DTN Midday Livestock Comments          10/14 12:21

   Wavering Trade Agreements, But Still Pressing On

   Although most of the marketplace was somewhat disappointed in the China-U.S. 
trade dealings, livestock markets have seized higher prices Monday morning.

By ShayLe Stewart
DTN Livestock Analyst

General Comments

   "Good morning, Monday," livestock markets shouted as Monday morning has 
opened to a surprisingly eager and optimistic livestock complex. Spurred by the 
excitement generated in the late cash cattle trade, markets have performed well 
for a Monday morning, especially considering that many Wall Street firms found 
the trade conversations with China somewhat disappointing. December corn is 
down 1 1/4 cents per bushel and December soybean meal is up $0.10. The Dow 
Jones Industrial Average is up 17.06 points and NASDAQ is down 2.47 points. 

   LIVE CATTLE 

   Live cattle markets are posting gains early Monday as markets are still 
fueled by higher cash cattle prices last week. Last week, cash cattle prices 
saw a $3.13 jump in prices in the five-area feeding region; and all in all, the 
cash market has rallied a substantial $12 since the Tyson fire and it looks 
like pressure will continue early this week. Packers will have to continue to 
partake in the negotiated market as they need cattle and are keeping processing 
plants plenty busy. Prices will likely dip down and cool off a bit sometime in 
November as Thanksgiving and Christmas holidays don't center around beef dishes 
and are obviously days that the futures market is closed. December live cattle 
are up $1.22 at $113.37, and all live cattle contracts are showing support of 
$0.67 to $1.17 gains. 

   Midday boxed beef prices are up: choice up $0.03 ($215.69) and select up 
$0.05 (188.73). Monday's offering of boxed beef movement totaled 40 loads 
(19.06 loads of choice cuts, 8.96 loads of select cuts, 5.04 loads of trim and 
7.28 loads of ground beef). 

   Formula totals for last week were mixed, higher in Nebraska and lower in 
Kansas and Texas: Kansas 76,766(down 4,641), Nebraska 60,587(up 6,540), Texas 
95,329(down 2,284). Total trade volume was also mixed higher in Nebraska and 
lower in the South: Kansas 87,523(down 5,784), Nebraska 90,864(up 4,965), Texas 
100,913(down 4,244). New showlists appear to also be mixed, slightly higher in 
Nebraska/Colorado, somewhat smaller in Kansas, and lower in Texas. A few early 
asking prices have been noted in parts of Nebraska at $115 live and $180 
dressed.

   FEEDER CATTLE 

   Countryside feeder cattle markets could be in for a volatile whirlwind this 
week. First, the sheer amount of snow that accumulated in North Dakota and 
other parts of the northern region brings great stress to cow/calf producers 
and their cattle. Even with proper preconditioning shots and vaccinations, 
calves endure a lot of stress the first initial weeks after being weaned and 
when hit with a snow storm, sickness is the next thing that managers have on 
their mind. Secondly, transportation of these newly weaned calves could be an 
issue as many of the northern raised calves are trucked down the Corn Belt, and 
even getting calves shipped to local sale barns can be challenging when dealing 
with slick, icy roads, or mud. Nevertheless, feeder cattle markets are 
expecting big runs this week, and health, quality and pre-weaning shots will 
short the calves hard this week on price. Despite the nasty weather and 
potential shipping complications, the board is in support for higher cattle 
markets early this week. Spot October live cattle futures are up $1.30 at 
$145.40 and November feeder cattle are up $1.65 at $145.90. 

   LEAN HOGS 

   Friday's chatter surrounding the Chinese trade agreement left the market 
hopeful but as more time has passed, more questions seem to be unanswered. We 
know that some progress has been made, but there is still plenty of time for 
things to go astray, which is exactly what hog producers fear with their 
growing numbers and vast supply of market-ready hogs. Thankfully, the fact 
remains than China and surrounding countries will need a large supply of pork 
imported to offset the loss of their herds. United States hog producers pray 
that those imports can be largely from them. December lean hogs are down $0.65 
at $68.97 but most of the lean hog market is finding moderate support in other 
contracts.

   The projected lean hog index for 10/11/19 is up $0.93 at $62.11, and the 
actual lean hog index for 10/10/19 came to $61.18 up $0.53. Prices are 
unchanged on the National Direct Morning Hog Report with a weighted average 
price of $56.61 ranging from $50.00 to $60.00 on 8,016 head sold, and a 
five-day rolling average of $54.25. Pork cutouts totaled 119.97 loads with 
103.81 loads of pork cuts and 16.17 loads of trim. Pork cutouts values are 
$0.91 higher at $78.43. 

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


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