DTN Midday Livestock Comments 09/19 12:02
Livestock Markets Show Growing Support
As Thursday grows closer and closer to the noon hour, all livestock markets
continue to show more signs of growing support. With little cash trade
developed on the live cattle spectrum, Thursday's momentum could easily
encourage a $1-3 gain late Thursday afternoon, or more likely Friday afternoon.
By ShayLe Stewart
DTN Livestock Analyst
The entire market's complex seems to be warming up as we get closer to the
week's close. December corn is trading at $3.7150, up 1/4 cent. Dow Jones is up
59.49 points and NASDAQ is up 24.72 points.
Unconfirmed talk on Twitter buzzes of Japan potentially granting a lower
tariff on 90% of U.S. beef imports as part of Thursday's trade negotiations. If
such deals are made, the cattle market would be in position to have a strong
rally with newly negotiated trade deals, profitable boxed beef margins, and a
future's board just waiting for a signal!
Thursday's live cattle opened at $105.825 and have since dropped slightly to
$105.800. Deferred contracts continue to find a support all the way to February
2021. As of midday, only a handful of bids have been renewed in the
countryside, bids of $101 stand in Kansas, and $160 in Nebraska. Asking prices
remain at $103-plus in the South, and $167 to $170 in the North. At this point,
it's likely that most trade will take place after Friday's Cattle on Feed
Report comes out. With a bullish report expected, and a strengthening futures
board, price could align anywhere from $1 to $3 higher.
Boxed beef cutouts at midday are slightly higher, choice is up $0.17
($218.41) and select is up $0.56 ($192.53). Boxed beef movement came to 59
loads total (25.22 loads of choice cuts, 17.65 loads of select cuts, 3.94 loads
of trimmings and 12.23 loads of ground beef).
October feeder cattle opened Thursday morning at $138.250 and have since
then climbed to $138.875. Slow, steady, gradual gains in the feeder cattle
market have helped build assurance that the bottom is in. Given the projections
for Friday's Cattle on Feed Report, the feeder cattle market should fare
particularly well with placement projection being estimated at 94.5%.
Despite hearing that there have been no new hog sales to China while Chinese
representatives are in Washington D.C. hoping to ease yearlong trade tension
between the U.S. and China, lean hog futures have held respectfully. Nearby
contracts have moderate support through May 2020 and then contracts deferred
further from there lose some market position. December lean hogs opened
Thursday at $66.700 and have since jumped $2.075 to $69.875.
The projected lean hog index for 9/18/19 is down $0.44 at $56.32, and the
actual lean hog index for 9/17/19 came to $56.76, down $0.73. Prices are down
again Thursday on the National Direct Morning Hog Report, down $0.71 at a
weighted average of $44.02, ranging from $41.00 to $45.50, on 4,455 head sold,
with a five-day rolling average of $45.04. Pork cutout values came in $0.02
higher at $68.13. Pork cutout total loads came to 146.58, with 132.98 loads of
pork cuts and 13.60 loads of trimmings.
ShayLe Stewart can be reached at email@example.com
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