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DTN Midday Livestock Comments          10/23 12:21

   End-of-Week Slump Continues

   A few contracts show small gains, but most live cattle, feeder cattle, and 
lean hog futures contracts are moving lower at the middle of Friday's session.

Elaine Kub
Contributing Analyst

   General Comments

   A few nearby live cattle contracts are peeking into positive territory in 
the middle of Friday's session, but overall, the tone of livestock trade 
remains bearish with lower momentum carrying through from the past four 
sessions and a big cattle-on-feed report expected. December corn is up 2 cents 
per bushel and December soybean meal is up $0.60 per ton. The Dow Jones 
Industrial Average is down 152 points and NASDAQ is down 42 points.


   December live cattle are up $0.45 at $103.925, February live cattle are up 
$0.225 at $107 and April live cattle are down $0.175 at $109.70. The trade 
continues to look to Friday afternoon's Cattle on Feed numbers, which are 
bearishly expected to show record-large October inventory in the range of 11.65 
million head. Bear in mind, however, that while the raw October 1 number of 
animals may be large, many of the new arrivals this fall have been coming off 
of pastures notably light in weight, with extreme and exceptional drought still 
reigning over Colorado and most of the western U.S. cattle country. Earlier 
this week Northern dressed deals ranged from $163 to $165, which is mostly $3 
to $4 lower than last week. Southern cattle have traded for mostly $106, which 
is mostly $2 lower than last week.

   Boxed beef prices are higher: choice up $0.11 ($208.97) and select up $1.02 
($192.10) with a movement of 75 loads (34.22 loads of choice, 6.94 loads of 
select, 23.73 loads of trimmings, and 10.07 loads of ground beef).


   With the nearby corn futures contract hitting a fresh yearly high at $4.19 
3/4 in intraday movement Friday, the conservative feeder cattle pricing at sale 
barns and on the futures board will likely continue. The October contract, up 
$0.175 at $134, has experimented with some small gains off and on through the 
session, but deferred contracts portray the more overwhelming sense of 
bearishness that has been true of feeder cattle contracts since Monday's slide. 
The November contract is down $0.175 at $130.25 and the January 2021 contract 
is down $0.125 at $126.075.


   There was virtually no question that hog futures contracts would be headed 
toward a lower weekly close as the Friday trading session rounds out, and 
although the December contract is up $0.75 at $66.95, deferred contracts are 
indeed staying on their downward course. The February contract is down $0.125 
at $66.725 and the April contract is down $0.35 at $69.35.

   The projected lean log index for 10/22/2020 is down $0.06 at $78.54 and the 
actual index for 10/21 is down $0.09 at $78.60. The National Direct Morning Hog 
report was delayed Friday due to packer submission problems, but Thursday's 
weighted average was $59.80 after a five-day rolling average of $60.31. Pork 
cut-outs total 187.83 loads with 174.61 loads of pork cuts and 13.22 loads of 
trim. Pork cut-out values: down $0.11, $98.73.

   Elaine Kub can be reached elaine.m.kub@gmail.com


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