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DTN Midday Livestock Comments 11/19 11:53
Without Enough Fundamental Support, Cattle Contracts Fall Lower at Midday
Wednesday
Some light cash cattle trade is developing in the North at $345, which is
$6.00 lower than last week's weighted average.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The cattle contracts are trading lower into Wednesday's noon hour as the
market is disgruntled with the lack of fundamental support. Some light trade
has developed in the North, where dressed cattle are trading at $345, which is
$6.00 lower than last week's weighted average. December corn is down 6 1/2
cents per bushel and December soybean meal is down $6.90. The Dow Jones
Industrial Average is down 158.50 points and the NASDAQ is down 43.11 points.
LIVE CATTLE:
Without a steadfast stamp of approval from the market's fundamentals, the
live cattle contracts are back to trading lower. The market would anticipate
that beef demand will begin a sharp fourth-quarter rally in the next week or
two, as consumers secure their meat for the Christmas holiday. Still, with beef
prices already high compared to years past, the market sits in an unknown
position, unsure how much of a fourth-quarter rally is really going to play
out. December live cattle are down $5.27 at $214.75, February live cattle are
down $4.95 at $215.90 and April live cattle are down $4.47 at $216.85. And
making matters even worse is the fact that some light cash cattle trade has
begun to develop. Some light dressed cattle trade has developed in the North at
$345, which is $6.00 lower than last week's weighted average. No trade has
developed in the South yet, but bids are currently on the table at $224, and
asking prices are firm at $230.
Boxed beef prices are mixed: choice up $0.31 ($372.26) and select down $1.89
($353.06) with a movement of 116 loads (81.70 loads of choice, 23.15 loads of
select, 4.79 loads of trim and 6.66 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is also trading sharply lower as the market
continues to closely follow the direction of the live cattle contracts. January
feeders are down $5.95 at $320.30, March feeders are down $6.17 at $312.22 and
April feeders are down $6.22 at $309.52. And until something changes the
direction of the live cattle complex, the feeder cattle market will likely
trade lower.
LEAN HOGS:
Although midday pork cutout values are lower, once again, the lean hog
contracts are trading slightly higher into Wednesday's noon hour as the market
has seemed to stumble into some technical support. December lean hogs are up
$0.87 at $78.77, February lean hogs are up $1.20 at $79.22 and April lean hogs
are up $1.62 at $83.25. It will be interesting to see if the market is able to
maintain this momentum through the day's close, as neither cash prices nor pork
cutout values are higher, which makes this move solely a technical push.
The projected lean hog index is delayed from the source. Hog prices are
unavailable on the Daily Direct Morning Hog Report because of confidentiality.
However, we can see that only a measly 88 head have traded this morning and
that the market's five-day rolling average now sits at $76.55. Pork cutouts
totaled 187.76 loads with 165.75 loads of pork cuts and 22.01 loads of trim.
Pork cutout values: down $1.22, $94.17.
ShayLe Stewart can be reached at shayle.stewart@dtn.com
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