DTN Midday Livestock Comments 02/24 12:14
New Headlines and the Market Panics
Livestock contracts drop lower Monday morning.
By ShayLe Stewart
DTN Livestock Analyst
As market analysts, it's our job to provide our readers the most current and
up-to-date information available. Knowing that markets are largely influenced
by external factors, watching the cattle market isn't as simple as staying up
to date with live cattle and feeder cattle trade. But just as fast as new
headlines storm through the marketplace, their relevance can diminish just as
fast as it came. It's important to know what happening in the market; Monday
morning for example, has been largely influenced by the coronavirus spreading
into South Korea and Japan, and Brazil again exporting fresh beef into the
United States. Sometimes there is a misunderstanding with headlines. Not every
bit of data shared is meant to affect the market. It's important to understand
what's happening to economies that the U.S. depends on for healthy trade, and
understand what's changed from day to day, but the market shouldn't break in
two every time there is an announcement of something new. It's important that
we all educate ourselves on the matters at hand, and make sound, unemotional
decisions when it comes to trade and finances.
March corn is down 6 cents per bushel and May soybean meal is down $2.30.
The Dow Jones Industrial Average is down 947.90 points and NASDAQ is down
Live cattle contracts haven't neglected to jump on board and trade lower at
the start of the new week. February live cattle are down $2.50 at $117.22,
April live cattle are down $3.00 at $115.25 and June live cattle are down $2.95
at $107.32. The weakness that has penetrated the livestock sector comes from
the announcement that the coronavirus has spread into both Japan and South
Korea -- two large export countries for US beef -- and that Brazil will be
exporting fresh beef once again into the U.S. Cash cattle business is quiet as
usual on Monday as asking prices have yet to be established and packers are
working the country quiet yet.
Boxed beef prices are mixed: choice up $1.60 ($206.69) and select down $0.50
($201.20) with a slim movement of 47 loads (25.59 loads of choice, 5.15 loads
of select, 6.17 loads of trim and 9.59 loads of ground beef).
Near-limit losses seems to be only option in the feeder cattle market as the
day washes out and support seems to be long gone. March feeders are down $4.25
at $135.95, April feeders are down $4.50 at $137.60 and May feeders are down
$4.50 at $138.35. The weakness that is affecting the feeder cattle market is no
different from the other contracts - the announcement of the coronavirus
spreading into Japan and South Korea has the entire livestock sector nervous.
Knowing that the day is going to be largely spent trading lower, in the
midst of the downward pressure, the lean hog complex is taking the slimmest
hit. April lean hogs are down $2.17 at $64.85, June lean hogs are down $1.90 at
$79.95 and July lean hogs are down $1.50 at $81.22. It's once again positive
for the future's market to have positive cash hog trade which aids as something
substantial and reliable for the market to fall back on in morning of
emotionally stimulated trading.
The projected lean hog index for 2/21/2020 is up $0.04 at $55.91, and the
actual index for 2/20/2020 is up $0.09 at $55.87. Hog prices on the National
Direct Morning Hog Report at $0.80 higher with a weighted average of $50.55,
ranging from $45.00 to $52.50 on 3,366 head sold and five-day rolling average
of $49.96. Pork cutouts total 136.45 loads with 125.57 loads of pork cuts and
10.88 loads of trim. Pork cutout values: up $1.13, $66.13.
ShayLe Stewart can be reached firstname.lastname@example.org
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