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DTN Midday Livestock Comments          08/13 12:54

   Feeder Cattle Contracts Beginning to Weaken

   Live cattle and lean hog contracts head into Thursday's afternoon trade 
fully higher, but the feeder cattle complex isn't as boastful as upward 
resistance is setting in.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Heading into Thursday's afternoon hours, live cattle contracts push full 
steam ahead, the lean hog complex has seen a spark in support and meanwhile the 
feeder cattle contracts are fighting nearby resistance that is turning most of 
the contracts lower. Packers continue to hold their cards tight to their chest 
as some more cattle have traded throughout the Southern Plains, but the 
Northern Plains remain extremely quiet. December corn is up 11 1/2 cents per 
bushel and December soybean meal is up $9.80. The Dow Jones Industrial Average 
is down 51.91 points and NASDAQ is up 98.00 points.


   Live cattle contracts keep scaling higher while the cash cattle market is 
shaping up to be tough in the Northern Plains as packers seem reluctant to pay 
this week's asking prices and feeders are unwilling to budge as their supplies 
are mostly current. August live cattle are up $0.80 at $107.15, October live 
cattle are up $0.67 at $110.25 and December live cattle are up $0.32 at 
$112.87. Packers have picked up some more Southern cattle at $104 and have 
placed bids from $165 to $170 dressed in Iowa and $106 to $107 live in Iowa as 
well. Thus far feeders have let those bids sit idly on the table. Heading into 
the afternoon it will be important to see where boxed beef movement ends up as 
Wednesday was an impressive day moving 182 loads as Americans begin to prepare 
for Labor Day weekend.

   Thursday's export report shared that beef sales of 11,600 mt were reported 
for 2020 which was down 13% from the previous week and 46% from the prior 
4-week average. The three primarily increases were from Japan (2,900 mt, 
including decreases of 500 mt), China (1,900 mt) and Canada (1,400 mt, 
including decreases of 100 mt).

   Boxed beef prices are higher: choice up $1.83 ($210.92) and select up $1.51 
($197.50) with a movement of 98 loads (53.39 loads of choice, 18.75 loads of 
select, 13.47 loads of trim and 12.42 lads of ground beef).


   After three days of strong gains in the feeder cattle complex, Thursday's 
feeder cattle market is fighting modest resistance in nearby contracts. August 
feeders are steady at $145.25, September feeders are down $0.50 at $147.45 and 
October feeders are down $0.60 at $148.50. The countryside sits without any 
major feeder cattle sales this week; just the scheduled sales throughout the 
sale barns which have continued to be aggressive. But next week Superior will 
host their Big Horn Classic sale in Sheridan, Wyoming, and Western Video Market 
will host their video sale in Cheyenne, Wyoming, and the following week 
Northern Livestock Video auction is set to host their Early Fall Preview. As 
the market bounces back and forth between thinking the markets done what it can 
in the short term to believing that with the immense support for buyers there's 
more to be had -- these upcoming sales will dial-in the market's perspective as 
fall nears.


   The lean hog complex has seen nearby contracts jump upwards of $0.80 while 
deferred contracts follow in a modest fashion. August lean hogs are up $0.87 at 
$53.77, October lean hogs are up $0.82 at $52.42 and December lean hogs are up 
$0.77 at $54.17. The market's been able to slowly push cutout values modestly 
higher and hopefully Thursday's close can continue with the market's strength. 
As the feeder cattle contracts grow and traders worry about how much more 
upside potential is in the market, the lean hog complex becomes more appealing.

   The projected lean hog index for 8/11/2020 is up $0.03 at $53.82, and the 
actual index for 8/10/2020 is up $0.77 at $53.79. Hog prices are unavailable on 
the National Direct Morning Hog Report due to confidentiality. Pork cutouts 
total 184.29 loads with 148.92 loads of pork cuts and 35.38 loads of trim. Pork 
cutout values: up $4.01, $76.45.

   Pork net sales of 10,500 mt were reported for 2020 which was down 66% from 
the previous week and 70% from the prior 4-week average. The three primarily 
increases were from Mexico (8,800 mt, including decreases of 200 mt), Japan 
(2,700 mt, including decreases of 900 mt) and Canada (1,600 mt, including 
decreases of 400 mt).

   ShayLe Stewart can be reached



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