Cattle contracts have welcomed Wednesday's market with moderate gains in both the live cattle and feeder contracts while the lean hog market struggles. As Wednesday's session continues, more questions start to surface. Why are fat cattle trading early in the week with the board showing signs of strength and knowing that the Cattle on Feed Report doesn't come out until Friday afternoon? One would think that cattlemen, well knowing that they are in no rush to sell cattle because of increasing carcass weights and knowing that packers are profiting off of the growing boxed-beef values, would gravitate to their perpetual rewarding system of waiting to trade cattle later in the week. Pour another cup of coffee, dust your eyeballs and keep watching, because this week, though assumed to be uninteresting, has some strange moving parts. December corn is down 1 1/2 cents per bushel and December soybean meal is up $1.30. The Dow Jones Industrial Average is up 13.13 points, and the NASDAQ is up 1.32 points.
LIVE CATTLE
Wednesday's live cattle board has shaped up to be something noteworthy. The board continues to ping as more and more interest grows in the December and early 2020 contracts. December live cattle are capturing the highest gains at $115.20, up $1.50, and all other contracts have positive support ranging from $0.02 to $1.10.
A string of cattle have been reported sold in eastern Nebraska at $109 live, about $1.00 lower than last week's weighted average. A few live deals have been reported in Kansas also at $109, $1.00 higher than last week's weighted average. Most asking prices remain firm around $110 plus in the South and $178 in the North. The Fed Cattle Exchange Auction reported 231 head of cattle Wednesday, with 1 lot in Kansas and Texas each. Asking prices were at $105, but quickly ticked higher on the Texas lot of 131 head they sold at $109. The Kansas lot of 100 head was bid at $105, but the offer was passed. It will be interesting to see if more trade picks up early this week or waits for the Cattle on Feed Report to come out before most of the action takes place. If Wednesday can close with the gains the market currently has, good things could be in store for the cash market.
Midday boxed beef cutouts are higher: choice up $2.46 ($223.39) and select up $0.50 ($198.50). Wednesday's midday boxed beef movement totals only 69 loads (26.80 loads of choice cuts, 23.08 loads of select cuts, 3.94 loads of trim and 14.70 loads of ground beef).
FEEDER CATTLE
Strong gains have been captured in the feeder cattle market with all contracts securing $0.80 to $1.10 gains. November feeder cattle are up $0.90 at $144.40, and the most market interest has shifted from the November live cattle contract to the January 2020 contract.
LEAN HOGS
Not every market can be a Wednesday winner, as the lean hog sector struggles to find support. At some point, the tide will change and the losses from the disease outbreak will help support the domestic lean hog market, but until there is a trade deal with China and export opportunity, the market sits. The December lean hog contract is the only contract trading higher, up $0.20 at $65.70, while the months of February, April, May and June 2020 take the biggest losses -- down $1.30 to $1.80.
The projected lean hog index for 10/22/19 is $65.72, up $0.25, and the actual lean hog index for 10/21/19 is $65.47, down $0.05. Prices are lower on the National Direct Morning Hog Report, down $0.64 with a weighted average of $55.21, ranging from $51.00 to $56.01 on 7,535 head sold and a five-day rolling average of $56.45. Pork cutouts totaled 170.26 loads with 143.36 loads of pork cuts and 26.90 loads of trim. Pork cutout values are down $0.32 at $75.78.
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