DTN Midday Livestock Comments 08/16 11:27
Cattle Run Higher While Corn Sinks
The cattle complex is running into Tuesday's afternoon fully higher as the
corn market's weakness comes as warmly welcomed news.
DTN Livestock Analyst
The cattle complex has charged into Tuesday's market seeming unwilling to
let time pass by without capitalizing on the corn market's dip. Thankfully for
cattlemen looking to sell both fat cattle and feeders/calves, the market's
support is seeping into the complex again from multiple angles as not only are
corn prices lower but boxed beef prices are higher and buying interest hasn't
ceased. December corn is down 19 1/2 cents per bushel and December soybean meal
is down $7.70. The Dow Jones Industrial Average is up 248.02 points.
The live cattle complex has taken a stronger stance in Tuesday's market
after closing lower Monday afternoon. Traders grew gun shy of the cattle sector
as Monday's hours passed them by while they seemed to be looking for renewed
fundamental support before they drove the contracts higher yet again.
Aggressive boxed beef prices have helped traders feel confident in trading
Tuesday's complex higher, as well as the fact that slaughter speeds haven't
lagged. August live cattle are up $1.85 higher at $14160, October live cattle
are up $1.82 higher at $145.62 and December live cattle are up $1.40 at
$151.12. As the market continues to push higher and stretch the market's
three-month high to a new mark, feedlots are taking in the futures support as
they've already upped their asking prices this week. At Tuesday's start, asking
prices in the South were noted at $142 plus, but as the morning's hours have
passed by Southern feedlots aren't shy about now asking for $142 to $145. There
hasn't been any trade develop throughout the day at this point, but trade
should begin come Wednesday.
Boxed beef prices are higher: choice up $1.88 ($266.34) and select up $1.09
($240.81) with a movement of 80 loads (46.21 loads of choice, 6.64 loads of
select, 11.03 loads of trim and 16.43 loads of ground beef).
The feeder cattle market seems to be shaking the Monday blues as the market
is scaling well over $2.00 higher in all of its contracts. As the corn market
slides another $0.16 to $0.18 lower Tuesday morning, the feeder cattle complex
is seeming unwilling to let the day pass by without capitalizing on weaker
inputs. August feeders are up $2.20 at $182.12, September feeders are up $2.85
at $185.85 and October feeders are up $2.70 at $188.30. Sales throughout
Monday's trade showed that once again buyers are continuing to scout the
countryside for any yearlings as they're in short supply and are even willing
to take calves to higher prices as the realization that the market doesn't
possess as many calves as years past.
After keeping with last week's elevated tone in Monday's market, the lean
hog complex has taken a bit of a nosedive approach to Tuesday's market as the
nearby contracts fall $1.00 to $2.00 lower. October lean hogs are down $2.35 at
$98.22, December lean hogs are down $1.65 at $89.20 and February lean hogs are
down $1.17 at $91.75. As the market reached new contract highs last week,
traders seem uncomfortable taking the complex any higher as processing speeds
are being cut. The cash hog market is again showing that market-ready supplies
are in extremely thin supply, as the market's top big jumped $9.00 from Monday
to $135. Packers are trying to minimize their need to support the cash market
while supplies are so thin by cutting production speeds.
The projected lean hog index for Aug. 15 is down $0.65 at $121.06, and the
actual index for Aug. 12 is down $0.22 at $121.71. Hog prices are higher on the
Daily Direct Morning Hog Report, up $5.73 with a weighted average of $120.55,
ranging from $114.00 to $135.00 on 4,743 head and a five-day rolling average of
$123.76. Pork cutouts total 206.02 loads with 188.74 loads of pork cuts and
17.28 loads of trim. Pork cutout values: up $0.37, $125.28.
ShayLe Stewart can be reached firstname.lastname@example.org
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