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DTN Midday Livestock Comments          09/18 12:32

   Cattle Contracts Take Friday's Momentum

   Seeing the opportunity to jump higher before the week's close, cattle 
contracts rally modestly and a bump in cash prices helps support the movement.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   The board's midmorning shift to higher prices complemented the cash cattle 
market and sent dressed cattle prices in Nebraska $2.00 higher than Thursday's 
trade and $4.00 higher than last week's average. The cattle market's support is 
coming as a pleasant surprise and even though the lean hog market is trading 
lower, its losses remain mild and with news about another round of CFAP 
payments, widespread support could carry over into the lean hog complex before 
the day is over. December corn is up 1 3/4 cents per bushel and December 
soybean meal is up $6.40. The Dow Jones Industrial Average is down 76.04 points 
and NASDAQ is down 128.42 points.

   The other important news is that on Friday morning USDA released details 
about another round of CFAP payments. DTN's Ag Policy Editor Chris Clayton 
shared the specifics of the announcement, which can be found here in the Ag 
News section on DTN subscription products.
b91-6376-4a7b-ad41-ef73067a03fe. But for beef cattle, hogs and pigs the payment 
will be of the inventory owned (excluding breeding stock) from April 16,2020 to 
August 31,2020.


   Just when we thought the week's price range had been established - feedlots 
in the North continued to market their cattle vigorously, not caving early in 
the week and lo-and-behold they pulled another $2.00 (on top of what the market 
already gained earlier in the week) from packers Friday morning. Early Friday 
morning the board was indecisive on how it was going to trade but midmorning 
support continued to build and now the complex enters Friday afternoon fully 
higher. It was also interesting to see that of some of the cattle that traded, 
packers called for delivery as early as next week. Maybe packers need more 
cattle than assumed? With their willingness to pay higher prices at the end of 
the week and need of cattle delivered next week, it seems likely. October live 
cattle are up $0.45 at $107.22, December live cattle are up $0.75 at $112.05 
and February live cattle are up $0.55 at $116.32. It was surprising to see the 
morning boxed beef prices higher as consumer demand continues to pressure the 
beef sector.

   Boxed beef prices are higher: choice up $0.57 ($215.62) and select up $0.60 
($203.99) with a movement of 74 loads (48.27 loads of choice, 10.86 loads of 
select, 5.06 loads of trim and 9.79 loads of ground beef).


   Feeder cattle contracts jumped on the bandwagon; trading fully higher in 
Friday's afternoon trade. September feeders are up $1.05 at $140.95, October 
feeders are up $1.32 at $142.77 and November feeders are up $0.70 at $142.90. 
Even though the corn market is seeing a two to three cent rally, the optimism 
building in the cattle sector is outweighing the concern in the corn market.


   The lean hog market would like to trade higher but is merely stuck trading 
sideways as traders sway back and forth. October lean hogs are up $0.20 at 
$66.72, December lean hogs are down $0.32 at $63.30 and February lean hogs are 
down $0.05 at $68.15. As the complex keeps trading sideways, more resistance is 
being built at the $68.00 threshold.

   The projected lean hog index for 9/17/2020 is up $1.74 at $69.58 and the 
actual index for 9/16/2020 is up $1.42 at $67.84. Hog prices are lower on the 
National Direct Morning Hog Report, down $2.00 with a weighted average of 
$60.61, ranging from $50.00 to $64.00 on 7,465 head with a five-day rolling 
average of $58.36. Pork cutouts total 252.54 loads with 220.62 loads of pork 
cuts and 31.91 loads of trim. Pork cutout values: up $1.16, $88.19.

   ShayLe Stewart can be reached



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