DTN Midday Livestock Comments 01/28 12:08
Support Surfaces in Livestock Contracts
Traders are looking to the marketplace Tuesday and are seeking out buying
opportunities after Monday's prices plummeted.
By ShayLe Stewart
DTN Livestock Analyst
Shaking off the Monday blues, lean hog and feeder cattle contracts wasted no
time Tuesday in looking to take back some of the position they lost in Monday's
downfall. The live cattle complex is the only livestock sector fighting the
forward movement, even though trade earlier Tuesday morning tried to move
higher. March corn is up 4 1/4 cents per bushel, and March soybean meal is down
$1.00. The Dow Jones Industrial Average is up 248.03 points, and the NASDAQ is
up 135.56 points.
Live cattle contracts are the only livestock sector unwilling to re-evaluate
Monday's move and continue to trade mostly lower. Earlier Tuesday morning, the
complex flirted with the idea of progressing prices higher but has since
dropped back below Monday's close in most contracts. February live cattle are
up $0.17 at $122.45, April live cattle are down $0.20 at $121.10 and June live
cattle are down $0.10 at $112.90. The countryside continues to echo with
crickets, as feeders are unsure where to price cattle this week and packers
haven't inquired on any pens yet.
On Friday, USDA will release its biannual cattle inventory report, which is
expected to come out bullish in lower total cow-herd numbers. If this is the
case, the report could be the bump that the live cattle market needs in order
to shoot cash prices higher and out of the steady sideways trade.
Consigned to Wednesday's Fed Cattle Exchange, there are 477 head with two
pens coming from Kansas and one pen from Texas. All cattle are offered with the
Boxed beef prices are higher: choice up $0.15 ($213.74) and select up $2.59
($213.09) with a movement of 61 loads (43.29 loads of choice, 7.14 loads of
select, 0 loads of trim and 10.76 loads of ground beef).
Feeder cattle contracts are up $0.27 to $0.62 throughout the complex as the
feeder cattle market, like the other livestock contracts, is building some
support into Tuesday's noon hour. January feeders are up $0.37 at $142.27,
March feeders are up $0.62 at $135.80 and April feeders are up $0.37 at
$138.37. With the January contract expiring in two short days, more interest in
buying into the March contract, helping boost prices in that month.
The April 2020 contract is seeing growing support Tuesday morning as the
board starts to make a comeback from Monday's panic selling. February lean hogs
are up $0.55 at $66.50, April lean hogs are up $1.25 at $71.70 and May lean
hogs are up $0.85 at $77.82. Monday afternoon's cash prices stepped higher,
which could have helped insulate Tuesday's ability to move the entire board
The projected lean hog index for 1/28/2020 is up $0.10 at $61.74, and the
actual for 1/24/2020 is up $0.11 at $61.64. Hog prices are lower on the
National Direct Morning Hog Report, down $0.27 with a weighted average of
$53.62, ranging from $49.00 to $56.50 on 10,460 head sold and five-day rolling
average of $52.70. Pork cutouts total 259.05 loads with 237.18 loads of pork
cuts and 21.86 loads of trim. Pork cutout values: down $0.12, $77.64.
ShayLe Stewart can be reached email@example.com
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