Friday Closing Livestock Market Summary - The Stars Are Aligned for Cash Cattle to Trade Higher

GENERAL COMMENTS:

Cattle markets are in a strong position as the week closes with contracts fully higher and cash cattle still yet to trade. You have to love the power behind trading negotiated cattle and the price discovery that can be sought! Hog prices are lower on the National Direct Afternoon Hog Report, down $0.43 with a weighted average of $50.43. March corn is up 2 1/2 cents per bushel and March soybean meal is up $2.70. The Dow Jones Industrial Average is down 133.13 points and NASDAQ is down 24.57 points.

From Friday to Friday livestock futures scored the following changes: February live cattle up $2.70, April live cattle up $2.28; January feeder cattle up $4.25, March feeder cattle up $4.78; February lean hogs down $1.30, April lean hogs down $1.03.

LIVE CATTLE:

A good-old fashioned standoff in cash cattle trade makes one anxious to hear what prices will come to. Packers are playing tough, keeping their bids well below asking prices and seeming not willing to budge. Feeders, on the other hand, aren't willing to subside to lower prices and are in a good position to push the buck this week. Readily available fed cattle supplies are current, so they don't have to worry about supply backing up and ultimately affecting price discovery. At this time some light trade has developed in parts of the North at $200, $1 higher than last week's weighted average in Nebraska, and the South remains in a tough standoff. If trade breaks out Friday evening it will be late and more likely will be sometime Saturday.

Live cattle contracts closed fully higher with a strong close near the end of the day. February live cattle closed $0.70 higher at $127.42, April live cattle closed $0.65 higher at $127.95 and June live cattle closed $0.30 higher at $119.77. All of which puts another leverage coin in feeders' pockets.

Boxed beef prices closed mixed: choice up $0.08 ($210.04) and select down $0.13 ($206.55) with a movement of 146 loads (90.21 loads of choice, 22.22 loads of select, 13.02 loads of trim and 20.69 loads of ground beef). Friday's slaughter is estimated at 120,000 head, 2,000 head more than a year ago. Saturday's slaughter is projected to be 32,000 head.

MONDAY'S CASH CATTLE CALL: Steady. Seeing that cash cattle trade has yet to really develop, it's safest to call next week steady. If feeders push packers into paying more, you can bet that packers are going to be resistant to paying higher prices again next week. The battle between the two will come to the factors of supply and inventory, demand (boxed beef) and the ability to hold the best wild card.

FEEDER CATTLE:

Closing the week steady and stronger, feeder cattle contracts close the week fully higher and are ready for next week's opportunities. January feeders closed $0.67 higher at $147.60, March feeders closed $0.90 higher at $147.45 and April feeders closed $0.87 higher at $150.05. On Thursday at the Billings Livestock Commission in Billings Montana, steers weighing 450 to 749 pounds sold mostly $10.00 to $14.00 higher in a narrow comparison. Heifers weighing 400 to 649 pounds sold mostly $6.00 to $12.00 higher. Quality this week was mostly very attractive. Many loads of high-quality weaned cattle were on offered and many of these offerings were weaned for 60 days or longer. The CME feeder cattle index 1/9/2020: up $0.39, $146.83.

LEAN HOGS:

Next week is the big week with the long-awaited signing of the phase one trade agreement. Hog producers have waited a long time to have some market clarity in what direction the export markets hold. Having a definite answer to such questions will give producers the ability to make the managing decisions they need. Lean hog contracts closed the day mixed, steadily mixed in nearby contracts and slightly higher in deferred. February lean hogs closed $0.22 higher at $67.25, April lean hogs closed $0.35 higher at $74.12 and May lean hogs closed $0.25 higher at $80.72. Pork cutouts totaled 283.70 loads with 241.76 loads of pork cuts and 41.93 loads of trim. Friday's slaughter is estimated at 495,000 head, 21,000 head more than a year ago. Saturday's slaughter is projected to be 231,000 head. The CME lean hog index 1/8/2020: up $0.22, $59.56.

MONDAY'S CASH HOG CALL: Steady. It wouldn't be surprising to see trade idle and lethargic next week in anxiousness over the trade agreement. Cash hog trade will most likely trade well within this week's arena.

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