GENERAL COMMENTS:
Last week lean hog contracts shined, rallying all throughout the week and having enormous support through the cash market. Even though the cash market still closed sharply higher Monday, the board's support was lacking. Meanwhile, the cattle contracts rallied throughout Monday and the cash cattle market is hopeful to move this week's market higher. Hog prices jumped through the roof this afternoon on the National Direct Afternoon Hog Report, up $4.94 with a weighted average of $57.84 on 9,607 head. December corn is up 1 cent per bushel and December soybean meal is down $2.60. The Dow Jones Industrial Average is up 327.69 points and NASDAQ is up 203.11 points.
LIVE CATTLE:
Successfully closing higher Monday afternoon, the live cattle complex looks to the rest of the week, hopeful for strong trade. October live cattle closed $1.35 higher at $106.87, December live cattle closed $1.80 higher at $111.70 and February live cattle closed $1.37 higher at $115.70. As the spot October contract reaches a new high for the month, feeders see an opportunity to not only price cattle higher this week but to also take back some leverage. As such, Monday's cash cattle trade was at a standstill as asking prices have yet to be established and packers know that feeders are going to be pushing hard for a stronger week. Monday's slaughter is estimated at 120,000 head -- not comparable to a week ago because of Labor Day, but that's 1,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $2.68 ($217.21) and select up $0.66 ($207.76) with a movement of 149 loads (94.42 loads of choice, 19.03 loads of select, 18.27 loads of trim and 17.32 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher. With showlists lighter and the board rallying, there's a good chance that feeders move this week's market slightly higher.
FEEDER CATTLE:
Feeder cattle contracts climbed higher Monday, adding at least $1.50 to each contract if not more. September feeders closed $1.50 higher at $141.50, October feeders closed $2.02 higher at $142.60 and November feeders closed $1.87 higher at $143.20. Monday's close puts the feeder cattle market only $0.45 shy of the 40-day moving average of $141.95. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to two weeks ago, feeder steers sold steady to $2.00 higher and feeder heifers sold steady to $3.00 higher. Again, there was special interest in load lots of yearlings and one specific group that stood out was a single consignment of 800 yearlings. Even though the cash market was lower last week, with the strong interest from traders, buyers were a lot less apprehensions about buying as they see strength in the current market. The CME feeder cattle index 9/11/2020: up $0.48, $141.47.
LEAN HOGS:
The lean hog complex closed lower, fighting downward pressure after the complex shot higher all last week. October lean hogs closed $1.95 lower at $64.62, December lean hogs closed $2.42 lower at $63.57 and February lean hogs closed $0.72 lower at $68.75. The fact remains that there's export opportunity for U.S. pork, but the questions of when, how much and from whom remains unanswered. With so much intensity sitting on the marketplace from a robust cash market, hopefulness in the export sector and lavish gains on the board, the complex could be subject to some volatility until the fine details are understood. Pork cutouts total 312.76 loads with 280.31 loads of pork cuts and 32.45 loads of trim. Pork cutout values: down $1.54, $79.71. Monday's slaughter is estimated at 486,000 head, not comparable to a week ago because of Labor Day but that's 4,000 head less than a year ago. Saturday's hog slaughter was revised to 403,000 head, putting the new week to date at 2,323,000 head. The CME lean hog index 9/10/2020: up $0.84, $63.28.
TUESDAY'S CASH HOG CALL: Higher. Packers show no sign of weakening as they see the same potential ability to export as the rest of the marketplace does.
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