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DTN Midday Livestock Comments          09/17 12:08

   Cattle Weaken While Nearby Hogs Scale Upward

   Trade has been mixed through Thursday's morning as cattle contracts lack 
support and consequently are trading lower, but the same can't be said for the 
lean hog complex.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   It's been another day of lower trade for the cattle contracts, but China's 
purchases of pork shown on Thursday morning's export report has helped refuel 
some upward trade in the hog sector. Meanwhile cash cattle trade is still idle 
with bids on the table but feedlots letting them sit there and not getting in a 
hurry. December corn is up 3 cents per bushel and December soybean meal is up 
$8.90. The Dow Jones Industrial Average is down 310.78 points and NASDAQ is 
down 249.85 points.


   The live cattle complex is feeling some pressure Thursday morning and the 
battle for this week's cash market continues. October live cattle are down 
$0.22 at $106.50, December live cattle are down $0.87 at $111.07 and February 
live cattle are down $0.65 at $115.60. The looming concern continues to be the 
long-term slaughter and demand. Without eateries and restaurants pushing beef 
dishes as usual, packers may consider slowing slaughter speeds down as demand 
isn't as clear. Throughout the countryside cash cattle trade is quiet as 
packers have put bids on the table of $103 in Nebraska and Colorado, and $163 
dressed but feedlots aren't overly worried about jumping to their offers. More 
trade is expected to develop before the week's end as there's only been a 
moderate movement in the South thus far this week.

   Beef net sales of 14,300 mt reported for 2020 were down 8% from the previous 
week and 2% from the prior four-week average. The three primary increases were 
for South Korea (4,400 mt, including decreases of 300 mt), Japan (4,000 mt, 
including decreases of 200 mt), China (1,800 mt).

   Boxed beef prices are lower: choice down $0.35 ($215.03) and select down 
$0.91 ($203.60) with a movement of 122 loads (65.95 loads of choice, 20.98 
loads of select, 6.00 loads of trim and 28.91 loads of ground beef).


   Feeder cattle contracts are continuing their downward progression though 
Thursday's trade is seeing losses mostly greater than $1.00. September feeders 
are down $0.75 at $139.75, October feeders are down $1.32 at $141.10 and 
November feeders are down $1.60 at $141.92. The resistance set at $144 remains 
intimidating and with so many answered questions plaguing the livestock sector, 
the complex is felt to trade lower until support reignites a rally or 
short-term demand becomes clear.


   The lean hog complex is jumping through Thursday's trade feeling somewhat 
supported by the morning's export report even though its postings would have 
been from before the announcement of the German African swine fever case. The 
market is anxious to trade higher, but it needs some answers to transpire in 
order to do so. How much export demand is going to develop, and when is it 
going to develop remain the big underlying questions. October lean hogs are up 
$1.37 at $66.60, December lean hogs are up $1.62 at $63.62 and February lean 
hogs are up $0.50 at $68.22. 

   The projected two-day lean hog index for 9/15/2020 is up $1.07 at $66.42 and 
the actual index for 9/14/2020 is up $0.80 at $65.35. Hog prices are lower on 
the National Direct Afternoon Hog Report, down $1.67 with a weighted average of 
$59.33, ranging from $52.00 to $62.50 on 5,136 head and a five-day rolling of 
$56.51. Pork cutouts total 136.53 loads with 124.80 loads of pork cuts and 
11.73 loads of trim. Pork cutout values: up $7.93, $91.07.

   Pork net sales of 50,600 mt reported for 2020 were up 68% from the previous 
week and 41% from the prior four-week average. The three primary increases were 
for China (35,900 mt, including decreases of 200 mt), Mexico (5,900 mt, 
including decreases of 400 mt), Japan (3,200 mt, including decreases of 400 mt).

   ShayLe Stewart can be reached shayle.stewart@dtn.com


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