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DTN Midday Livestock Comments          10/28 13:00

   Feeder Cattle Contracts Paying Close Attention to Corn Prices

   Cattle contracts are keeping with their upward trend, hoping to regain 
ground lost from last week's regression and keep rallying into the latter part 
of the week to encourage cash cattle prices.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   The cattle contracts are soaking up this week's support, rallying modestly 
in the live cattle market and upwards of $1.00 higher in the feeder cattle 
market. Meanwhile in the lean hog market the contracts keep stair-stepping 
lower as pressure around resistance levels encourages the market to trade 
lower. December corn is down 11 1/4 cents per bushel and December soybean meal 
is down $6.00. The Dow Jones Industrial Average is down 678.49 points and 
NASDAQ is down 316.80 points.


   The live cattle market is liking the support that is largely stemming from 
the rally in the feeder cattle market and obvious support from traders who are 
willing to step back into the market. December live cattle are up $0.62 at 
$104.67, February live cattle are up $0.47 at $107.47 and April live cattle are 
up $0.57 at $111.22. Wednesday's usual cash cattle business didn't go as 
planned as the Fed Cattle Exchange experienced some technical difficulties and 
was unable to host their weekly sale. Around midmorning some cash cattle bids 
did start to lightly develop. There are some cattle bid on in Texas at $104 but 
asking prices are starkly higher at $108 in the South, and the North has yet to 
set their prices. Trade is more likely to see develop Thursday and Friday 
though there could be some mild developments throughout Wednesday afternoon. 

   Boxed beef prices are mixed: choice down $0.75 ($205.95) and select up $1.16 
($189.83) with a movement of 110 loads (65.52 loads of choice, 15.51 loads of 
select, 8.42 loads of trim and 20.71 loads of ground beef).


   Feeder cattle contracts are bound and determined to make a comeback as the 
market has successfully rallied three days in a row. Wednesday's biggest 
support is coming from the corn market hard sell off as December corn falls 
$0.11 lower per bushel, and March corn is down $0.10 per bushel. November 
feeders are up $1.37 at $133.67, January feeders are up $1.30 at $129.75 and 
March feeders are up $1.17 at $129.22. If the market can keep this forward 
momentum, and see some progress made in the live cattle market - buyers could 
be somewhat more willing to look at feeder cattle and calves selling this fall.


   As the lean hog market scales lower, seemingly unwilling to surpass the 
market's current resistance planes, traders look at the cattle contracts with 
more interest and leave the hogs to fall lower. December lean hogs are down 
$1.37 at $66.27, February lean hogs are down $1.92 at $66.12 and April lean 
hogs are down $1.77 at $68.60. Pork cutouts aren't as hot Wednesday as they 
were earlier in the week, and with the cash markets lower midday prices, the 
market sits fully lower heading into Wednesday afternoon. As time passes and we 
begin to look to Thursday, the week's export report has a way of gravely 
affecting the pork market. Hog producers obviously hope for a strong report to 
keep packers vigorously processing and to help move front-end supplies. 

   The projected lean hog index for 10/26/2020 is down $0.70 at $77.47 and the 
actual index for 10/23/2020 is down $0.37 at $78.17. Hog prices are lower on 
the National Direct Morning Hog Report, down $1.12 with a weighted average of 
$61.44, ranging from $58.00 to $63.50 on 5,110 head and a five-day rolling 
average of $60.62. Pork cutouts total 226.60 loads with 203.84 loads of pork 
cuts and 22.76 loads of trim. Pork cutouts values: down $0.01, $88.82.

   ShayLe Stewart can be reached [email protected]


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