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DTN Midday Livestock Comments          09/24 12:19

   Bids Developing Throughout the Countryside for Cash Cattle

   Cattle contracts are more than willing to trade modestly higher after 
trading lower earlier this week.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Cattle contracts are continuing to trend higher and are soaking up the 
support that was absent in the earlier part of the week. The lean hog market is 
suffering from some disappointment in Thursday's export report as the market 
was hoping to see the report unveil that demand was far beyond the last couple 
of week's usual trade. Cash cattle trade is still mostly quiet, as feeders are 
pushing for higher prices again this week.

   December corn is down 5 cents per bushel and December soybean meal is down 
$8.10. The Dow Jones Industrial Average is up 147.16 points and NASDAQ is up 
110.80 points.


   Along with higher prices across the futures market, come bids from packers! 
October live cattle are up $0.37 at $107.52, December live cattle are up $0.40 
at $111.60 and February live cattle are up $0.27 at $115.07. Bids are starting 
to surface as packers have offered bids of $103 and $163 in Nebraska, $105 in 
Iowa and $103 in Texas. Feeders have yet to pull the trigger and let trade 
begin, and it wouldn't be surprising if packers have to work on those prices a 
little bit more before feeders become interested. Feeders are going to push 
packers using stronger boxed beef prices as a talking point and know 
full-heartedly that their showlists are current so there's room to roll cattle 
over to the next week if the need arises. Asking prices are around $106 to $108 
in the South, and $167 plus in the North.

   Beef net sales of 18,000 mt reported for 2020 were up 26% from the previous 
week and 36% from the prior four-week average. The three primary increases were 
from Japan (4,500 mt, including decreases of 500 mt), South Korea (4,500 mt, 
including decreases of 400 mt) and China (3,400 mt).

   Boxed prices are higher: choice up $1.71 ($217.58) and select up $0.59 
($208.19) with a movement of 75 loads (45.22 loads of choice, 10.75 loads of 
select, 3.42 loads of trim and 15.38 loads of ground beef).


   Continued weakness in the corn market and trader interest developing 
throughout the cattle complex has allowed for feeder cattle contracts to scale 
modestly higher. October feeders are up $0.35 at $141.87, November feeders are 
up $0.37 at $142.02 and January feeders are up $0.62 at $140.57. As the day's 
support solidifies, the market seems to be trading comfortably and should be 
able to maintain these levels throughout the latter part of the day.


   Whether you want to call it the market's nature or human's nature of "buy 
the rumor, sell the fact," time and time again the market is disappointed with 
how the fine details of the marketplace shake out. Thursday's export report was 
somewhat disappointing to the hog industry as the report didn't highlight any 
big news, and export demand was slightly lighter than the previous week. Adding 
to the uncertainty of the marketplace is the release of the Hogs and Pigs 
Report Thursday afternoon. Pre-report estimates are varying as COVID-19 as 
skewed the year's marketing system but as of here lately domestic demand has 
been commendable. October lean hogs are down $0.07 at $69.42, December lean 
hogs are down $1.00 at $63.35 and February lean hogs are down $0.62 at $68.45.

   Pork net sales of 37,800 mt reported for 2020 were down 25% from the 
previous week and 13% from the prior four-week average. The three primary 
increases were from Mexico (15,000 mt, including decreases of 800 mt), China 
(8,200 mt, including decreases of 1,600 mt) and Japan (4,100 mt, including 
decreases of 200 mt).

   The CME lean hog index for 9/22/2020 is up $0.72 at $72.89, and the actual 
index for 9/21/2020 is up $0.88 at $72.17. Hog prices are higher on the 
National Direct Morning Hog Report, up $0.63 with a weighted average of $64.98, 
ranging from $60.00 to $68.00 on 3,370 head and a five-day rolling average of 
$62.17. Pork cutouts total 149.71 loads with 134.41 loads of pork cuts and 
15.30 loads of trim. Pork cutout values: up $0.77, $89.74.

   ShayLe Stewart can be reached

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