DTN Midday Livestock Comments 01/16 12:16
Livestock Futures Lower; Cash Markets Lower
Feeders in the South threw down their cards and let packers have cattle
relatively early in the week for just steady prices. Feeders in the North have
yet to really trade, but seeing that cattle in the South have given up for
steady prices, getting higher prices in the North is going to be nothing short
of a tall order.
By ShayLe Stewart
DTN Livestock Analyst
Thursday's market isn't anything overly delightful, as all three livestock
contracts are trading with significant losses. But as we put the last few
months into perspective, Thursday's trade isn't out of line. The market has
been anxiously anticipating the signing of the phase-one trade agreement
between the U.S. and China, and now that the agreement has been signed, the
trade is looking forward and going about its normal business. The anticipation
of the agreement was factored into the market before the signing took place, so
now that the agreement is completed, the market's twitterpated feelings are
left to fall as the hype is over, and now trade can roll on as is. March corn
is down 8 1/4 cents per bushel and March soybean meal is up $0.60. The Dow
Jones Industrial Average is up 151.96 points, and the NASDAQ is up 55.03 points.
Trading early in the week for steady prices? That hasn't been the market
move of choice when feeders push for higher prices, and consequently, higher
prices have yet to be seen this week. It's looking like packers have had enough
of paying higher for fats and are winning the race this week. February live
cattle are down $0.60 at $126.00, April live cattle are down $1.02 at $126.50
and June live cattle are down $0.72 at $118.67. A significant volume has traded
in the South for steady prices of $124.00, and unless more trade breaks out
later in the week, trade could be done in the South already. Cattle in the
North have yet to really set their market. Some cattle in the North have been
bought steady at $124, but not enough to establish a market, and dressed cattle
only have steady bids on the table as of now.
Boxed beef prices are higher: Choice up $0.04 ($212.57) and select up $1.52
($211.19) with a movement of 64 loads (41.71 loads of choice, 13.68 loads of
select, 0 loads of trim and 8.62 loads of ground beef).
Feeder cattle contracts are following suit and trading lower, though are
surviving the day better than their other livestock counterparts. January
feeders are down $0.55 at $144.87, March feeders are down $0.70 at $144.47 and
April feeders are down $0.80 at $147.40. The week may end of a foul note, as
fat cattle trade is looking to be fully steady unless something else comes
about, at which point that leaves little room for feeder cattle contracts and
live cattle contracts to trade higher.
Lean hog contracts have escaped Thursday's dwindling surprises and are right
in line to steadily lower. February lean hogs are down $0.95 at $66.92, April
lean hogs are down $1.15 at $73.82 and May lean hogs are down $0.67 at $80.80.
With choppy sideways trade being the recent norm for lean hog contracts, it's
appealing to have the week's end near so that, hopefully, the market can
stabilize, reach some common ground and trade accordingly.
The projected lean hog index for 1/15/2020 is expected to be up $0.62 at
$60.15, and the actual for 1/14/2020 was up $0.53 at $59.53. Hog prices are
lower on the National Direct Morning Hog Report, down $0.28 with a weighted
average of $51.48, ranging from $46.00 to $52.00 on 4,736 head sold and
five-day rolling average of $50.94. Pork cutouts total 182.23 loads with 162.19
loads of pork cuts and 20.05 loads of trim. Pork cutout values: up $0.98,
ShayLe Stewart can be reached email@example.com
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