DTN Midday Livestock Comments 10/18 12:09
Livestock markets continue to scale lower and lower and in all three cattle
charts it's becoming more apparent that the wondered-about correction has
By ShayLe Stewart
DTN Livestock Analyst
Remember the Johnny Cash song, Ring of Fire? Well today's market (though it
could be much worse) somewhat feels like that, "I went down, down, down, and
the flames went higher, and it burns, burns, burns, the ring of fire, the ring
of fire." October live cattle are down $2.62, December live cattle are down
$1.65, November feeder cattle are down $2.50 and December lean hogs are down
$1.40. Given the fact that none of the markets are limit down, we clearly know
and understand that things could be worse and that this correction was
anticipated. BUT ... it never is a rosy sight to see the markets bleeding lower
on Friday when there still is a slug of fat cattle to sell and there was early
morning confirmation of massive pork sales. December corn is down 3 1/2 cents
per bushel and December soybean meal is up $2.00. The Dow Jones Industrial
Average is down 206.62 points and NASDAQ is down 104.40 points
Live cattle contracts all showing significant losses Friday morning with the
spot October contract showing the biggest loss, down $2.60 at $109.80 and
December live cattle are down $1.62 at $112.72. As mentioned earlier, after
getting used to higher and higher prices, a correction doesn't 'feel good' and
it's chipping away at current prices stings. However, it is positive to be
getting this well-known and much-anticipated correction out of the way so that
the market can establish a stable and steady position hopefully long before the
upcoming 2020 calendar arrives.
A light trade is being reported in parts of the South at $108, steady to
$1.00 lower than the bulk of last week's trade. A few deals set for delayed
delivery have been reported in Eastern Nebraska at $173 (set for the weeks of
November 4 and November 11). Asking prices are around $112 in the South, and
$178 to $180 in the North.
Midday boxed beef cutouts are mixed: choice down $0.23 ($217.88) and select
up $1.51 ($194.11). Friday's offering of boxed beef comes to 47 loads (22.82
lads of choice cuts, 14.17 loads of select cuts, no loads of trim and 10.38
loads of ground beef).
Feeder cattle markets have taken Friday's slug the hardest. Feeder markets
range anywhere from $1.45 to $2.42 lower. Sale barn markets as of Thursday have
been able to rally higher prices and attract buyers to come bids on long runs
of calves. Friday's weakening board could begin to affect those prices though.
November feeder cattle prices are down $2.27 at $142.05.
Unable to be inspired by the notice of higher net sales early Friday
morning, which made a new marketing-year high, lean hog prices still trail
downward. Increased purchases came from Mexico 132,400 metric tons, China
94,000mt, Japan 46,400mt, South Korea 9,900mt, and Canada 5,800mt. The lean hog
sector is down, but not nearly as much as the live cattle board and feeder
cattle board. December lean hogs are down $1.37 at $66.77 and all other
contracts range $0.05 to $1.02 lower except for February 2021, which is up
The projected lean hog index for 10/16/19 is up $0.96 at $64.90, and the
actual for 10/15/19 came to $63.94 up $1.02. Prices are down on the National
Direct Morning Hog Report, down $0.75 with a weighted average of $57.05,
ranging from $55.00 to $60.00 on 4,400 head sold and a five-day rolling average
of $57.79. Pork cutouts totaled 129.73 loads with 117.02 loads of pork cuts and
12.72 loads of trim. Pork cutouts values are up $0.16 at $76.44.
ShayLe Stewart can be reached firstname.lastname@example.org
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