GENERAL COMMENTS:
China's announcement earlier Thursday morning that they would be rolling back a portion of the pork tariffs not only helped bolster the pork market, but also sent an unsaid message that trade will continue despite concern of the coronavirus. In a time where pork production is astronomically high and slaughter is extremely aggressive, the announcement earlier was significant. Hog prices are $0.28 higher on the National Direct Afternoon Hog Report, with a weighed average of $50.29. March corn is down 1 1/2 cents per bushel and March soybean meal is up $0.80. The Dow Jones Industrial Average is up 88.92 points and NASDAQ is up 63.47 points.
LIVE CATTLE:
Feeling a sense of optimism creeping into the marketplace is ideal for cattle feeders as cash cattle trade is at a standstill and trade has yet to truly develop. Live cattle contacts were able to keep their support through closing and closed anywhere from $0.37 to $0.57 higher. February live cattle are up $0.37 at $121.11, April live cattle are up $0.57 at $119.75 and June live cattle are up $0.35 at $111.17. The live cattle market was most conservative in Thursday's rally, but little steady gains can be just as powerful as quick sharp movements.
Boxed beef prices closed mixed: choice up $0.21 ($210.93) and select down $1.98 ($205.96) with a movement of 106 loads (59.38 loads of choice, 16.52 loads of select, 13.71 loads of trim and 15.96 loads of ground beef). Thursday's slaughter is estimated at 121,000 head, 2,000 head less than a week ago and 2,000 head more than a year ago.
FRIDAY'S CASH CATTLE CALL: $1.00 higher. Feeders want higher prices this week and seeing the futures market pick up its tune Thursday was perfect timing for this week's trade to develop. Packers are trying to stretch inventory as a couple major packers have quit killing on Saturdays and others have lightened their shifts. But because packers are making money and the industry is quite current, they are going to need to participate in this week's trade.
FEEDER CATTLE:
Thankfully the support that spurred the market around the noon hour lasted through the closing bell and feeder cattle contracts closed the day higher. March feeders are up $0.22 at $135.90, April feeders are up $0.32 at $137.57 and May feeders are up $0.50 at $140.05. Deferred contracts kept more of the initial market's rally than did the nearby contracts, but after the last two weeks of trade modest steady gains are welcomed. On Wednesday at Huss Livestock Market in Kearney, Nebraska 4,215 head of feeders sold and compared to last week steers over 600 pounds sold $5.00 to $7.00 higher and heifers sold fully $2.00 higher. Demand was strong from start to finish and more farmer feeders were interested in cattle than weeks before. Most of the cattle are packing some sort of tags as pens are wet and cold from the recent storms. The CME feeder cattle index 2/4/2020: up $0.10, $141.53.
LEAN HOGS:
Closing the day with triple-digit gains in almost every existing lean hog contract is a significant boost for the lean hog complex. The biggest pork news comes from the surge in China's announcement that it will roll back a share of the tariffs placed in September, which will help American producers be able to export more pork into China. Not to mention cash prices closed higher and cutout values closed the day in a better position as well. Pork cutouts totaled 332.82 loads with 292.34 loads of pork cuts and 40.49 loads of trim. Pork cutout values: up $0.05, $65.35. Thursday's slaughter is estimated at 493,000 head, 2,000 head more than a week ago and 59,000 head more than a year ago. The CME lean hog index 2/4/2020: down $0.13, $60.97.
FRIDAY'S CASH HOG CALL: $1.00 to $2.00 higher. Seeing that the pork market is surging with the announcement of the rollback of tariffs, the market could easily continue to trade vibrantly throughout the rest of the week.
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