Monday Midday Livestock Market Summary - Some Wins & Some Losses in Livestock Complex

General Comments

It's always interesting to see Monday's market after a Cattle on Feed Report comes out. Sometimes the market can be in an utter tailspin, but Friday's neutral COF report is bearing little market implication to Monday's board. Live cattle contracts are up while feeder cattle and lean hog contracts are lower. December corn is down 2 1/4 cents per bushel and December soybean meal is up $1.30. The Dow Jones Industrial Average is up 116.00 points and NASDAQ is up 82.25 points.

LIVE CATTLE

Live cattle markets are welcoming the new week with ease and confidence as most markets are trading anywhere from $0.10 to $0.72 higher. Friday's neutral Cattle on Feed Report isn't bearing any positive or negative reaction into the market. Overall the live cattle sector is sitting in a fine position as boxed beef prices are soaring -- last week choice cuts were $7.40 higher and select cuts were $6.80 higher, and slaughter remains snappy.

Formula totals for last week were mixed, higher in Texas and Nebraska, but lower in Kansas: Kansas 79,021(down 1,530), Nebraska 59,487(up 3,572), Texas 98,321(up 5,607). Total trade volume was also mixed larger in Kansas and Texas, but lower in Nebraska: Kansas 97,772(up 10,774), Nebraska 85,134(down 1,543), Texas 107,138(up 11,683). New showlists appear to be mixed, higher in Texas, Nebraska/Colorado, but lower in Kansas. Bids and asking prices have not been established as of yet. Significant trade volume will likely be delayed until the second half of the week.

Dressed weights for the week ending October 12 show that heifer carcasses were up four pounds at 828 pounds, while steer carcasses were only up two pounds at 901 pounds total. Slaughter last week totaled 640,000 head, which was down 1,000 head from the previous week, but 5,000 head more than the same week a year ago.

Midday boxed beef prices are up: choice up $2.07 ($227.51) and select up $0.18 ($200.02). Monday's midday boxed beef movement totals only a mere 35 loads 15.72 loads of choice cuts, 7.82 loads of select cuts, 5.50 loads of trim and 5.87 loads of ground beef).

FEEDER CATTLE

Given that the feeder cattle market is saturated with bawling calves and that most of the hard, green yearlings have already been sold, it wouldn't be unlikely to see feeder cattle prices remain steady or weaken in the country side this week. October's feeder cattle contract expires on Thursday and the only contract trading higher is the November board, up $0.12 at $145.50. January 2020 through May 2020 contracts are down $0.17 to $0.40.

LEAN HOGS

Nearby contracts are trading higher Monday morning while deferred contracts struggle to find support. December lean hogs are up $0.35 at $65.27, and February 2020 lean hogs are up $0.12 at $73.47. This week is anticipated to be another rough week in the lean hog complex as supply outweighs demand and no clear sign of export opportunities arise.

The projected lean hog index for 10/25/19 is down $0.97 at $64.12, and the lean hog index for 10/24/19 is down $0.40 at $65.09. Prices are lower on the National Direct Morning Hog Report, down $0.67 with a weighted average at $52.41, ranging from $48.00 to $53.16 on 5,119 head sold and a five-day rolling average of $54.92. Pork cutouts totaled 116.97 loads with 101.68 loads of pork cuts and 15.29 loads of trim. Pork cutout values are up $0.38 $76.94.

#completeherdhealth

Monday Morning Livestock Market Summary - Cattle Futures Look for Additional Support

GENERAL COMMENTS:

With the Oct. 1 Cattle on Feed report now in the rearview mirror, traders are looking more toward technical support developing late last week. Triple-digit gains in nearby contracts pushed December futures above $116 per cwt, this has not only sparked technical support as prices have broken through May highs, but it could bring more buyer support to the end of October. There may be increased underlying support in the complex, although the aggressive market rally the last two months is leaving the complex vulnerable to a market correction. Cattle on feed numbers were well within expectations, 1% lower than year-ago levels with placements at 102% year-ago levels. Limited morning price shifts are expected Monday as the overall tone of the report is expected to be viewed as neutral. Cash cattle activity is expected to remain undeveloped following firm additional gains late last week. Showlist distribution and inventory taking is likely to be the extent of market development in the cash market Monday and likely much of Tuesday. Monday slaughter runs are expected at 117,000 head.

Mixed trade is expected during early week trade as traders still remain focused on aggressive supply levels through the end of the year. Plants continue to run at or near capacity with strong weekend runs across the country. As time passes and market-available hogs become more manageable, Saturday slaughter numbers will likely to be the first to drop, followed by plants taking 4,000 to 10,000 off of daily runs through the week. But we appear to still be several weeks away from making a major dent in the large supply levels of hogs available on the complex. There is expected to be some continued encouragement from the fact that the U.S and China talked late last week, but once again no major breakthrough was reported. But as long as both sides continue to show up at the negotiating table, there is hope for progress. Cash hog values are expected to be steady to $1 per cwt lower, with most bids expected 50 cents lower. Expected slaughter Monday is at 489,000 head.

	BULL SIDE		BEAR SIDE
1)	Technical buyer interest late last week has sparked increased support in the live cattle complex. With December futures at six-month highs, traders look for increased underlying support late in the week.	1)	At first glance, cattle placement levels 2% ahead of year-ago levels is expected to be seen as generally weak. But this is in line with expectations and likely to have limited market impact Monday morning.
2)	Total cattle on feed numbers fell from year-ago levels with a total of 11.3 million head on feed Oct. 1. This is 1% lower than last year and continues to point to expected tighter supplies in the upcoming months.	2)	Late-week boxed beef movement remained light with prices mixed. The inability to continue to push wholesale beef values higher on a consistent basis is likely to limit underlying support in the futures trade during late October.
3)	Generally low level talks between the U.S. and China late last week continues to add confidence in moving the process down the road. This has shown little short-term results, but it leaves the door open for additional direction and hope that both sides will reach a long lasting deal at some point.	3)	Cash hog values continue to steadily erode as packers try to preserve plant margins by cutting overall procurement costs through the end of the month. With plant speeds remaining high, increased focus on limiting cash prices will likely be seen.
4)	Despite limited recent news concerning African swine fever in China, the country still struggles to get control of the disease, limiting hog supplies significantly. This will likely keep China in need of imports of pork over the foreseeable future.	4)	Lack of indication that China is willing to actively step into the U.S. market to buy additional and steady pork supplies is concerning and creating uncertainty about how talk of "increased purchases of ag products" will ultimately relate to pork sales to China over the upcoming months.

#completeherdhealth

Friday Closing Livestock Market Summary - Livestock Market Closed Mostly Higher

GENERAL COMMENTS:

Friday's livestock markets closed mostly higher. Cattle contracts secured gains across all markets while the hog complex closed mixed. Hog prices are lower on the National Direct Afternoon Hog Report, down $0.68, with a weighted average of $53.10. December corn is steady and December soybean meal is steady. The Dow Jones Industrial Average is up 152.53 points and NASDAQ is up 57.31 points.

From Friday to Friday, livestock futures scored the following changes:

October live cattle up $1.50 and December live cattle up $2.45; October feeder cattle up $2.20 and November feeder cattle up $2.53; Dec lean hogs are down $3.03 and February lean hogs are down $4.12

LIVE CATTLE:

Live cattle contracts ended the week on a successful note. Nearby contracts closed over $1.00 higher and deferred contracts, though not as high, still closed green. December live cattle closed up $1.35 at $116.07 and February live cattle closed up $1.02 at $121.07. Cash cattle trade hasn't sparked much after the Cattle on Feed Report came out. Cattle and calves on feed figures were down 1%, placements up 2% and marketings up 1%. Overall, the report should have little market impact with actual figures well within analysts' projections. The report is considered to be neutral in its findings. Friday afternoon some live trade has taken place in west Nebraska for $111.00, $1.00 higher. More trade is expected to develop as the day presses on.

Closing boxed beef prices are mixed: choice down $0.18 ($225.44) and select up $0.75 ($199.84) with a movement of 83 loads (46.35 loads of choice, 12.91 loads of select, 11.93 loads of trim and 11.91 loads of ground beef).

MONDAY'S CASH CATTLE CALL: Steady. Monday's market should be in good shape for another strong week, but given the fact that it's Monday, it's very unlikely that any fat cattle will trade that early in the week.

FEEDER CATTLE:

On an estimated run of 5,395 head (down 1,245 head from the previous week) Billings Livestock Commission in Billings, Montana, sold steer and heifer unevenly steady. Quality was considered average to attractive and varied more compared to last week. Calves with fall preconditioning shots sold with good demand. Preconditioned calves sold with a solid $8.00 to $12.00 premium to calves with no shots or only spring shots. Several buyers showed no interest at all for calves that were not preconditioned this fall. Overall, demand was mostly moderate to good on heavy offerings. Friday's feeder cattle market closed higher with gains ranging mostly from $0.75 to $1.20. November feeder cattle closed up $1.20 at $145.37 and January feeder cattle closed up $1.02 at $141.60. CME feeder cattle index 10/24/19: $144.73, down $0.23.

LEAN HOGS:

Though the lean hog market closed mixed while other markets closed fully higher, it was a good Friday close for the lean hog sector. Stimulated by rumor that the phase one trade deal could be coming to a finalized deal, the lean hog market saw flurries of support. December lean hogs are up $0.37 at $64.92 and February lean hog are down $0.12 at $73.35. Pork cutouts totaled 311.25 loads with 286.68 loads of pork cuts and 24.57 loads of trim. Pork cutout values: up $2.03 at $76.56. CME lean hog index for 10/23/19: $65.49, down $0.23.

MONDAY'S CASH HOG CALL: $1.00 lower. Even though Friday closed higher, Monday markets have a way of humbling anxious souls. 

Friday Midday Livestock Market Summary - Higher Livestock Contracts and Promising Trade Rumors

General Comments

Trade in all three livestock markers is higher at the noon hour as chatter that the U.S. and China are coming close to wrapping up the first phase of trade negotiations circulates and spreads optimism. December corn is up 2 1/2 cents per bushel, and December soybean meal is up $0.20. The Dow Jones Industrial Average is up 188.71 points, and the NASDAQ is up 51.93 points.

LIVE CATTLE

Live cattle contracts are congruent at midday Friday with all contracts up anywhere from $0.60 to $0.85. The exception is spot October, which is up $1.42 at $111.85. December live cattle are up $0.85 at $115.57 and carrying significantly more contracts than earlier in the week. February live cattle are up $0.67 at $120.72. Live trade has been reported in parts of Kansas and Nebraska Friday morning, steady with Thursday's bump at $110, which is $2.00 higher than last week's basis in the South. More trade is expected to develop after the USDA Cattle on Feed report comes out this afternoon.

Midday boxed beef cutouts are higher: Choice is up $0.35 ($225.97), and select is up $0.63 ($199.72). So far, midday boxed beef movement has totaled only 49 loads (30.92 loads of choice cuts, 8.73 loads of select cuts, 5.87 loads of trim and 3.29 loads of ground beef).

FEEDER CATTLE

Friday's feeder cattle market is ticking higher and higher, aiming to end the week on a green outlook. Nearby and deferred contracts are both performing well, but more trader interest is starting to levitate toward the January market. November feeder cattle are up $1.40 at $145.57, and January feeder cattle are up $1.07 at $141.67.

LEAN HOGS

After three consecutive days of mostly lower trade, Friday's midday boost of positivity is just what the livestock sector and hog producers needed. Even more so than the cattle contracts, the lean hog market needs the first phase of the trade U.S.-China trade deal finalized and set in place. Given that the domestic hog population continues to grow and that China's need for pork protein is undeniable, the answer lies in the midst of the two problematic situations. Lean hog contracts are all up, with nearby markets slightly higher than deferred. December lean hogs are up $1.47 at $66.02, and February lean hogs are up $1.67 at $75.15.

The projected lean hog index for 10/23/19 is down $0.23 at $65.49, and the lean hog index for 10/22/19 comes to $65.72, down $0.25. Prices are lower on the National Direct Morning Hog Report, down $0.64 with a weighted average of $53.14, ranging from $49.00 to $53.99 on 5,147 hogs sold and a five-day rolling average of $55.37. Pork cutouts totaled 194.78 loads with 182.01 loads of pork cuts and 12.77 loads of trim. Pork cutouts values are substantially higher, up $4.17 at $78.70. 

#completeforageprogram