General Comments
The cautious tone of the marketplace has left the livestock contracts to trade mixed. Fundamentally, the market still stands to trade higher, but the opposition from traders is keeping the market from achieving those goals. The cash cattle market is still quiet; painfully quiet, as feedlots are unwilling to drop their asking prices, knowing all too well that cash prices need to be stronger. March corn is up 3 cents per bushel and March soybean meal is down $7.10. The Dow Jones Industrial Average is up 595.84 points and NASDAQ is up 194.18 points.
LIVE CATTLE
The live contracts are in a position much like the rest of the livestock complex; facing resistance from trading higher as traders are hesitant of the marketplace, but the market's fundamentals keep pointing to higher levels. February live cattle are down $0.35 at $116.10, April live cattle are up $0.22 at $112.85 and June live cattle are up $0.07 at $119.12. With a strong export report accompanied by continued support for the boxed beef market -- feedlots are playing a tough, TOUGH game of hard ball this week and aren't willing to let their cattle go for steady money. Southern feedlots are determined to get $114 to $115 and Northern feedlots have their cattle priced at $182 to $185. There's also been mention that a major feedlot is looking to add to their Saturday kill schedule which, favors feedlots once again. Bids of $112 are offered in Texas, but otherwise the countryside sits idle as feedlots are willing to wait.
Beef net sales of 28,800 metric tons (mt) reported for 2021, increases primarily for Japan (9,100 mt, including decreases of 600 mt), South Korea (8,100 mt, including decreases of 400 mt), Mexico (3,800 mt, including decreases of 100 mt).
Boxed beef prices are higher: choice up $0.98 ($230.64) and select up $2.39 ($221.38) with a movement of 63 loads (39.39 loads of choice, 7.88 loads of select, 4.95 loads of trim and 10.35 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts are met with mixed support as the contracts trade on both sides of steady. Nearby contracts are finding mild support, which is likely being encouraged by the strong feeder cattle sales throughout the countryside and the strengthening undertone that's begging the cash cattle market to trade higher as well. March feeders are up $0.10 at $140.17, April feeders are down $0.10 at $142.97 and May feeders are down $0.20 at $144.67. Largely, the board continues to trade in the same sheepish manner it presented Wednesday as traders are leery about how much higher they are going to take this market in the near future.
LEAN HOGS
Of all the livestock contracts, the lean hog complex is faring the best with modest support seeming to come to the contracts easily. February lean hogs are down $0.42 at $70.15, April lean hogs are up $0.65 at $76.95 and June lean hogs are up $0.22 at $87.57. With the market's strong export report, higher cash prices and elevated pork cutout values -- by all means the market should encourage higher trade!
Pork net sales of 52,900 mt reported for 2021, increases primarily for Mexico (18,900 mt, including decreases of 1,100 mt), China (13,900 mt, including decreases of 1,000 mt), the Philippines (6,000 mt, including decreases of 200 mt).
The projected lean hog index for 1/27/2021 is up $0.33 at $67.29, and the actual index for 1/26/2021 is up $0.72 at $66.96. Hog prices are higher on the National Direct Moring Hog Report, up $0.42 with a weighted average of $56.28, ranging from $51.00 to $58.00 on 4,440 head and a five-day rolling average of $55.89. Pork cutouts total 139.96 loads with 110.89 loads of pork cuts and 29.07 loads of trim. Pork cutout values: up $3.31, $84.42.
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