DTN Midday Livestock Comments 10/26 11:40
Live Cattle Contracts Hunger for More
After rallying modestly Monday, the live cattle contracts have hit Tuesday's
trade more ambitious than the day before.
DTN Livestock Analyst
Tuesday's trade has favored the cattle contracts and unfortunately left the
hog contracts to plunder lower. The advancements seen throughout the cattle
complex Monday were undoubtedly taken, but the market was somewhat disappointed
that the bullish Cattle on Feed report, shared on Friday, didn't do more. If
Tuesday's trade can keep with the pace that it's entering the afternoon with,
the market may see the rest of the upward progression that some thought Monday
lacked. December corn is up 7 3/4 cents per bushel and December soybean meal is
up $1.10. The Dow Jones Industrial Average is up 68.94 points and NASDAQ is up
The live cattle contracts quivered early Tuesday morning, seemingly unsure
if the market would support another day of higher trade, but as the morning has
progressed, the contracts have grown in strength and the December live cattle
contract has managed to keep above the 40-day moving average of $129.12.
December live cattle are up $0.52 at $130.05, February live cattle are up $0.52
at $135.27 and April live cattle are up $0.42 at $138.17. The recent uptick
trend in the boxed beef market, along with the confidence that's prevailing
throughout the futures market, may be the backing that the cash cattle market
has needed to demand higher prices. Thus far, the market has yet to see any
trade develop as packers haven't offered up any bids, and the only asking
prices noted at this time are in the South at $126-plus. With last week's total
negotiated cash cattle movement totaling 78,746 head, and of that 79% of the
cattle being procured for the nearby delivery, this could indicate that
packers' supplies are getting closer to the knife, and they may need to dip
into the cash cattle market with more support than what's recently been seen.
Bids could begin to develop Tuesday afternoon but it's more likely that they
will develop midday Wednesday.
Boxed beef prices are mixed: choice up $2.10 ($285.14) and select down $0.04
($263.15) with a movement of 66 loads (23.32 loads of choice, 11.97 loads of
select, 3.43 loads of trim and 27.74 loads of ground beef).
The $0.08 rally in the nearby corn contracts has paused (but not fully done
away with) the excited nature that originally developed in the feeder cattle
contracts Tuesday morning. The market is currently maintaining a respectable
$0.42 to $0.62 gain in the early 2022 contracts where feeder cattle supplies
are anticipated to be thin. November feeder cattle are up $0.02 at $158.50,
January feeders are up $0.52 at $159.12 and March feeders are up $0.62 at
$160.27. If the live cattle market can maintain its current strength into the
later part of the week and demand higher cash cattle prices, the feeder cattle
market may be able to rally upon its momentum.
The lean hog complex is continuing to bleed red figures as the market
struggles to summon any substantial support. One may be quick to point out the
midday pork cutout value is up $2.24 ($100.51), but more times than not, when
we put too much faith in the midday figure, the market's afternoon pork cutout
comes to haunt us. December lean hogs are down $1.27 at $72.92, February lean
hogs are down $1.17 at $75.60 and April lean hogs are down $1.15 at $79.52.
The projected lean hog index for Oct. 25 is down $0.32, at $82.66, and the
actual index for Oct. 22 is down $0.72, at $82.98. Hog prices are lower on the
National Direct Morning Hog Report, down $0.39 with a weighted average of
$63.25, ranging from $62.00 to $66.00 on 5,350 head and a five-day rolling
average of $64.59. Pork cutouts total 157.76 loads with 130.14 loads of pork
cuts and 27.62 loads of trim. Pork cutout values: up $2.24, $100.51.
ShayLe Stewart can be reached email@example.com
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