GENERAL COMMENTS:
Tuesday ended up being a mixed day for the livestock sector as cattle contracts veered lower, but the lean hog market successfully closed higher. Wednesday is going to be an important day for this week's cash cattle market, and by the looks of it a higher market is in play. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.24 with a weighted average of $50.06 on 10,050 head. March corn is up 9 1/2 cents per bushel and March soybean meal is up $11.60. The Dow Jones Industrial Average is down 68.30 points and NASDAQ is down 49.20 points.
LIVE CATTLE:
The live cattle contracts ran out of steam as the corn market rallied significantly higher. February live cattle closed $1.20 lower at $114.57, April live cattle closed $0.75 lower at $118.77 and June live cattle closed $0.52 lower at $114.27. Thankfully the board's minor setback hasn't rocked feedlots' confidence this week as they are still gunning for higher prices in the cash cattle market. Tuesday was a relatively quiet day on the cash cattle front as the snow blowing across Nebraska and Iowa by no means pushed buyers into feeling pressured to sell. There was some light trade in the North at $110, and some bids surfaced for dressed cattle in Iowa at $173, neither of which drew enough attention to call a trend for the week. Meanwhile the South continues to sit tight with asking prices of $112 plus. Trade is expected to develop sometime Wednesday mid-morning.
Tuesday's slaughter is estimated at 116,000 head, 3,000 head less than a week ago and 15,000 head more than a year ago.
Boxed beef prices closed mixed: choice up $2.48 ($210.30) and select down $1.17 ($195.48) with a movement of 144 loads (92.44 loads of choice, 18.12 loads of select, 11.06 loads of trim and 22.23 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. Feedlots are bound and determined to get this week's cash cattle market higher and don't plan to weaken. Seeing an advancement this week of $2.00 to $3.00 strong isn't by any means out of the question.
FEEDER CATTLE:
Tuesday ended up being a lost cause for the feeder cattle contracts as feedlots watched the corn market jump $0.09 higher in nearby contracts and close comfortably above $4.60 per bushel in the March 2021, May 2021 and July 2021 contracts. Input costs are one of the fastest ways to suck profitably out of an operation and with Tuesday's higher corn close feedlots are on edge. January feeders closed $1.37 lower at $139.62, March feeders closed $1.37 lower at $141.22 and April feeders closed $1.15 lower at $142.97. The CME feeder cattle index Dec. 28: up $0.11, $138.40.
LEAN HOGS:
The lean hog market had a successful day as the market saw full support across the marketplace with the futures market closing fully higher, cash prices closed higher and even pork cutout values managed to close higher before Tuesday's end. February lean hogs closed $0.70 stronger at $67.20, April lean hogs closed $0.32 higher at $71.07 and June lean hogs closed $0.12 higher at $82.00. The interest in the cash market has been strong this week as packers have bought upwards of 10,000 head both days. Heading into 2021, the hog market hopes to keep this upward momentum and shake the 2020 blues. Pork cutouts totaled 355.17 loads with 314.14 loads of pork cuts and 41.03 loads of trim. Pork cutout values: up $0.51, $72.36. Tuesday's slaughter is estimated at 465,000 head, 8,000 head less than a week ago and 57,000 head more than a year ago. The CME lean hog index for Dec. 23: down $1.02, $60.60.
WEDNESDAY'S CASH HOG CALL: Steady. Seeing that packers have been buying more hogs in the cash market, Wednesday could be another day of a stronger close as packers want to get hogs bought before being back to normal schedule in 2021.
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