GENERAL COMMENTS:
Tuesday came as a bit of a mix for the livestock contracts. Initially the day started out strong in every division, but as time went on the lean hog market grew strong, being supported from the cash market, and cattle contracts grew weaker. Hog prices are higher on the National Direct Afternoon Hog Report, up $0.82 with a weighted average of $54.71. March corn is up 6 cents per bushel and March soybean meal is down $0.20. The Dow Jones Industrial Average is up 186.64 points and NASDAQ is up 130.37 points.
LIVE CATTLE:
Live cattle contracts are feeling pressure from nearly every angle this week. The board is struggling to find stable ground, cash cattle prices are expected to be lower and the USDA Inventory report is shared Friday, which many expect to be bullish but the weight of not knowing carries its own heavy load. February live cattle closed $0.10 lower at $122.15, April live cattle closed $0.60 lower at $120.70 and June live cattle closed $0.55 lower at $112.47.
Boxed beef cutouts closed mixed: choice down $0.74 ($212.85) and select up $1.66 ($212.16) with a movement of 153 loads (83.73 loads of choice, 30.10 loads of select, 10.44 loads of trim and 28.33 loads of ground beef). Tuesday's slaughter is estimated at 117,000 head, 6,000 head less than a week ago and steady with a year ago.
WEDNESDAY'S CASH CATTLE CALL: Slightly lower. Cash cattle trade has yet to surface, but an overall feel for how trade may develop could come as early as Wednesday morning from the Fed Cattle Exchange, though it's expected that trade will wait to really get underway until later in the week.
FEEDER CATTLE:
Nearby feeder cattle contracts were able to hold onto the day's rally while deferred contracts dipped into red prices. January feeders are up $0.15 at $142.05, March feeders are up $0.22 at $135.40 and April feeders are down $0.22 at $137.77.
On Monday, with an estimated run of 6,027 at the Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to last week feeder steers under 550 pounds sold steady with instances of $5.00 higher, steers over 600 pounds sold for $2.00 to $4.00 lower. The demand was best met with light fleshed steers under 550 pounds and there was a moderate demand for the heavier weight steers and heifers. The CME feeder cattle index 1/27/2020: down $0.56, $143.76.
LEAN HOGS:
It was a significant day for the lean hog complex as cash prices were just shy of trading $1.00 stronger, pork cutouts were huge and the board successful closed higher when the feeder cattle contracts weakened mid-afternoon. On another positive note, progress is being made with the African swine fever vaccine as USDA's researchers from the Plum Island Animal Disease center shared that they've been testing a vaccine that is proving to be wildly effective in treating the disease. February lean hogs closed $0.27 higher at $66.22, April lean hogs closed $0.85 higher at $71.30 and May lean hogs closed $0.67 higher at $77.65 Pork cutouts totaled an enormous 425.39 loads with 384.42 loads of pork cuts and 40.98 loads of trim. Pork cutout values are down $1.38, $75.88. Tuesday's lean hog slaughter is estimated at 498,000 head, 5,000 head more than last week and 32,000 head more than a year ago. The CME lean hog index 1/24/2020: up $0.11, $61.64.
WEDNESDAY'S CASH HOG CALL: Steady to slightly higher. Seeing that the cattle market is going to be pressured from nearly all angles, the lean hog complex is going to have the opportunity once again this week to make advancements while the rest of the livestock contracts try to stabilize.
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