General Comments
Nearby lean hog and feeder cattle contracts are seeing some modest support develop as the day progresses into the noon hour. Upon enduring a week of mostly lower trade, the live cattle market scales fully lower as Wednesday's lower cash cattle trade was a disappointment and will make it hard for the rest of the week to do any better. December corn is up 7 cents per bushel and December soybean meal is up $6.90. The Dow Jones Industrial Average is down 132.06 points and NASDAQ is down 144.87 points.
LIVE CATTLE
Live cattle contracts continue to scale lower as the market balances disappointment in the cash cattle trade and absent traders in the futures market. October live cattle are down $0.52 at $107.85, December live cattle are down $0.67 at $109.60 and February live cattle are down $0.70 at $112.52. Feedlot mangers look at this week's market and realize they have an uphill battle. As boxed beef prices print lower, packers are going to be less likely to pay more money for cash cattle and with some feedlots already selling cattle this week, packers are going to press hard for $1.00 lower than last week's average. Bids have yet to resurface following Wednesday's light trade but could develop at some point throughout the afternoon.
Boxed beef prices are lower: choice down $0.60 ($210.54) and select down $2.38 ($196.89) with a movement of 112 loads (60.70 loads of choice, 30.58 loads of select, 7.22 loads of trim and 13.47 loads of ground beef).
FEEDER CATTLE
Even with a $0.04 to $0.05 rally in the corn market, there's some modest support surfacing in the feeder cattle market. October feeders are up $0.15 at $138.52, November feeders are up $0.07 at $136.40 and January feeders are down $1.00 at $132.32. Seeing that the support is mild and not widespread makes one wonder how long its support will last. With live cattle prices being lower and the cash cattle market trading slightly lower, it wouldn't be surprising to see the market turn back to fully lower prices amid another modest corn rally.
LEAN HOGS
The lean hog market is sitting in a vast different position than then cattle contracts. As demand continues to push prices higher and higher, the futures market is following suit testing new support levels and moving the market far beyond what was anticipated. December lean hogs are up $1.07 at $69.50, February lean hogs are up $0.42 at $71.52 and May lean hogs are down $1.00 at $78.60. As Monday was Columbus Day, this week's export report will be shared Friday versus the usual Thursday unveiling. With domestic pork demand continuing be robust, the market is hopeful for another strong export report Friday morning.
The projected lean hog index for 10/14/2020 is up $0.25 at $78.49 and the actual index for 10/13/2020 is up $0.03 at $78.24. Hog prices are higher on the National Direct Morning Hog Report, up $0.04 with a weighted average of $63.02, ranging from $57.00 to $66.00 on 7,545 head and a five-day rolling average of $63.16. Pork cutouts total 172.55 loads with 149.22 loads of pork cuts and 23.33 loads of trim. Pork cutout values: up $6.08, $102.65.
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