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DTN Midday Livestock Comments          01/19 12:14

   Feeder Cattle Contracts Relieved to See Lower Corn Prices

   The livestock contracts trade mixed heading into the new week, but 
thankfully the feeder cattle market is finally catching a break after being 
immensely pressured the last two weeks.

ShayLe Stewart
DTN Livestock Analyst

   General Comments

   The support that upheld both the live cattle and feeder cattle contracts is 
weakening in the live cattle contracts as some deferred contracts are battling 
modest resistance. Meanwhile if corn prices are going to continue to trade 
lower, the feeder cattle contracts see this as an opportunistic time to trade 
fully higher -- no questions asked. March corn is down 8 cents per bushel and 
March soybean meal is down $11.80. The Dow Jones Industrial Average is up 
120.71 points and NASDAQ is up 135.67 points.

   LIVE CATTLE

   Tuesday has shown mixed support for the live cattle contracts as early in 
the day the contracts traded fully higher but as the noon hour approaches 
deferred contracts are met with some hesitation. February live cattle are up 
$0.67 at $113.45, April live cattle are up $1.20 at $119.37 and June live 
cattle are up $0.52 at $116.80. Last week's cash cattle trade was bigger than 
anticipated and it's a little concerning that packers were able to commit 
upwards of 35,677 head for 15 to 30 days out. The Northern Plains were able to 
sell a plethora of cattle which will help them in the weeks to come as they 
were able to clean up some of their showlists. The cash cattle front will 
continue to be a struggle even with stronger boxed beef prices until the 
calendar nears the second quarter -- but that's not to say that with strategic 
marketing that higher prices can't be achieved.

   New showlists appear to be mixed, higher in Texas, but lower in Kansas, 
Nebraska/Colorado.

   Last week's negotiated cash cattle trade ended up being greater than 
anticipated. Last week 95,868 head sold and of that 60,191 head are committed 
for delivery in the next two weeks while the remaining 35,677 head are for 
delivery in the following 15 to 30 days.

   Boxed beef prices are higher: choice up $2.60 ($217.64) and select up $0.12 
($205.96) with a movement of 81 loads (51.81 loads of choice, 11.97 loads of 
select, 6.21 loads of trim and 10.71 loads of ground beef).

   FEEDER CATTLE

   The feeder cattle contracts are relieved to be seeing lower corn prices and 
are jumping at the day's opportunity to trade higher. January feeders are up 
$0.30 at $134.87, March feeders are up $1.85 at $137.67 and April feeders are 
up $2.07 at $140.37. The last two weeks have been hit and miss for the feeders 
sold throughout the countryside. Some sales were able to avoid the board's 
lower pressure and continue to sell cattle with excellent demand from buyers, 
but other sales were leery of the board's sharp losses and neglected to have 
adequate buyers. Heading into this week's trade, if the board can continue to 
push for higher prices and regain some of the positioning that the industry 
lost since the first of 2021, feeders may stand a chance to sell for more money.

   LEAN HOGS

   The cattle contracts may be enjoying modest support, but the lean hog 
contracts are trading modestly lower unable to capture the attention of traders 
Tuesday morning. February lean hogs are down $0.97 at $66.95, April lean hogs 
are down $0.62 at $72.02 and June lean hogs are down $0.70 at $83.67. Last 
week's mixed trade throughout the pork cutout values helped cast some 
supportive energy toward the entire complex, if the market can keep consumer 
demand and continue to see somewhat steady to higher pork cutout prices the 
board could stand to see some support.

   The projected lean hog index for 1/18/2021 is up $0.12 at $65.65 and the 
actual lean hog index for 1/14/2021 is down $0.34 at $65.53. Hog prices are 
lower on the National Direct Morning Hog Report, down $0.56 with a weighted 
average of $54.97, ranging from $46.00 to $55.86 on 4,880 head and a five-day 
rolling average of $54.19. Pork cutouts total 225.22 loads with 202.62 loads of 
pork cuts and 22.60 loads of trim. Pork cutout values: up $0.07, $78.59.

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




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