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DTN Midday Livestock Comments          08/04 12:22

   Cattle Contracts Weaken Following Monday's Progression

   Seeming unable to support Monday's advancement, cattle contracts weaken.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   Heading into Tuesday's afternoon trade, the feeder cattle complex; in 
particular, is having a difficult time keeping its recent advancement, but the 
live cattle contracts aren't far behind in their recent downward trade. There 
is some isolated cash cattle trade starting to circulate for upwards of $3.00 
higher than last week's average as cattle are trading in parts of Kansas for 
$100. December corn is down 6 3/4 cents per bushel and December soybean meal is 
down $5.60. The Dow Jones Industrial Average is up 95.54 points, and the NASDAQ 
is down 9.27 points.


   Live cattle prices dip lower despite positivity building throughout the 
country with cash cattle prices. August live cattle are down $0.65 at $102.37, 
October live cattle are down $0.77 at $107.50 and December live cattle are down 
$0.65 at $111.17. Feeling fundamentally pressured like the feeder cattle 
contracts, the market's recent jump to higher ground is seeming like a load 
that most traders don't feel like supporting nor carrying. Though there's 
pressure for contracts to trade lower on the board, the consensus for this 
week's cash cattle trade seems to be higher. There's been some isolated trade 
in Kansas at $100, $3.00 higher than last week's average, but other than that 
the market is still quiet. Asking prices seem to be $100 to $102 in the South, 
while cattle in the North are priced at $105 live to $165 dressed.

   Boxed beef prices are mixed: choice up $0.22 ($204.88) and select down $0.15 
($190.25) with a movement of 78 loads (43.85 loads of choice, 12.74 loads of 
select, 10.45 loads of trim and 11.28 loads of ground beef).


   Feeder cattle contracts are struggling to keep with recent momentum, falling 
anywhere from $0.35 to $0.82 lower Tuesday morning. August feeders are down 
$0.52 at $144.35, September feeders are down $0.82 at $146.25 and October 
feeders are down $0.42 at $146.80. Heading into the afternoon it's going to be 
a bit of a waiting game to see if the market has exhausted its rally and is 
simply buying time to build again later in the week or if the last three days' 
worth of trade was simply overdone. Bull-spreaders look at the support in the 
cash cattle market and like where things could be headed; whereas 
bear-advocates say enough is enough and that the market's recent jump forward 
was risky.


   The lean hog complex continues to trade sideways into Tuesday's afternoon 
hours, unable to draw attention to the complex even with cattle contracts 
scaling lower. August lean hogs are down $0.10 at $49.77, October lean hogs are 
up $0.70 at $49.10 and December lean hogs are up $0.42 at $50.50. Even though 
the complex had some stronger cash trade last week, the market seems stuck 
trading merely sideways, pressured by supply and needing pork demand to rise to 
help bolster prices into a higher trading range.

   The projected lean hog index for 8/3/2020 is down $0.30 at $52.81 and the 
actual index for 7/31/2020 is down $0.42 at $53.11. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.37 with a weighted average of 
$39.93, ranging from $39.00 to $40.00 on 3,393 head a five-day rolling average 
of $41.01. Pork cutouts total 272.22 loads with 240.31 loads of pork cuts and 
31.90 loads of trim. Pork cutout values: down $0.06, $66.72.

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

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