GENERAL COMMENTS:
Livestock markets closed lower as pressure took
the steam out of the early part of the week's rally. Hog prices closed
slightly lower on the National Direct Afternoon Hog Report, down $0.08
with a weighted average of $49.70. March corn was down 1 1/2 cents per
bushel, and March soybean meal was down $3.70. The Dow Jones Industrial
Average was down 227.57 points, and the NASDAQ was down 174.37 points.
From Friday to Friday, livestock futures scored
the following changes: February live cattle down $1.10, April live
cattle down $2.08, March feeder cattle up $1.68, April feeder cattle up
$0.72, April lean hogs up $2.73 and May lean hogs up $1.03.
LIVE CATTLE:
The cash cattle market's demise this week was
largely due to the futures market's uncertainty. Trade was light to
moderate this week with Northern dressed deals ranging from $188 to
$191, mostly $190, generally steady with the prior week's weighted
average basis Nebraska. Live deals ranged from $117 to $121, mostly $119
to $120, steady to $1 higher. Southern live trade was at $120, $1
higher than the prior week's weighted averages. Seeing that packers are
short bought on cattle, the market should have been able to jump prices
easily $1.00 to $2.00 higher. But with the weaker board position, the
support the cash cattle market needed never developed.
February live cattle closed $0.37 lower at
$119.72, April live cattle closed $0.90 lower at $118.25 and June live
cattle closed $0.65 lower at $110.27.
February's USDA Cattle on Feed report showed cattle and calves on feed up 2%, placements down 1% and marketing up 1%.
Closing boxed beef prices are higher: choice up
$0.59 ($205.09) and select up $0.10 ($201.70) with a movement of 97
loads (50.68 loads of choice, 13.41 loads of select, 18.76 loads of trim
and 14.09 loads of ground beef). Friday's slaughter is estimated at
121,000 head -- 10,000 head more than a week ago and 5,000 head more
than a year ago. Saturday's kill is expected to be around 33,000 head.
MONDAY'S CASH CATTLE CALL: Steady. Until the board picks a direction, the cash market will sit idly.
FEEDER CATTLE:
Feeder cattle prices closed lower -- moderately
lower in nearby contracts, while deferred contracts had losses greater
than $1.00. March feeders closed $0.60 lower at $140.20, April feeders
closed $0.42 lower at $142.10 and May feeders closed $0.72 lower at
$142.85. On Thursday at Winter Livestock in Pratt, Kansas, 2,866 head of
feeders sold. In comparison to last week, feeder steers weighing 800 to
1,000 pounds sold mostly steady to $2.00 higher. Feeder heifers sold
$2.00 to $4.00 higher. Using a limited amount of comparable weights,
weaned steer calves showed lower undertones, and heifer calves sold
$3.00 to $6.00 higher. The CME feeder cattle index for 2/20/2020 was not
available at this time.
LEAN HOGS:
Lean hog contracts closed mostly lower, simply
pressured by the downward pressure on the entire livestock sector. April
lean hogs closed $0.15 higher at $67.02, May lean hogs closed $0.45
lower at $74.02 and June lean hogs closed $0.10 lower at $81.85. Pork
cutouts totaled 318.34 loads with 286.89 loads of pork cuts and 31.45
loads of trim. Pork cutout values: up $0.56, $65.00. Friday's slaughter
is estimated at 467,000 head -- 14,000 head less than a week ago and
7,000 head less than a year ago. The CME lean hog index for 2/19/2020:
up $0.24, $55.78.
MONDAY'S CASH HOG CALL: Steady. Next week's
market is going to depend largely on what the futures market decides to
do. Packers are cutting back on their kills, so if the board is strongly
lower, packers will be leery of bidding hogs higher. But if the board
comes out stronger, packers may pay a little more.
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