DTN Midday Livestock Comments 09/22 12:24
The Lean Hog is Pulling in Trader's Interest
Tuesday is shaping up to be another downward-pressuring day for the cattle
contracts as traders look to the lean hog market as see more short-term
DTN Livestock Analyst
As Tuesday progresses, aspirations throughout the lean hog market continue
to grow as traders see the potential for a strong export market and see
continued follow through as packers keep moving the cash market steadily
higher. Meanwhile the cattle sector sits with the opposite equation; not able
to rally trader interest has left the complex scaling lower and the cash cattle
market remains unchanged. December corn is down 1/4 cent per bushel and
December soybean meal is up $2.30. The Dow Jones Industrial Average is down
26.71 points and NASDAQ is up 60.64 points.
The live cattle sector isn't as volatile to the day's lack of support as
much as the feeder cattle market is. October live cattle are down $0.35 at
$106.35, December live cattle are down $0.52 at $110.07 and February live
cattle are down $0.97 at $114.27. The week is gearing up to be another week of
standoff trade for the cash cattle market as bids are illusive, and feeders are
nonchalant about developing their asking prices. Again, feeders know that they
can easily roll their showlists to next week if they don't receive the prices
they need. Working against feeder's ability to move the market higher is the
weaker futures market along with the vulnerability that comes with the Cattle
on Feed Report.
Boxed beef prices are mixed: choice down $0.92 ($215.30) and select up $0.80
($206.62) with a movement of 100 loads (77.54 loads of choice, 12.24 loads of
select, zero loads of trim and 10.01 loads of ground beef).
Feeder cattle contracts are feeling even more pressure than what Monday
initially sprung on the complex as most of the market scales $1.40 to $1.67
lower. October feeders are down $1.65 at $140.60, November feeders are down
$1.62 at $141.10 and January feeders are down $1.40 at $139.47. The market is
suffering from a lack of trader interest as traders see opportunity in the lean
hog market as opposed to the cattle market.
As Tuesday moves into the afternoon, the lean hog market is seeing more and
more support develop throughout the nearby contracts. October lean hogs are up
$3.00 at $68.60, December lean hogs are up $2.85 at $64.45 and February lean
hogs are up $2.37 at $69.60. Thursday's export report is going to be highly
sought after as the market anticipates export demand flourishing at some point
in the near future but is still unable to pinpoint when that time will be.
The projected lean hog index for 9/21/2020 is up $0.88 at $72.17 and the
actual index for 9/18/2020 is up $1.71 at $71.29. Hog prices are higher on the
National Direct Morning Hog Report, up $2.16 with a weighted average of $62.15,
ranging from $58.00 to $65.00 on 6,358 head and a five-day rolling average of
$60.42. Pork cutouts total 226.96 loads with 210.92 loads of pork cuts and
16.04 loads of trim. Pork cutout values: up $4.17, $94.26.
ShayLe Stewart can be reached email@example.com
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