GENERAL COMMENTS:
Thursday ended up being a great day for the livestock market as support was ample and contracts were able to close fully higher. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.18 with a weighted average of $54.90 on 7,164 head. March corn is up 2 1/4 cents per bushel and March soybean meal is down $4.20. The Dow Jones Industrial Average is down 12.37 points and NASDAQ is up 73.67 points.
LIVE CATTLE:
Thursday ended up being a strong day for the cattle market as boxed beef prices continue to show strong demand from consumers, the futures market was able to secure noteworthy gains and the excitement throughout the market helped tip the cash cattle trade in the North from slightly lower than last week's trade to mostly steady. Feedlots are kicking themselves wishing they would have waited until later in the week to market their cattle as the stars aligned and could have granted a slightly higher market, if not fully steady. February live cattle closed $0.75 higher at $114.10, April live cattle closed $1.05 higher at $119.95 and June live cattle closed $0.97 stronger at $117.12. It's especially exciting to watch the April and June contracts push highs and get to levels where cash cattle soon need to follow to. There was a light trade that developed Thursday afternoon in the Northern Plains for $173 which is mostly steady with last week's business. Thursday's slaughter is estimated at 120,000 head, steady with a week ago and 2,000 head less than a year ago.
On Friday's radar is the month Cattle on Feed (COF) report which is anticipated to be favorable to cattle producers and feedlots alike. Placements are expected to be around 3% lighter than a year ago, which if Friday's report does indeed share lighter places, than this will be the third COF report in a row to print lighter placements.
Thursday's actual slaughter data comes as a mixed bag for the cattle market. The industry is thankful to see a swift slaughter pace, as for the week ending Jan. 9, slaughter totaled 652,330 head, but higher carcass weights weren't the topping to the cake that the market wanted. Steers averaged 923 pounds (up 3 pounds from the previous week) and heifers remained steady at 851 pounds.
Boxed beef prices closed higher: choice up $2.29 ($221.20) and select up $3.00 ($210.28) with a movement of 127 loads (80.92 loads of choice, 16.71 loads of select, 7.00 loads of trim and 22.54 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Unfortunately, with how timing worked this week, it's unlikely that feedlots will be able to add anymore positioning to the cash cattle market this week. Some more clean-up trade is expected but it will most likely be for steady prices with what the week has offered.
FEEDER CATTLE:
Yes, nearby corn prices closed $0.02 to $0.03 stronger, but that didn't put a damper on the feeder cattle market whatsoever. As the day grew longer, the support seen throughout the feeder cattle contracts grew more supportive and allowed for the nearby contracts to close well over $1.00 stronger. January feeders closed $0.57 higher at $135.87, March feeders closed $1.62 higher at $139.15 and April feeders closed $1.25 higher at $141.87. Finally, some upward momentum has been seen throughout the cattle contracts and producers can somewhat catch their breath. Feed prices continue to be a concern, but if cattle prices can scale higher alongside the strength in the corn market, it makes it a little easier to bear. At Winter Livestock in Pratt, Kansas, compared to a week ago, feeder steers weighing 500 to 1,000 pounds sold $2.00 to $5.00 higher. Steer calves weighing 300 to 475 pounds sold $2.00 higher. Feeder heifers weighing 400 to 850 pounds sold $3.00 to $5.00 higher. Demand was excellent all throughout the sale and buyers were extremely aggressive. Slaughter cows sold $2.00 to $5.00 higher and slaughter bulls sold $2.00 to $4.00 higher. The CME feeder cattle index for Jan. 20: up $0.38, $133.19.
LEAN HOGS:
The April lean hog contracts shot up to the resistance plane at $75.00 but decided that was a little steep and was going to be hard to achieve all in one day. Nevertheless, the lean hog contracts closed mostly higher other than the spot February contracts, which only closed mildly lower. The market's support was thankfully complimented by a higher cutout value at closing, which could encourage stronger trade come Friday. February lean hogs closed $0.32 lower at $68.10, April lean hogs closed $0.82 higher at $73.90 and June lean hogs closed $0.77 higher at $85.27. Pork cutouts total 271.84 loads with 230.29 loads of pork cuts and 41.55 loads of trim. Pork cutout values: up $1.24, $80.26. Thursday's slaughter is estimated at 498,000 head, 14,000 head more than a week ago and 7,000 head more than a year ago. The CME lean hog index for Jan. 19: down $0.25, $65.67.
Thursday's actual slaughter data shared higher weights but a strong kill for the week ending Jan. 9. Hog slaughter totaled 2,829,494 head and live weights averaged 297 pounds (up 3 pounds from the previous week) and dressed weighted average 222 pounds (up 2 pounds).
FRIDAY'S CASH HOG CALL: Steady to somewhat lower. With packers having purchased a considerable volume of hogs at higher money earlier in the week, their goal is going to be to secure as many hogs as possible for cheaper prices.
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