DTN Midday Livestock Comments 12/03 12:07
Livestock Contracts Slide Lower
Thursday's trade hasn't granted the livestock contracts any wishes as all
three markets trade fully lower.
DTN Livestock Analyst
The livestock sector hasn't warmed up as the day has continue to trade. The
feeder cattle contracts are seeing the steepest losses though all contracts in
the livestock arena are lower. There's been some more cash cattle trade at
$110, which is starting to be this week's trend. March corn is up 2 1/2 cents
per bushel and January soybean meal is up $5.20. The Dow Jones Industrial
Average is up 171.38 points and NASDAQ is up 62.65 points.
The week isn't panning out as feedlots had hoped it would. A weaker board
and cash cattle prices that pan out to be $1.00 lower to $1.00 higher, wasn't
in mind for the week, but nevertheless, here we are. December live cattle are
down $1.47 at $109.27, February live cattle are down $1.85 at $112.07 and April
live cattle are down $1.47 at $115.70. Working against feedlot's aspirations to
move the market higher is a topping boxed beef market as well. With choice and
select cuts showing a slightly pullback, it would appear that a seasonal peak
has been set. There has been some trade again Thursday morning in Texas: $110
-- while the rest of the cattle country sits idly waiting for bids to be
Beef net sales of 13,700 mt reported for 2020 were down noticeably from the
previous week and down 16% from the prior 4-week average. The three primary
increases were for Japan (7,200 mt, including decreases of 500 mt), South Korea
(3,800 mt, including decreases of 400 mt) and Mexico (1,000 mt, including
decreases of 100 mt).
Boxed beef prices are lower: choice down $1.37 ($239.52) and select down
$1.28 ($221.67) with a movement of 99 loads (60.92 loads of choice, 9.35 loads
of select, 15.69 loads of trim and 12.85 loads of ground beef).
A lack of trader support and the $0.03 rally in the corn market isn't
lending the feeder cattle contracts any favors. January feeders are down $2.07
at $139.72, March feeders are down $1.87 at $139.10 and April feeders are down
$1.87 at $140.22. The market not only seems to have lost its recent gusto, but
it also seems to be veering cautiously away from resistance levels.
Back to scaling lower, the lean hog contracts dip lower into Thursday's
afternoon. December lean hogs are down $0.35 at $66.00, February lean hogs are
down $0.92 at $66.95 and April lean hogs are down $0.47 at $70.40. There was
hope that Thursday's export report could have given the market some minor
support, but the complex is set on trailing lower without any strong
fundamental or technical factors aligning positively for the market.
Pork net sales of 31,300 mt reported for 2020 were up 66% from the previous
week, but down 6% from the prior four-week average. The three primary increases
were Mexico (12,900 mt, including decreases of 1,000 mt), China (7,400 mt,
including decreases of 1,300 mt) and Japan (4,200 mt, including decreases of
The projected lean hog index for 12/02/2020 is down $0.16 at $66.55 and the
actual index for 12/01/2020 is up $0.04 at $66.71. Hog prices are lower on the
National Direct Morning Hog Report, down $0.35 with a weighted average of
$56.34, ranging from $54.00 to $56.75 on 4,516 head and a five-day rolling
average of $56.44. Pork cutouts total 233.18 loads with 205.66 loads of pork
cuts and 27.53 loads of trim. Pork cutout values: up $0.56, $80.42.
ShayLe Stewart can be reached email@example.com
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