DTN Midday Livestock Comments          07/07 12:13

   Livestock Contracts Lower Tuesday After Monday's Rally 

   Livestock contracts are taking a second to pause and determine if the recent 
rally was where the market needs to go. 

ShayLe Stewart
DTN Livestock Analyst

   GENERAL COMMENTS:

   The optimism that circulated through livestock futures late last week and 
Monday disappeared Tuesday as all the contracts are lower as we move into 
Tuesday afternoon. As strange as it may be, going against all fundamentals, the 
market seems to have some underlying support. Determining whether the market's 
regression on Tuesday is a simply a chance to catch a break or is a pivotal 
turning point back to lower trading ranges is yet to be solidified. December 
corn is down 4 1/2 cents per bushel and December soybean meal is down $1.80. 
The Dow Jones Industrial Average is down 210.80 points and Nasdaq is up 23.44 
points.

   LIVE CATTLE:

   Live cattle futures are taking a minute to slightly regress and consider the 
recent change in direction. August live cattle are down $0.27 at $99.82, 
October live cattle are up $0.02 at $103.95 and December live cattle are down 
$0.17 at $106.87. Seeing where Tuesday's boxed beef movement ends up will be 
interesting as the midday report only showed a small 55 load count. At midday, 
cash cattle trade is mostly quiet but one regional came into Nebraska and 
bought cattle for $157, $3.00 higher than last week's weighted average. Trade 
has been mostly quiet for the week without a trend.

   Boxed beef prices are higher: choice up $0.58 ($206.04) and select up $0.89 
($197.86) with a movement of 55 loads (27.74 loads of choice, 13.58 loads of 
select, 5.75 lads of trim and 7.98 loads of ground beef).

   FEEDER CATTLE:

   Feeder cattle sales were sparse Monday afternoon as several sale barns took 
the day off. The feeder cattle complex contemplated for a long time whether 
contracts should follow the live cattle momentum; after enough time and 
pressure to do so, the feeder complex did follow suit. But just as the live 
cattle contracts started to weaken, the feeder cattle contracts were quick to 
rethink. Nearby contracts are taking the biggest step backwards while deferred 
contracts are only trading slightly lower. August feeder cattle are down $1.05 
at $135.07, September feeders are down $0.80 at $136.42 and October feeders are 
down $0.47 at $137.37.

   LEAN HOGS:

   The hog complex isn't supporting Monday rallying except for in the August 
and October contracts, which is largely traders moving their positions before 
the July contract expires. July lean hogs are down $0.20 at $44.75, August lean 
hogs are steady at $49.27 and October lean hogs are up $0.12 at $49.17. The 
glut of hogs that still needs to be processed is burdensome on nearby contracts 
but looking past 2020 (let's hope this year's madness ends there) prices are 
far more optimistic, trading anywhere from $60.50 to $76.77 in 2021.

   The projected lean hog index for 7/2/2020 is up $0.64 at $45.66 and the 
actual index for 7/1/2020 is down $0.26 at $45.02. Hog prices are higher on the 
National Direct Morning Hog Report, up $0.59 with a weighted average of $29.11, 
ranging from $24.00 to $30.19 on 5,310 head and a 5-day rolling average of 
$28.86. Pork cutouts total 210.23 loads with 189.88 loads of pork cuts and 
20.35 loads of trim. Pork cutout values: up $1.14, $65.48.

   ShayLe Stewart can be reached shayle.stewart@dtn.com




(c) Copyright 2020 DTN, LLC. All rights reserved.