General Comments
Cattle contracts are continuing to trend higher and are soaking up the support that was absent in the earlier part of the week. The lean hog market is suffering from some disappointment in Thursday's export report as the market was hoping to see the report unveil that demand was far beyond the last couple of week's usual trade. Cash cattle trade is still mostly quiet, as feeders are pushing for higher prices again this week.
December corn is down 5 cents per bushel and December soybean meal is down $8.10. The Dow Jones Industrial Average is up 147.16 points and NASDAQ is up 110.80 points.
LIVE CATTLE
Along with higher prices across the futures market, come bids from packers! October live cattle are up $0.37 at $107.52, December live cattle are up $0.40 at $111.60 and February live cattle are up $0.27 at $115.07. Bids are starting to surface as packers have offered bids of $103 and $163 in Nebraska, $105 in Iowa and $103 in Texas. Feeders have yet to pull the trigger and let trade begin, and it wouldn't be surprising if packers have to work on those prices a little bit more before feeders become interested. Feeders are going to push packers using stronger boxed beef prices as a talking point and know full-heartedly that their showlists are current so there's room to roll cattle over to the next week if the need arises. Asking prices are around $106 to $108 in the South, and $167 plus in the North.
Beef net sales of 18,000 mt reported for 2020 were up 26% from the previous week and 36% from the prior four-week average. The three primary increases were from Japan (4,500 mt, including decreases of 500 mt), South Korea (4,500 mt, including decreases of 400 mt) and China (3,400 mt).
Boxed prices are higher: choice up $1.71 ($217.58) and select up $0.59 ($208.19) with a movement of 75 loads (45.22 loads of choice, 10.75 loads of select, 3.42 loads of trim and 15.38 loads of ground beef).
FEEDER CATTLE
Continued weakness in the corn market and trader interest developing throughout the cattle complex has allowed for feeder cattle contracts to scale modestly higher. October feeders are up $0.35 at $141.87, November feeders are up $0.37 at $142.02 and January feeders are up $0.62 at $140.57. As the day's support solidifies, the market seems to be trading comfortably and should be able to maintain these levels throughout the latter part of the day.
LEAN HOGS
Whether you want to call it the market's nature or human's nature of "buy the rumor, sell the fact," time and time again the market is disappointed with how the fine details of the marketplace shake out. Thursday's export report was somewhat disappointing to the hog industry as the report didn't highlight any big news, and export demand was slightly lighter than the previous week. Adding to the uncertainty of the marketplace is the release of the Hogs and Pigs Report Thursday afternoon. Pre-report estimates are varying as COVID-19 as skewed the year's marketing system but as of here lately domestic demand has been commendable. October lean hogs are down $0.07 at $69.42, December lean hogs are down $1.00 at $63.35 and February lean hogs are down $0.62 at $68.45.
Pork net sales of 37,800 mt reported for 2020 were down 25% from the previous week and 13% from the prior four-week average. The three primary increases were from Mexico (15,000 mt, including decreases of 800 mt), China (8,200 mt, including decreases of 1,600 mt) and Japan (4,100 mt, including decreases of 200 mt).
The CME lean hog index for 9/22/2020 is up $0.72 at $72.89, and the actual index for 9/21/2020 is up $0.88 at $72.17. Hog prices are higher on the National Direct Morning Hog Report, up $0.63 with a weighted average of $64.98, ranging from $60.00 to $68.00 on 3,370 head and a five-day rolling average of $62.17. Pork cutouts total 149.71 loads with 134.41 loads of pork cuts and 15.30 loads of trim. Pork cutout values: up $0.77, $89.74.
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