Tuesday Midday Livestock Market Summary - Cattle Contracts Rallying

 General Comments

The cattle contracts are thriving into Tuesday's afternoon as support has rallied the two markets substantially -- especially in the feeder cattle market. Meanwhile the lean hog sector is scaling lower as a unanimous consensus that the complex should trade higher doesn't seem likely for the time being. December corn is down 4 cents per bushel and December soybean meal is down $2.00. The Dow Jones Industrial Average is down 196.69 points and NASDAQ is down 26.95 points.

LIVE CATTLE

Live cattle contracts are on board for rallying into Tuesday's afternoon while the opportunity presents itself. October live cattle are up $1.22 at $109.17, December live cattle are up $1.80 at $113.45 and February live cattle are up $1.50 at $116.52. The cash cattle market continues to be quiet, as feeders are becoming keen on the notion of selling their cattle later in the week, and for higher prices. The South has priced cattle at $108-plus, but the North has yet to offer any initial asking prices for the week. If boxed beef prices can scale upward (even if its modestly) stronger beef demand could help feeders achieve another week of higher cash prices.

Boxed beef prices are higher: choice up $0.06 ($217.78) and select up $1.70 ($208.12) with a movement of 72 loads (36.95 loads of choice, 17.27 loads of select, 5.92 loads of trim and 12.34 loads of ground beef).

FEEDER CATTLE

As corn prices weaken $0.02 to $0.04 per bushel, the feeder cattle contracts rally $2.00 to $3.00 higher taking full advantage of Tuesday's support. October feeders are up $2.32 at $143.25, November feeders are up $3.07 at $144.17 and January feeders are up $2.90 at $142.05. Seeing the cash cattle market rally higher for the last two weeks has really helped to build somewhat of a positive mindset into the feeder cattle's highly anticipated fall run. There are numerous bearish reasons as to why the market's fall run could fall short of expectations (drought conditions, supply outweighing demand, and uncertainty still playing a large role in the marketplace). But if the cash cattle market can continue to gain leverage over the next two to four weeks, its positive momentum could carry over into the feeder cattle market.

LEAN HOGS

The cattle complex's rally is drawing attention away from the lean hog market as traders questions the longevity of these prices. Heading into the afternoon the lean hog contracts are $0.55 to $1.37 lower. Over the last three weeks the lean hog market's rally has been tremendous, but without seeing tremendous follow-through from the export side of things, the market wonders if these prices are sustainable. There will be a lot of pressure on this week's export report, which comes out on Thursday mornings. October lean hogs are down $0.05 at $72.65, December lean hogs are down $1.47 at $62.55 and February lean hogs are down $1.25 at $67.45.

The projected lean hog index for 9/28/2020 is up $0.49 at $75.91, and the actual index for 9/25/2020 is up $0.89 at $75.42. Hog prices are lower on the National Direct Morning Hog Report, down $0.49 with a weighted average of $63.61, ranging from $60.00 to $65.00 on 5,499 head and a five-day rolling average of $64.33. Pork cutouts total 240.10 loads with 218.83 loads of pork cuts and 21.27 loads of trim. Pork cutout values: down $0.05, $93.34.