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DTN Midday Livestock Comments          07/08 12:53

   Livestock Contracts Aren't Too Optimistic Heading Into the Afternoon 

   Livestock contracts have had a change of heart as all three markets trade 
lower with little support insinuating that higher trade is sound move. 

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Livestock contracts continue to trade mostly lower into Wednesday's 
afternoon hours with resistance becoming more and more apparent in all three of 
the different markets. The cash markets are trading split as cash cattle are 
trending steady to somewhat higher than a week ago while the cash hog market 
has slipped lower. December corn is down 1/2 cent per bushel and December 
soybean meal is down $0.20. The Dow Jones Industrial Average is up 47.26 points 
and NASDAQ is up 91.11 points.


   Producers liked seeing the August live cattle contract trade above $1.00 
throughout Monday as it yielded some optimism but unfortunately the resistance 
sitting at that threshold has been more than the market seems to be able to 
manage. August live cattle are down $0.92 at $99.07, October live cattle are 
down $0.90 at $103.27 and December live cattle are down $0.65 at $105.35. Cash 
cattle trade picked up after the FCE and has sold some Southern cattle at $95 
-- steady with this week's trade but $1.00 higher than a week ago. Thus far 
sellers in the North have yet to accept the bids on the table and we may see 
packers up their bids in those regions as showlists are slimmer in Nebraska and 
Colorado this week.

   The Fed Cattle Exchange Auction listed a total of 1,390 head, with 659 
actually sold, 731 head listed as unsold, and zero head listed as PO (Passed 
Offer). The state-by-state breakdown looks like this: Kansas 1,048 total head, 
with 659 head sold at $95.00-$95.25, 389 head unsold; Nebraska 123 total head, 
all went unsold; Texas 219 total head, all went unsold. The delivery 
date/weighted averages breakdown is as listed: 1-9-day delivery: 643 head 
total, 509 head sold, with a weighted average price of $95.16; 1-17 day 
delivery 747 head total, 150 head sold, with a weighted average price of $95.00.

   Boxed beef prices are lower: choice down $0.77 ($204.53) and select down 
$1.21 ($195.63) with a movement of 88 loads (44.74 loads of choice, 19.32 loads 
of select, 6.06 loads of trim and 17.90 loads of ground beef).


   Feeder cattle contracts are not enthused and once again are continuing to 
trade lower into the afternoon. August feeders are down $0.87 at $134.05, 
September feeders are down $0.62 at $135.70 and October feeders are down $0.45 
at $136.70. The board continues to trade lower but surprisingly cash feeder 
cattle are still trading well throughout the countryside.


   The excited that spurred the cash hog market has dwindled into Wednesday as 
now both cash hogs and the board are trading lower. July lean hogs are down 
$0.50 at $44.02, August lean hogs are down $0.75 at $48.12 and October lean 
hogs are up $0.30 at $48.92. As the July contract is set to expire in a week, 
traders are looking towards the end of the year to invest and see how upside 
potential there. Hopefully at that point, the majority of the backlog is worked 
through and supply and demand can be somewhat normal.

   The projected lean hog index for 7/7/2020 is down $0.55 at $45.35, and the 
actual index for 7/6/2020 is up $0.24 at $45.90. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.27 with a weighted average of 
$29.10, ranging from $24.00 to $30.19 on 6,579 head and a five-day rolling 
average of $28.95. Pork cutouts total 170.91 loads with 156.26 loads of pork 
cuts and 14.65 loads of trim. Pork cutout values: up $0.18, $62.78.

   ShayLe Stewart can be reached

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