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DTN Midday Livestock Comments          01/15 12:16

   Renewed Support Sparks Higher Trade in Livestock Contracts

   Heading into Friday's afternoon trade the livestock contracts are met with 
renewed support after a difficult week of immense pressure.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Luckily traders have opted to ease back into the livestock contracts with 
most willing to invest in the feeder cattle contracts upon slightly weaker 
nearby corn prices. There's still a lot of time to pass before the day closes, 
but if the market can hold is support and head into next week with some modest 
gains from Friday -- hopefully the week will be given an opportunity at least 
to trade mildly higher amid bearish pressures. March corn is down 2 1/4 cents 
per bushel and March soybean meal is down $0.40. The Dow Jones Industrial 
Average is down 125.46 points and NASDAQ is down 79.60 points. Nothing feels 
better than a little redemption before the week's close.


   The live cattle contracts are soaking up all the market's interest as the 
complex trades fully higher into the afternoon. It's encouraging to see the 
market's higher trade, which is complemented by another day of higher boxed 
beef prices and gaining open interest levels. Meanwhile the cash market was 
disappointing this week as live cattle in the South gave up $1.00 to $2.00 and 
dressed cattle in the North traded roughly $4.00 lower. Friday's cash cattle 
market has been extremely quiet without any new bids hitting the table and no 
rush on feedlots to sell more cattle before the day's close. February live 
cattle are $0.50 higher at $112.57, April live cattle are $0.97 higher at 
$118.20 and June live cattle are $1.17 higher at $116.12.

   Boxed beef prices are higher: choice up $0.25 ($213.62) and select up $2.08 
($203.15) with a movement of 81 loads (45.75 loads of choice, 10.34 loads of 
select, 10.72 loads of trim and 14.32 loads of ground beef).


   As the market's attention rolls from the January feeder cattle contract to 
the March feeder cattle contract, thankfully in both markets a support plan 
around $132.50 to $133.25 has developed and the contracts aren't seeming so 
pressured that they need to trade below such levels. Renewed support has 
invigorated the feeder cattle contracts and offered as much as $2.00 gains 
throughout the entire sector. January feeders are up $2.25 at $134.85, March 
feeders are up $2.60 at $135.97 and April feeders are up $2.40 at $138.40.


   The nearby lean hog contracts are enjoying a modest rally like the cattle 
contracts while the deferred contracts trade just mildly lower. Still the 
market's fundamentals remain split as the cash market continues to trade lower 
as supplies are ample and packers don't have to work to find readily available 
hogs. It's helpful though that the day's cutout values are seeing renewed 
support again and hopefully the day will be able to keep its support through 
closing. February lean hogs are up $1.37 at $67.70, April lean hogs are up 
$0.52 at $72.60 and June lean hogs are up $0.15 at $84.47.

   The projected lean hog index for 1/14/2021 is down $0.34 at $65.53 and the 
actual index for 1/13/2021 is up $0.39 at $65.87. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.95 with a weighted average of 
$52.75, ranging from $46.00 to $55.00 on 4,650 head and a five-day rolling 
average of $54.20. Pork cutouts total 240.64 loads with 222.63 loads of pork 
cuts and 18.01 loads of trim. Pork cutout values: up $2.24, $82.79.

   ShayLe Stewart can be reached



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