Tuesday Midday Livestock Market Summary - Cattle Contracts Showing Mixed Support

General Comments

It looked as if it was going to be another painful Tuesday for cattle contracts, but as the noon hour approaches cattle contracts are showing mixed support while the lean hog market rallies ahead. December corn is down 1 3/4 cents per bushel and December soybean meal is up $0.30. The Dow Jones Industrial Average is up 11.14 points and NASDAQ is up 7.80 points.

LIVE CATTLE

Last week at this time live cattle contract were all lower, boxed beef prices were as good as they are this Tuesday and the cash market was itching to sell higher. This time around, the live cattle complex flirts with the idea of trading higher, boxed beef prices are still great and cash cattle sellers are even more enthusiastic about this week than they were last week. It's as if we sit at the circus - the magician holding the cattle market in his hat, and we know that only two things are possible. He could pull out steady/higher prices all supported by excellent beef demand, phenomenal boxed beef prices, and a very aggressive slaughter. Or he could pull out a market correct, which in all due respect is equally as qualifying. The market continues to trade, and the magician continues to twirl his hand above his hat.

December live cattle are down $0.45 at $119.62, February live cattle are up $0.15 at $124.75 and April live cattle are up $0.22 at $125.80. Cash trade still remains quiet, waiting to see where the board lands and letting packers know that feeders are eager for higher prices this week.

Midday boxed beef prices are higher: choice up $1.81 ($236.62) and select is up $1.10 ($211.48) with a midday movement of 59 loads (34.82 loads of choice, 11.68 loads of select, 4.14 loads of trim and 8.78 loads of ground beef).

FEEDER CATTLE

Tick-tock, tick-tock, more time will have passed before the answer comes but it looks as if, with the noon hour approaching, feeder cattle contracts may be able to shake off some of the Tuesday blues and trade higher after the noon hour. The spot November contract is down $0.97 at $148.10, January feeders are $0.07 higher at $146.07 and March feeders are trading $0.35 higher at $145.65. If live cattle contracts can heat up after the noon hour, feeder cattle contracts could be able to muster up the same strength.

LEAN HOGS

Whistling Dixie maybe pigs can fly! December lean hogs are trading a lofty $3.00 higher at $67.52, February lean hogs aren't far behind trading $2.45 higher at $74.35 and April lean hogs are up $1.95 at $80.60. Pork cutouts have been higher the last two days which could be helping stimulate some of the market. The biggest achievement will be if the sector can keep its gains throughout the rest of the week.

The projected lean hog index for 11/04/19 is down $0.52 at $60.36, and the actual index for 11/01/19 came to $60.88, down $1.22. Prices are lower on the National Direct Morning Hog Report, down $0.18 with a weighted average of $46.63, ranging from $43.00 to $47.34 on 8,424 head sold and a five-day rolling average of $48.58. Pork cutouts totaled 227.75 loads with 204.12 loads of pork cuts and 23.63 loads of trim. Pork cutout values are $1.82 higher $80.57.

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Tuesday Morning Livestock Market Summary - Mixed Trade Expected

GENERAL COMMENTS:

Live cattle futures made new highs for the move with December moving back to the highest level since April. An overbought market, again, meant nothing in light of strong boxed beef prices. There was virtually no cash business done Monday with bids and offers few and far between. Packers may tip their hand a little more Tuesday as they might be anxious to get business done. Demand remains strong and orders need to be filled. Futures show no sign of topping, but a price retracement could take place any time as traders may take some profits to the bank.

Lean hog futures continue to struggle with lower prices dominating the trade on Monday in all but the December contract, which showed a slight gain of 7 cents. Packers see no need to bid higher as hog numbers remain large along with increasing weights. The market has been beaten down for over two weeks and could be prime for a bump in prices again despite the overall bearish attitude.

	BULL SIDE		BEAR SIDE
1)	Price momentum in cattle may carry futures to significantly higher levels as long as beef prices remain strong.	1)	Each day cattle futures increase means we are closer to a top. Price cannot and will not increase forever without a significant price retracement.
2)	Strong futures and boxed beef prices should cause packers to raise bids this week in an attempt to purchase supply to meet current demand. Feedlots will resolve to hold for higher prices.	2)	Packers might say, enough is enough, and may hold bids steady this week. Strong boxed beef prices may have run its course for the time being as the market needs to balance supply with demand and not price itself out of the market.
3)	Lower hog prices should stimulate demand, which should provide support to futures. Pork demand should improve as we head through the end of the year.	3)	The inability of hog futures to find support and trend higher indicates ongoing weakness with packers bidding lower due to large numbers and increasing weights.
4)	The December contract closing in positive territory may trigger short-covering in it and later contracts as traders may view this as a market ready to bounce.	4)	The lack of confidence in a U.S.-China trade agreement yet this year and the lack of China purchasing pork leaves the market questioning the impact of African swine fever on the international market.

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Monday Closing Livestock Market Summary - Livestock Markets Mostly Untouched by Monday's Debut

GENERAL COMMENTS:

Monday left livestock contracts mostly unharmed by its arrival. It would be fair to say that not many expected live cattle to keep all of Friday's position and then add to it. And even though we all hope and pray that hog producers get a break, it's not surprising that the hog market closed lower. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.67 with a weighted average of $46.81. December corn closed six cents per bushel lower. The Down Jones Industrial Average is up 114.75 points and the NASDAQ is up 46.80 points.

LIVE CATTLE:

Nicely done live cattle markets, nicely done. The live cattle market secured another day worth of gains, both on the board and oddly enough, even in the countryside. December live cattle closed $0.55 higher at $120.07, February live cattle closed $0.37 higher at $124.60 and April live cattle closed $0.12 higher at $125.57. Given that Friday had such lavish gains, it wouldn't have surprised anyone to see Monday be weaker and timid. But the board continued to rally and the countryside went about its business as usual. There were 119 steers sold in Nebraska for $182 dressed -- $2.00 higher than last week's $5.00 dressed cattle rally. The rest of the county remains quiet.

Boxed beef prices closed higher: choice up $1.61 ($234.81) and select up $2.87 ($210.38) with a total movement of 81 loads (46.50 loads of choice, 15.86 loads of select, 11.34 loads of trim and 7.18 loads of ground beef). Monday's slaughter is estimated at 115,000 head, down 3,000 head from the previous week and down 6,000 head from a year ago.

TUESDAY'S CASH CATTLE CALL: Steady. Tuesdays can be tumultuous to the livestock complex. Given that Monday successfully gained the ground that it did, it wouldn't be surprising to see the countryside quiet and the board give up some position.

FEEDER CATTLE:

November feeder cattle closed five cents lower at $149.07, January feeders are steady at $146.00 and March feeder cattle contracts closed 17 cents higher at $145.30. The spot contract and nearby January board were leery of advancements early in the week while the deferred feeder cattle contracts rallied anywhere from $0.40 to $1.07.

On an estimated run of 6,500 head (up 392 head from the previous week), Joplin Regional Stockyards in Carthage, Missouri, sold feeders on Monday $3.00 to $6.00 higher and yearlings steady to $2.00 higher compared to last week. Demand was good and supply was moderate. In the live cattle market, and now even in the feeder cattle market, every cattleman loves good prices but knows that with the good comes the bad. The initial run of the feeder cattle market was expected to be good, but the turning of the tide must be coming soon. With a little over a month into the fall run and going on the eighth week of a stronger board, a correction wouldn't be shocking, especially knowing that two major non-beef dish holidays are right around the corner. The CME feeder cattle index 11/01/19: up 47 cents at $146.45.

LEAN HOGS:

With the large numbers of readily available hogs, no confirmed news of a "sign, sealed and delivered" phase one agreement with China and hog carcass weights on the rise, the lean hogs future's board closed up $0.07 in a bullish and surprising Monday. December lean hogs closed 7 cents higher at $64.52, February hogs closed down $0.67 at $71.90 and April lean hogs closed $0.85 lower at $78.62.

Pork cutouts totaled 277.69 loads with 245.65 loads of pork cuts and 32.04 loads of trim. Pork cutout values: up $3.11 at $32.04. The CME lean hog index 10/31/19: down 64 cents at $62.10.

TUESDAY'S CASH HOG CALL: $1.00 lower. Tuesdays have a way of creating havoc in the livestock complex. Given that prices were steady Monday, which could have been stimulated somewhat by cutout values, it wouldn't be surprising to see Tuesday's prices be softer given that its early in the week and the market's overabundance of supply remains.

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Monday Midday Livestock Market Summary - Mixed Vibes in Livestock Complex

General Comments

Mondays are generally a crowd for the livestock complex, and to be honest, Tuesday isn't much better. Live cattle contracts are still energized from last week's close and show modest support throughout most of the live cattle contracts. Feeder cattle and lean hog markets aren't so convinced that Monday needs to amount to anything, and the end of daylight saving time makes the day that much harder. December corn is down 4 cents per bushel, and December soybean meal is down $1.50. The Dow Jones Industrial Average is up 99.36 points and the NASDAQ is up 42.76 points.

LIVE CATTLE

Live cattle is the only marketplace projecting higher prices at the top of the hour. Futures are ranging from steady to gains of $0.75. Given that last week ended on a positive note for all parties, packers are making money on exceptional boxed beef prices and feeders are rallying the cash market and even turned down late-week bids. This week's cash cattle market could have the potential to be even better.

Formula totals for last week were mixed, higher in Texas, and lower in Kansas and Nebraska: Kansas 72,799 (down 6,222), Nebraska 54,767 (down 4,720), Texas 99,697 (up 1,376). Total trade volume was lower in all three major feeding states: Kansas 83,842 (down 13,930), Nebraska 83,201 (down 1,933), Texas 104,913 (down 2,225).

Midday boxed beef prices are higher: choice up $1.14 ($234.34) and select up $2.32 ($209.83) with a movement of 39 loads (22.13 loads of choice, 8.46 loads of select, 4.45 loads of trim and 3.59 loads of ground beef). Last week's slaughter totaled 655,000 head -- 15,000 more than the previous week and 2,000 more than the same week a year ago. Given that boxed beef prices continue to steadily trend upward, slaughter should continue to press on vigorously.

FEEDER CATTLE

Feeder cattle prices are waiting for the live cattle market to test the waters before they commit to higher or lower moves. Trading softly around both sides of steady, the feeder cattle market will most likely see an uneventful session and close steady at best. November feeder cattle are steady at $149.12, January feeders are down $0.20 at $145.80 and March feeders are down $0.05 at $145.07.

LEAN HOGS

The lean hog market is taking a cut at deferred contracts, which range from $0.65 to $1.07 lower. It's a tough game to be in right now with too many hogs available, packers able to push the cash market lower and hogs gaining more weight. For the week ended Oct. 26, hogs gained 1 pound over the prior week and are up 3 pounds compared to last week. Given the sheer number of hogs around and available, 3 pounds is a significant figure.

The projected lean hog index for 11/01/19 is down $1.22 at $60.88, and the actual for 10/31/19 came to $62.10, down $0.65. Prices are lower on the National Direct Morning Hog Report, down $1.18 with a weighted average of $47.30, ranging from $44.00 to $50.00 on 7,920 hogs sold and a five-day rolling average of $49.87. Pork cutouts totaled 125.68 loads with 104.79 loads of pork cuts and 20.89 loads of trim. Pork cutout prices are up $1.93 at $75.64.

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