DTN Midday Livestock Comments          10/18 12:09

   Market Correction

   Livestock markets continue to scale lower and lower and in all three cattle 
charts it's becoming more apparent that the wondered-about correction has 
arrived.

By ShayLe Stewart
DTN Livestock Analyst

General Comments

   Remember the Johnny Cash song, Ring of Fire? Well today's market (though it 
could be much worse) somewhat feels like that, "I went down, down, down, and 
the flames went higher, and it burns, burns, burns, the ring of fire, the ring 
of fire." October live cattle are down $2.62, December live cattle are down 
$1.65, November feeder cattle are down $2.50 and December lean hogs are down 
$1.40. Given the fact that none of the markets are limit down, we clearly know 
and understand that things could be worse and that this correction was 
anticipated. BUT ... it never is a rosy sight to see the markets bleeding lower 
on Friday when there still is a slug of fat cattle to sell and there was early 
morning confirmation of massive pork sales.  December corn is down 3 1/2 cents 
per bushel and December soybean meal is up $2.00. The Dow Jones Industrial 
Average is down 206.62 points and NASDAQ is down 104.40 points

   LIVE CATTLE 

   Live cattle contracts all showing significant losses Friday morning with the 
spot October contract showing the biggest loss, down $2.60 at $109.80 and 
December live cattle are down $1.62 at $112.72. As mentioned earlier, after 
getting used to higher and higher prices, a correction doesn't 'feel good' and 
it's chipping away at current prices stings. However, it is positive to be 
getting this well-known and much-anticipated correction out of the way so that 
the market can establish a stable and steady position hopefully long before the 
upcoming 2020 calendar arrives.

   A light trade is being reported in parts of the South at $108, steady to 
$1.00 lower than the bulk of last week's trade. A few deals set for delayed 
delivery have been reported in Eastern Nebraska at $173 (set for the weeks of 
November 4 and November 11). Asking prices are around $112 in the South, and 
$178 to $180 in the North.

   Midday boxed beef cutouts are mixed: choice down $0.23 ($217.88) and select 
up $1.51 ($194.11). Friday's offering of boxed beef comes to 47 loads (22.82 
lads of choice cuts, 14.17 loads of select cuts, no loads of trim and 10.38 
loads of ground beef). 

   FEEDER CATTLE 

   Feeder cattle markets have taken Friday's slug the hardest. Feeder markets 
range anywhere from $1.45 to $2.42 lower. Sale barn markets as of Thursday have 
been able to rally higher prices and attract buyers to come bids on long runs 
of calves. Friday's weakening board could begin to affect those prices though. 
November feeder cattle prices are down $2.27 at $142.05. 

   LEAN HOGS 

   Unable to be inspired by the notice of higher net sales early Friday 
morning, which made a new marketing-year high, lean hog prices still trail 
downward. Increased purchases came from Mexico 132,400 metric tons, China 
94,000mt, Japan 46,400mt, South Korea 9,900mt, and Canada 5,800mt. The lean hog 
sector is down, but not nearly as much as the live cattle board and feeder 
cattle board. December lean hogs are down $1.37 at $66.77 and all other 
contracts range $0.05 to $1.02 lower except for February 2021, which is up 
$0.05. 

   The projected lean hog index for 10/16/19 is up $0.96 at $64.90, and the 
actual for 10/15/19 came to $63.94 up $1.02. Prices are down on the National 
Direct Morning Hog Report, down $0.75 with a weighted average of $57.05, 
ranging from $55.00 to $60.00 on 4,400 head sold and a five-day rolling average 
of $57.79. Pork cutouts totaled 129.73 loads with 117.02 loads of pork cuts and 
12.72 loads of trim. Pork cutouts values are up $0.16 at $76.44. 

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


(BAS)

Copyright 2019 DTN/The Progressive Farmer. All rights reserved.