triple-digit rally as the focus moved away from cattle numbers and cattle placements to upcoming supply and demand of beef. Most traders showed limited interest in Monday's USDA Cold Storage report with prices bouncing on both sides of unchanged through most of the session. After nearby contracts reached their highest level since early August, their next move will depend on whether there is enough support to continue pushing contracts higher, or if uncertain fourth-quarter beef demand and still-strong supplies will once again limit market momentum. It is uncertain whether any clear answers will be revealed through the rest of the week as outside markets may be the biggest attraction to cattle traders. Beef cutouts: lower, down $1.18 (select, $189.66) and down $1.06 (choice, $215.39) with moderate demand and heavy offerings, 136 loads (63 loads of choice cuts, 39 loads of select cuts, 18 loads of trimmings, 16 loads of coarse grinds).

WEDNESDAY'S CASH CATTLE CALL
Steady. Despite limited asking prices, the direction of cash business remains undeveloped, as bids may not be seen until midweek or later. This could put more emphasis on wholesale beef market direction and futures shifts in the next couple of days.

FEEDER CATTLE
Futures closed $0.35 lower to $0.75 higher. Traders returned Tuesday morning much less optimistic after Monday's triple-digit gains. Although the focus remains on tighter cattle supplies going into next year, the lack of incentive for buyers to actively move into the complex could lead to a sideways trading range through the end of the month. CME cash feeder index for 9/23 is $139.80, up $0.12.

LEAN HOGS
Futures closed $0.20 lower to $1.05 higher. Firm support redeveloped in nearby lean hog futures trade Tuesday morning, on continued hopes that China will purchase more U.S. ag products ahead of planned trade talks between the two countries in October. Although most of the focus and news chatter has been about possible soybean sales, the expectation is that pork sales will not be far behind due to China's need to fill its pork demand. Deferred futures lost their early week momentum as traders view the latest developments as more short-term focused, with long-term questions still to be answered by a potential trade agreement. Pork cutouts shifted lower on widely mixed primal values. Pork cutout values fell $0.44 per cwt, moving to $69.74 per cwt on 386 loads. CME cash lean index for 9/20 is $55.13, down $0.67. DTN Projected lean index for 9/23 is $54.82, down $0.31.

WEDNESDAY'S CASH HOG CALL

Steady to $1 higher. Futures gains and packers searching to fill aggressive plant output have led to steady-to-firm hog markets midweek. Most bids are expected to remain steady to 50 cents higher, although limited long-term direction is still expected. Wednesday slaughter numbers are expected at 486,000 head. Saturday runs are expected at 254,000 head.

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