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DTN Midday Livestock Comments          12/02 12:22

   Cattle Contracts Gaining Support into the Afternoon

   Early Wednesday morning it wasn't clear how the market was going to trade as 
traders were slow to invest, but as the day has progressed traders are showing 
support again for the cattle contracts.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Early Wednesday morning the livestock complex wasn't sure which way the 
day's chips were going to fall. At times all three contracts were trading lower 
but as the day moved closer and closer to the noon hour more support has 
solidified in the cattle contracts, helping move the markets to a slightly 
higher position. There is some cash cattle trade starting to develop in parts 
of Texas but so far, it's been a small enough scale and trade is still expected 
to wait until later in the week. March corn is up 2 cents per bushel and 
January soybean meal is down $1.90. The Dow Jones Industrial Average is down 
27.42 points and NASDAQ is down 20.48 points.

   LIVE CATTLE

   As the noon hour approaches, the live cattle market is seeing more and more 
support develop throughout the contracts while is perfect timing as cash cattle 
trade is starting to draw some packer interest. December live cattle are down 
$0.05 at $110.57, February live cattle are up $0.40 at $113.60 and April live 
cattle are up $0.30 at $117.10. With boxed beef prices starting to top, 
feedlots need the board to support a higher cash cattle trade in order to 
easily get this week's market moved higher. There's been some light trade 
reported in parts of Texas at $110 to $112, which is mostly steady with last 
week's trade. Asking prices are around $112 to $113 in the South and $175 in 
the North.

   The Fed Cattle Exchange Auction listed a total of 1,025 head, of which 488 
actually sold, 393 head were listed as unsold, and 144 head were listed as PO 
(Passed Offer). The state by state breakdown looks like this: Texas 779 total 
head, with 488 head sold at $110.50-$110.75, 147 head unsold, 144 head listed 
as PO ($110.50); Nebraska 246 total head, no of which none sold. The delivery 
date/weighted averages breakdown is as listed: 1-9 day delivery: 488 head 
total, 197 head sold, with a weighted average price of $110.75; 1-17 day 
delivery 537 head total, 291 head sold, with a weighted average price of 
$110.50.

   Boxed beef prices are mixed: choice down $1.70 ($241.70) and select up $1.13 
($224.21) with movement of 75 loads (48.01 loads of choice, 8.22 loads of 
select, 6.86 loads of trim and 12.15 loads of ground beef).

   FEEDER CATTLE

   The fact that traders had cold feed early Wednesday morning and that the 
fact that the corn market is seeing a slight rally isn't bothering the feeder 
cattle market one bit. January feeders are up $0.22 at $141.87, March feeders 
are up $0.40 at $141.05 and April feeders are up $0.27 at $142.15. It seems 
like the market will have successful day as the support around the noon hour is 
building, it will just be important to monitor how the contracts react to the 
market's looming resistance levels.

   LEAN HOGS

   The lean hog market is being pressured to trade lower again Wednesday 
morning and so far contracts haven't tried fighting the market's downward 
notion. December lean hogs are down $0.60 at $66.37, February lean hogs are 
down $0.72 at $68.02 and April lean hogs are down $0.40 at $70.97. Again, 
looking at the pork cutout value its easy to get excited about seeing a 
positive figure but until there's followed through support, a day higher 
following by two to three days of lower trade doesn't amount to much. 

   The projected lean hog index for 12/01/2020 is up $0.04 at $66.71 and the 
actual index for 11/30/2020 is down $0.14 at $66.67. Hog prices are lower on 
the National Direct Morning Hog Report, down $0.34 with a weighted average of 
$56.42, ranging from $50.00 to $58.50 on 5,327 head and a five-day rolling 
average of $56.46. Pork cutouts total 187.74 loads with 159.70 loads of pork 
cuts and 28.04 loads of trim. Pork cutout values: up $4.08, $81.16.

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

   **

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