GENERAL COMMENTS:
As the bell closed Wednesday and ended another day, this week is shaping up to be like the last two as markets teeter back and forth but decide that lower trade is where the chips will land. As the midweek mark has come, and not a sign of bullishness roars, it's very likely that this week could end up coming and going like the last two -- lower, lower, lower. Hog prices closed lower on the National Direct Afternoon Hog Report, down $3.07 with a weighted average of $50.07. March corn is down 1 1/2 cents per bushel and March soybean meal is down $1.10. The Dow Jones Industrial Average is up 483.22 points and NASDAQ is up 40.71 points.
LIVE CATTLE:
Interest in the cattle contracts is harder to come by as prices fall to lows established last October. February live cattle are down $0.87 at $120.75, April live cattle are down $1.47 at $119.17 and June live cattle are down $0.92 at $110.82. Right now one would pray for a week of hostility between packers and feeders when at the last hour packers up their bids and feeders pull the market higher. Unfortunately, that kind of postivity most likely won't happen this week. Packers aren't willing to show much interest above steady prices of last week and don't feel the need to shop around when the market's lower. A handful of fats traded in Iowa at $192 to $193, but for the most part trade has yet to be estalihsed this week.
Boxed beef prices closed mixed: choice down $0.21 ($210.72) and select up $0.43 ($207.94) with a movement of 133 loads (72.99 loads of choice, 19.10 loads of select, 14.83 loads of trim and 25.77 loads of ground beef). Wednesday's slaughter is estimated at 122,000 head, 1,000 head less than a week ago and 1,000 head more than a year ago.
THURSDAY'S CASH CATTLE CALL: Lower. With the board eroding to lower and lower levels, cash cattle trade doesn't have as much energy, as the rest of the marketplace is merely depressed.
FEEDER CATTLE:
Feeder cattle contracts continued to fall lower after the noon hour and fell into Monday's trading range, giving up the support Tuesday built. March feeders closed $1.82 lower at $135.67, April feeders closed $1.67 lower at $137.25 and May feeders closed $1.75 lower at $139.55. Moisture accumulation and uncertainty in the live cattle market makes it tough for feeder cattle contracts to establish and then keep any support.
On Tuesday, with an estimated run of 3,634 head feeders at OKC West Livestock Auction in El Reno, Oklahoma, sold compared to last week, feeder steers and heifers sold $3.00 to $5.00 lower. Demand was light and interest in the feeders was even light with heavy snowfall coming in Tuesday night and continuing into Wednesday. Steer and heifer calves were too lightly tested for an accurate test, but a steady undertone was noted. The CME feeder cattle index 2/4/2020: down $0.31, $141.43.
LEAN HOGS:
Although the futures market closed lower, it's impressive that it didn't close even lower when afternoon cash pries fell over $3.00. February lean hogs are up $0.35 at $57.10, April lean hog are down $0.45 at $61.87 and May lean hogs are down $0.60 at $70.30. Contracts fell steadily between $0.15 to $0.60 lower except for the spot February contract. Pork cutouts totaled 306.50 loads with 252.91 loads of pork cuts and 53.58 loads of trim. Pork cutout values are down $2.83 at $65.30. Wednesday's hog slaughter is estimated at 496,000 head, 1,000 head less than a week ago and 24,000 head more than a year ago. The CME lean hog index for 2/3/2020: down $0.31, $61.10.
THURSDAY'S CASH HOG CALL: Slightly lower. Until this market finds a strong bottom, it's going to keep tipping lower, and with cash prices and cutout values teetering lower, it makes it hard for any part of the industry to find support, let alone strength.
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