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DTN Midday Livestock Comments          09/29 12:26

   Cattle Contracts Rallying Through Tuesday

   Cattle contracts are jumping at the opportunity to scale higher, rallying as 
much as $3.00 in the feeder cattle arena.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   The cattle contracts are thriving Tuesday afternoon as support has rallied 
the two markets substantially -- especially the feeder cattle market. Meanwhile 
the lean hog sector is scaling lower as a unanimous consensus that the complex 
should trade higher doesn't seem likely for the time being. December corn is 
down 4 cents per bushel and December soybean meal is down $2.00. The Dow Jones 
Industrial Average is down 196.69 points and NASDAQ is down 26.95 points.


   Live cattle contracts are rallying Tuesday afternoon while the opportunity 
presents itself. October live cattle are up $1.22 at $109.17, December live 
cattle are up $1.80 at $113.45 and February live cattle are up $1.50 at 
$116.52. The cash cattle market continues to be quiet, as feeders are becoming 
keen on the notion of selling their cattle later in the week, and for higher 
prices. The South has priced cattle at $108-plus, but the North has yet to 
offer any initial asking prices for the week. If boxed beef prices can scale 
upward (even if its modestly) stronger beef demand could help feeders achieve 
another week of higher cash prices.

   Boxed beef prices are higher: choice up $0.06 ($217.78) and select up $1.70 
($208.12) with a movement of 72 loads (36.95 loads of choice, 17.27 loads of 
select, 5.92 loads of trim and 12.34 loads of ground beef).


   As corn prices weaken $0.02 to $0.04 per bushel,  feeder cattle contracts 
rally $2.00 to $3.00 higher taking full advantage of Tuesday's support. October 
feeders are up $2.32 at $143.25, November feeders are up $3.07 at $144.17 and 
January feeders are up $2.90 at $142.05. Seeing the cash cattle market rally 
higher for the last two weeks has really helped build somewhat of a positive 
mindset around the highly anticipated fall run of feeder cattle. There are 
numerous bearish reasons as to why the market's fall run could fall short of 
expectations (drought conditions, supply outweighing demand, and uncertainty 
still playing a large role in the marketplace). But if the cash cattle market 
can continue to gain leverage over the next two to four weeks, its positive 
momentum could carry over into the feeder cattle market.


   The cattle complex's rally is drawing attention away from the lean hog 
market as traders questions the longevity of these prices. Heading into the 
afternoon the lean hog contracts are $0.55 to $1.37 lower. Over the last three 
weeks the lean hog market's rally has been tremendous, but without seeing 
tremendous follow-through from the export side of things, the market wonders if 
these prices are sustainable. There will be a lot of pressure on this week's 
export report, which comes out on Thursday mornings. October lean hogs are down 
$0.05 at $72.65, December lean hogs are down $1.47 at $62.55 and February lean 
hogs are down $1.25 at $67.45.

   The projected lean hog index for 9/28/2020 is up $0.49 at $75.91, and the 
actual index for 9/25/2020 is up $0.89 at $75.42. Hog prices are lower on the 
National Direct Morning Hog Report, down $0.49 with a weighted average of 
$63.61, ranging from $60.00 to $65.00 on 5,499 head and a five-day rolling 
average of $64.33. Pork cutouts total 240.10 loads with 218.83 loads of pork 
cuts and 21.27 loads of trim. Pork cutout values: down $0.05, $93.34.

   ShayLe Stewart can be reached

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