GENERAL COMMENTS:
Protein (real protein) is in high demand as both beef and pork markets see steadily higher retail values. This comes as a two-fold win as producers are reassured that their products are being sought after and helping pad packer's pockets, which could sequentially trickle into the cash markets. Wednesday is the big day for the phase one trade agreement, and we all look forward to seeing the agreements fine details and understanding the market's opportunities with export markets. Hog prices are almost a dollar higher, up $0.97 with a weighted average of $51.56. March corn is down 1/2 cent per bushel and March soybean meal is down $1.80. The Dow Jones Industrial Average is up 31.81 points and NASDAQ is down 22.60 points.
LIVE CATTLE:
Live cattle markets had a productive day closing the modestly higher. February live cattle are up $0.30 at $126.85, April live cattle are up $0.35 at $127.87 and June live cattle are up $0.22 at $119.72. Feeders feel optimistic about this week as early asking prices in Nebraska are starting out at $126 to $127 live and $205 plus for dressed cattle, and all other regions have yet to place their asking prices. It's a good sign that boxed beef values to be slowing working their way higher as feeders are hoping for higher cash prices.
Boxed beef prices close higher: choice up $2.21 ($212.76) and select up $2.07 ($210.30) with a movement of 120 loads (69.41 loads of choice, 14.04 loads of select, 8.93 loads of trim and 27.76 loads of ground beef). Tuesday's slaughter is estimated at 123,000 head, steady with a week ago and 2,000 head more than a year ago.
WEDNESDAY'S CASH CATTLE CALL: Quiet. Given that Wednesday is the signing of the phase one trade agreement, the cattle market may take the back burner as a lot of concern will be shed for the pork industry. At the earliest, the Fed Cattle Exchange may kick off some trade but with feeders eager for higher prices, it wouldn't be surprising to see a late week trade again.
FEEDER CATTLE:
Feeder cattle contracts close just barely lower, with contracts ranging from steady to $0.15 lower. January feeders are down $0.12 at $145.90, March feeders are down $0.12 at $145.72 and April feeders are down $0.15 at $148.65. On Monday at Russell Livestock Feeder Cattle Auction in Russell, Iowa, 2,760 feeders sold and compared to the last sale 400 to 500 pounds steers were $1.00 to $2.00 higher, while 750 to 800 pound steers were fully $2.00 higher. The 400 to 600 pound heifers sold $2.00 to $8.00 higher, while the 600 to 800 pound heifers were steady to $5.00 lower. As most of the yearlings have already worked their way through the selling process, buyers have their eyes on the lighter weight calves that will roll into grass-calves nicely this summer. The CME feeder cattle index 1/13/2020: up $0.05, $145.51.
LEAN HOGS:
A phenomenal day for the lean hog market and interestingly enough the day before the signing of the phase one trade agreement. The cash market jumped $0.97 and vigorous processing speeds bumped pork cuts to eye catching mark Tuesday. It will be interesting to see how Wednesday affects the markets and what opportunities lay ahead. February lean hogs close $1.77 higher at $67.67, April lean hogs close $1.62 higher at $75.00 and May lean hogs close $1.37 higher at $81.10. The CME lean hog index 1/10/2020: down $0.37, $58.99.
Pork cutouts total an enormous 398.70 loads with 368.51 loads of pork cuts and 30.19 loads of trim. Pork cutouts: up $0.05, $74.29. Tuesday's slaughter is estimated at 497,000 head, steady with a week ago and 18,000 head more than a year ago.
WEDNESDAY'S CASH HOG CALL: Steady. Given that Tuesday pushed the board and cash and pork cutouts are all higher -- unless there is something that is unforeseen with the phase one trade agreement, the market may need a day to absorb Tuesday's lavish gains.
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