GENERAL COMMENTS:
The livestock contracts closed Wednesday with a breath of fresh air as most contracts were able to close higher. The lean hog and feeder cattle contracts closed higher with no problem at all, but the live cattle market is on steeper climb as the markets not only faced pressure from the coronavirus but also weaker cash cattle prices. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.42 with a weighted average of $50.02. March corn is down 2 cents per bushel and May soybean meal is up $5.30. The Dow Jones Industrial Average is down 123.77 points and NASDAQ is up 15.16 points.
LIVE CATTLE:
The live cattle sector was the only market to close lower on Wednesday's last bell and struggled to rally support mainly in nearby contracts. But unlike the other two livestock markets, the live cattle market has to work against two factors, the obvious coronavirus and a weakening cash market. Unlike the futures market, the cash market doesn't bounce back from dramatic swings within the week as easily as the board can. Once cash cattle trade is tested and established for the week, it's really hard to change the tone/price later in the week. There was some light cash cattle trade Wednesday afternoon, but it was mostly clean up in nature. The South in mostly done trading for the week, but more cattle could still trade in the North.
Boxed beef prices closed lower: choice down $1.13 ($206.34) and select down $1.30 ($198.60) with a movement of 164 loads (103.73 loads of choice, 27.38 loads of select, 18.00 loads of trim and 15.11 loads of ground beef). Wednesday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 4,000 head more than a year ago.
THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that the heart of the South is predominately done with the week's trade already, it makes it hard for the cash market to do anything else but trade within the week's pre-established range.
FEEDER CATTLE:
Feeder cattle contracts held most of their momentum through closing and thankfully closed higher than Tuesday's last mark. March feeders are up $1.10 at $134.07, April feeders are up $1.85 at $135.97 and May feeders are up $1.07 at $136.87. Seeing traders are interested in the livestock markets again puts some comfort back into the marketplace, though there are still questions unanswered about the coronavirus. At Winter Livestock in Dodge City, Kansas, compared to a week ago, feeder steers sold $5.00 to $8.00 lower. Feeder heifers sold $6.00 to $9.00 lower. Weaned calves sold $4.00 to $7.00 lower on a limited sample. The CME feeder cattle index 2/25/2020: down $0.11, $139.61.
LEAN HOGS:
The lean hog market closed strong as gains ranged from $0.20 to $0.80. April lean hogs are up $0.47 at $65.15, June lean hogs are up $0.70 at $80.40 and July lean hogs are up $0.80 at $81.60. Seeing that the market was able to trade not only higher throughout the day but close higher on the board, all while capturing higher cash prices, sets a positive demeanor heading into the later part of the week's trade. Pork cutouts total 317.19 loads with 273.81 loads of pork cuts and 43.38 loads of trim. Pork cutout values: down $1.48, $64.49. Wednesday's slaughter is estimated at 495,000 head, 3,000 head more than a week ago and 19,000 head more than a year ago. The CME lean hog index 2/24/2020: up $0.25, $56.16.
THURSDAY'S CASH HOG CALL: Steady. Seeing that the market closed higher on the board and in the cash market leads one to think that, with aggressive kills, the cash market should have no trouble keeping the pace it has been at over the last couple of days. If for some reason the coronavirus panic strikes up again, the cash market will have a hard time trading in the midst of emotional panic.
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