GENERAL COMMENTS:
The cattle contracts were able to push through the day and capture moderate wins having the board close in the green as appose to lower prices again. Hog prices are lower on the National Direct Afternoon Hog Report, down $1.05 with a weighted average of $54.26. March corn is down 4 3/4 cents per bushel and March soybean meal is down $4.60. The Dow Jones Industrial Average is up 124.99 points and NASDAQ is up 23.77 points.
LIVE CATTLE:
The live cattle market has a lot of credit to give to the feeder cattle market for breaking the initial path to higher prices. Though the day only closes with moderate gains a day of higher prices is a win this week. February live cattle closed $0.02 higher at $121.77, April live cattle closed $0.02 lower at $120.20 and June live cattle closed $0.02 higher at $112.02.
A private source shared that two majors and one regional are all bought and booked into the week of Feb. 17. But interestingly enough, phones have been busy all afternoon as packers look around to see what's available, but are only wanting to pay this week's going rate. We all have a tendency of letting the little amount of vitamin D available this time of year get to us, but the fact that packers are calling and itching to get cattle bought before Friday's inventory report, and before the market, could see a moderate spark in prices is telling.
The major take away going into Friday is: 1) the market is extremely current and packers are trying to stretch inventory by minimizing Saturday kills, 2) Friday's Inventory Report may be more powerful than initially perceived given that packers have been aggressive Thursday afternoon.
Another test of light trade developed in parts of the South Thursday afternoon with live deals coming in at $122, steady with the week's earlier trade, $2.00 lower than last week's weighed average. Private sources shared that some cattle sold in Colorado at $122 to $122.50. And very little trade was reported in the North at $194 to $195.
Boxed beef prices are lower: choice down $0.17 ($213.35) and select down $0.45 ($211.48) with a movement of 131 loads (76.15 loads of choice, 14.12 loads of select, 11.67 loads of trim and 29.53 loads of ground beef). Thursday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 8,000 head more than a year ago.
FRIDAY'S CASH CATTLE CALL: Slightly better. Seeing that packers are aggressively looking for cattle before Friday's Cattle Inventory report leads one to believe that they perceive the report to be bullish for feeders.
FEEDER CATTLE:
Being brave has its benefits and the feeder cattle market took Thursday with stride. March feeders closed $0.67 higher at $135.65, April feeders closed $0.05 higher at $137.12 and May feeders closed $0.07 higher at $139.27. When you look at March's chart it's seeming as if some what of a bottom is being established in the midst of the coronavirus scare, which is seeming to have weighed more heavily on the market than it should have.
On an estimated run of 5,550 head on Wednesday at Bassett Livestock Auction in Bassett, Nebraska compared to the previous week 500 to 650-pound steers traded unevenly steady, 700 pound steers trade $4.00 lower. Heifers weighing 400 pounds sold $6.00 lower, and heifers weighing 550 to 650 pounds sold evenly steady. The CME feeder cattle index 1/29/2020: down $0.71, $142.88.
LEAN HOGS:
Closing the day at $3.00 losses in the nearby contracts, and $2.37 lower to $2.97 lower in deferred contracts, the lean hog contracts have fallen apart late in the week. February lean hos are down $3.00 at $61.30, April lean hogs are down $3.00 at $65.82 and May lean hogs are down $3.00 at $72.32. Overbearing concern about the coronavirus? Worry about too much supply? The market implications that the new African swine flu vaccine could have? Or making way for cattle contracts to have somewhat of a successful Friday? There are plenty of reasons why the lean hog sector is diving lower.
Pork cutouts total 361.16 loads with 329.62 loads of pork cuts and 31.54 loads of trim. Pork cutout values: down $0.49, $70.90. Thursday's slaughter is estimated at 491,000 head, 6,000 head less than a week ago and 76,000 head more than a year ago. The CME lean hog index 1/28/2020: up $0.66, $62.40.
FRIDAY'S CASH HOG CALL: Lower. Seeing that the board is crumbling and slaughter has been aggressive throughout the week, packers may take the later part of the week easier.
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