GENERAL COMMENTS:
Cattle contracts had an usual day trading some fat cattle as early as Wednesday afternoon and the lean hog contracts made sure to take advantage of Wednesday's opportunities. Hog prices are higher on the National Direct Afternoon Hog Report, up $0.16 with a weighted average of $51.90. March corn is up 1 1/4 cents per bushel and March soybean meal is down $1.20. The Dow Jones Industrial Average is up 14.21 points and NASDAQ is up 14.87 points.
LIVE CATTLE:
Fact: On Wednesday afternoon a light run of fats sold for $124 in parts of Nebraska, Kansas and Texas. There are always multiple ways to look at the market and Wednesday's trade is most easily understood if we slip on the shoes of all those who are playing the game this week.
For the feeder hoping the market goes higher, it's never good to call your fellow cattlemen and chew them up and down six ways to Sunday for selling the rest of you out. For those who are hedged, it makes sense that they are going to want to see the market bump up before they sell their fats.
For the feeder who sold, the fats you are selling right now were most likely placed back in August around $135. Selling this week for steady money with the opportunity to buy into some lighter weight calves most certainly has its advantages, especially if you buy into cheap heifers. And for those feeders who have been on wait lists for the last couple of weeks, you jump when the opportunity presents itself.
For the Packer: Sometimes you swing and you miss, sometimes you swing and you score -- today was a score.
Another factor that worked in packers' favor this week is the board's lower, mundane trade. February live cattle are down $0.20 at $126.17, April live cattle are down $0.45 at $126.77 and June live cattle are down $0.72 at $118.45. With fat trade starting this week at steady, the board could likely hold steady within its preestablished holding pattern.
Boxed beef prices are mixed: choice up $0.45 ($214.96) and select down $1.45 ($212.02) with a movement of 157 loads (100.10 loads of choice, 20.09 loads of select, 5.91 loads of trim and 30.65 loads of ground beef).
Wednesday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 7,000 head more than a year ago.
THURSDAY'S CASH CATTLE CALL: Steady. It's never easy to push prices higher once they have begun to trade. If fat cattle wouldn't have traded Wednesday afternoon and held out late until Friday, there could have been a chance for higher prices. But seeing that trade has already begun, steady is probably where this week's weighed average will land.
FEEDER CATTLE:
A tough day for feeder cattle contracts, especially nearby contracts that saw over $1.50 in losses. January feeder cattle are down $1.15 at $143.92, March feeder cattle are down $1.62 at $143.05 and April feeder cattle are down $1.52 at $146.02. On Tuesday, at Knoxville Regional Feeder Cattle Auction in Knoxville, Iowa, roughly 2,153 head sold and compared to last week steer calves weighing 300 to 650 pounds sold mostly steady, steers weighing 650 to 750 pounds sold $4.00 to $8.00 higher and 750 to 850 pound steers sold mostly $5.00 lower. Heifer calves weighing 350 to 550 pounds sold steady, heifers weighing 550 to 600 pounds sold $8.00 higher and the heifers weighing 700 to 850 pounds sold $5.00 to $8.00 lower. The CME feeder cattle index 1/21/2020: down $0.29, $145.17.
LEAN HOGS:
Higher cash trade and higher futures market leave the lean hog complex feeling mighty fine. February lean hogs are up $0.20 at $67.55, April lean hogs are up $0.70 at $74.52 and May lean hogs are up $0.50 at $80.85. Pork cutouts total 230 loads with 205.26 loads of pork cuts and 25.23 loads of trim. Pork cutout values: up $0.55, $78.74. Wednesday's slaughter is estimated at 498,000 head, steady with a week ago and 32,000 head more than a year ago. Tuesday's hog slaughter was revised to 493,000 head instead of the presumed 498,000 head. The CME lean hog index 1/20/2020: up $0.04, $60.18.
THURSDAY'S CASH HOG CALL: Steady to slightly higher. It wouldn't be surprising to see the lean hog complex mostly steady with instances of higher prices as the cattle contracts could likely be lower.
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