GENERAL COMMENTS:
After a tough week, the livestock contracts were granted renewed support and largely were able to close higher before the long weekend. Hog prices closed lower on the National Direct Afternoon Hog Report, down $1.26 with a weighted average of $52.72 on 4,923 head. March corn is down 2 3/4 cents per bushel and March soybean meal is down $1.70. The Dow Jones Industrial Average is down 177.26 points and NASDAQ is down 114.14 points.
From Friday to Friday livestock futures scored the following changes: February live cattle down $1.70, April live cattle down $1.10; January feeder cattle down $1.25, March feeder cattle down $1.00; February lean hogs down $0.78, April lean hogs down $0.17.
**DTN will not be sharing market commentary Monday, Jan. 18, as the futures complex is closed for Martin Luther King Jr. Day.
LIVE CATTLE:
Friday came as a breath of fresh air, allowing both the feeder cattle and live cattle contracts to close fully higher after a week of immense pressure. February live cattle closed $0.70 higher at $112.77, April live cattle closed $0.97 higher at $118.20 and June live cattle closed $1.32 higher at $116.27. With an uptick in boxed beef prices and a shortened week, seeing that Monday is Martin Luther King Day and markets will be closed, the cash cattle market may be able to make packers pay steady, if not a little higher next week. Looking toward next week's trade, it's also encouraging to remember that Friday unveils another Cattle on Feed report, which is anticipated to report bullish placements once again. Friday's cash cattle trade was as exciting as watching grass grow in the dead of winter as the market had finished its trade earlier in the week. This past week Northern cattle sold dressed for $173 to $174 and Southern live cattle sold from $110 to $111. Friday's slaughter is estimated at 115,000 head, 2,000 head less than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 67,000 head.
With the higher closes late in the week, boxed beef prices saw an uptick from last week's weighted average. Choice cuts averaged $210.82 (up $4.09) and select cuts averaged $199.41 (up $2.93) from last week. The week's movement of cuts, grinds and trim was sizeable again totaling 714 loads.
Boxed beef prices closed mixed: choice down $0.45 ($212.92) and select up $2.01 ($203.08) with a movement of 140 loads (87.71 loads of choice, 15.73 loads of select, 15.68 loads of trim and 20.64 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Packers aren't going to want to support next week's cash market, but if feedlots align themselves together and make packers wait until later in the week for cattle, packers very well may have to pay more in next week's trade!
FEEDER CATTLE:
The slightly weaker close in the nearby corn contracts allowed the feeder cattle contracts to trade higher throughout Friday's trade. January feeders closed $1.97 higher at $134.57, March feeders closed $2.45 higher at $135.82 and April feeders closed $2.30 higher at $138.30. It was another hurdle to jump through this week with the gusty winds that blew across the Northern and central Plains; the feeder cattle market had to play a tough game of defense. The corn market's surge obviously had a toll on the feeder cattle contract's morale as buyers worry about their cost of gains and pray that the fat cattle will soon see a spike in their end prices. But nonetheless, buyers were aggressive this past week, which helped tremendously. Later-in-the-week buying aggression was less as the windstorm deterred some cattle from coming to town and made travel difficult for buyers. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to last week, feeder steers weighing 500 to 800 pounds sold steady to $5.00 lower, while steers weighing 800 pounds or more sold $8.00 to $11.00 lower. Heifers weighing 600 to 900 pounds sold $2.00 to $5.00 lower and heifers weighing 900 to 950 pounds sold $11.00 cheaper than a week ago. It's very noticeable that given the mild winter that the countryside's seen, that feeders are coming in a little heavier than usual. Demand was good and there were sizeable load lots available. The CME feeder cattle index Jan. 14: down $1.04, $134.45.
LEAN HOGS:
The lean hog contracts endured some choppy trade, but nearby contracts were thankful to close on a stronger note come Friday's close. February lean hogs closed $1.62 higher at $67.92, April lean hogs closed $0.57 higher at $72.65 and June lean hogs closed $0.05 higher at $84.37. Helping the market this past week was the pork cutout value and its support. Even though the cutout value didn't close higher Friday afternoon, it showed ample support earlier in the week. Pork cutouts total 362.86 loads with 336.42 loads of pork cuts and 26.43 loads of trim. Pork cutout values: down $0.48, $80.07. Friday's slaughter is estimated at 386,000 head, 101,000 head less than a week ago and 52,000 head less than a year ago. Thursday's slaughter was revised to 484,000 head. The CME lean hog index for Jan. 13: up $0.39, $65.87
TUESDAY's CASH HOG CALL: Steady. Packers were willing to pay a little more for hogs earlier this week but as the week dragged on, their interest grew slim. Friday's considerably smaller slaughter most evidently had something to do with their buying aggression and we have to remember that Monday is a holiday, which means reduced slaughter speeds. Heading into next week's trade, packers may be a little more aggressive seeing that they are coming out of a long weekend, but then again supplies are ample and their needs to compete with one another to secure hogs is slim.
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