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DTN Midday Livestock Comments          01/20 12:06

   Mixed Trade Continues throughout Livestock Contracts

   It's another day of mixed trade as the feeder cattle and lean hog contracts 
absorb the market's support but leave the live cattle contracts to wane lower.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   The livestock contracts continue to trade split heading into Wednesday's 
afternoon as the live cattle market is trading mostly lower but the lean hog 
contracts have found the fundamental support needed to yield a higher trading 
day. The cash cattle market is still quiet, but packer interest should improve 
throughout the day. March corn is down 1 1/2 cents per bushel and March soybean 
meal is down $5.40. The Dow Jones Industrial Average is up 210.75 points and 
NASDAQ is up 230.49 points.

   LIVE CATTLE

   Other than in the spot February live cattle contract, losses are seen 
throughout the live cattle complex as the deferred contracts are seeming to 
adjust to lower price levels even though the market was hopeful that the in 
time those higher price levels would be attainable. February live cattle are up 
$0.40 at $113.75, April live cattle are down $0.27 at $119.07 and June live 
cattle are down $0.60 at $116.12. The cash cattle market continues to be very 
quiet though its likely that packer acquisition will improve later in the day. 
Feedlots have a tough job ahead of them as packers will fight tooth and nail to 
keep the cash market lower, but if the bulk of the week's trade can hold out 
until later in the week then the market stands a chance to push prices $1.00 
higher verses holding at steady. Helping add to feedlots ability to demand 
higher prices is the strengthening boxed beef market.

   The Fed Cattle Exchange Auction listed a total of 1,547 head, of which 567 
actually sold, 980 head were listed as unsold, as they did not meet the reserve 
prices, that ranged from $110 to $112. Opening prices ranged from $108 to $109, 
high bids ranged from $110.50 to $111. The state by state breakdown looks like 
this: Kansas 299 total head, all 299 head sold at $110.75 (grid based); Texas 
1,248 total head, with 268 head sold at $110.50-$111.00 (live), 980 head went 
unsold.

   Boxed beef prices are higher: choice up $0.91 ($218.40) and select up $0.50 
($206.94) with a movement of 85 loads (55.73 loads of choice, 10.31 loads of 
select, 10.37 loads of trim and 8.22 loads of ground beef).

   FEEDER CATTLE

   The feeder cattle contracts continue to rally, adding to what Tuesday was 
already able to secure and continuing to take advantage of the support the 
market's offering while corn prices trade lower. January feeders are up $0.80 
at $135.20, March feeders are up $1.07 at $137.87 and April feeders are up 
$1.05 at $140.65. The market has plenty of upside potential, and so long as 
support continues to encourage the market's trade, higher positioning can 
easily be obtained.

   LEAN HOGS

   Tuesday was a frustrating trade for the lean hog market but without 
fundamental support the market was able to sustain at the levels it attempted 
to trade at. Thankfully with Wednesday's arrive the cash market has traded 
stronger and pork cutout values also show strong profits. February lean hogs 
are up $1.20 at $67.67, April lean hogs are up $0.97 at $72.40 and June lean 
hogs are up $0.72 at $83.72. In order for the lean hog market to really 
capitalize on these fundamental strong points it will be important that the 
fundamental factors continue to trade positively through the day's close.

   The projected lean hog index for 1/19/2021 is up $0.02 at $65.67, and the 
actual index for 1/18/2021 is up $0.12 at $65.65. Hog prices are higher on the 
National Direct Morning Hog Report, up $1.67 with a weighted average of $56.64, 
ranging from $50.00 to $58.50 on 7,160 head and a five-day rolling average of 
$54.84. Pork cutouts total 225.02 loads with 196.55 loads of pork cuts and 
28.47 loads of trim. Pork cutout values: up $4.33, $81.75.

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




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