General Comments
Corn prices are skyrocketing higher after the midmorning WASDE report shared less than expected corn stocks. The lean hog contracts are still keeping their rally, the live cattle contracts are split with nearby contracts trading mildly lower and deferred contracts trading somewhat higher and the feeder cattle market is enduring another considerably lower day feeling immensely pressured by their rising cost of gains. March corn is up 25 cents per bushel and March soybean meal is up $19.90. The Dow Jones Industrial Average is down 37.36 points and NASDAQ is down 34.12 points.
LIVE CATTLE
The live cattle contracts trade fully mixed with nearby contracts pressured to trade modestly lower while deferred contracts trade mildly higher. February live cattle are down $0.67 at $112.72, April live cattle are down $0.57 at $117.77 and June live cattle are down $0.17 at $114.77. Traders seem opposed to risking their positions in the nearby contracts and feel much safer investing in the contracts trading later this summer. Thankfully midday boxed beef prices printed higher, which comes as one of the limited supporting factors to this week's cash market. Still, the countryside sits idly without bids developing as of yet. Southern feedlots have noted their asking prices at $114, while the North still has yet to share their asking prices.
Boxed beef prices are higher: choice up $1.56 ($209.25) and select up $0.84 ($196.58) with a movement of 84 loads (47.82 loads of choice, 16.14 loads of select, 5.15 loads of trim and 14.54 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts have been on edge knowing that Tuesday's WASDE report would give better insight to where the corn market may be heading and upon the report's arrival where USDA estimated 2020-21 U.S. ending corn stocks at 1.552 bb, corn prices have shot as much as $0.25 higher in nearby contracts. Higher corn prices don't necessarily come as surprise as many assumed that the market's top wasn't in, but just how high the market will scale still remains the unanswered question. Meanwhile the feeder cattle contracts dip lower trading anywhere from $1.00 to $2.00 lower throughout the entire marketplace. January feeders are down $1.75 at $134.25, March feeders are down $1.97 at $134.92 and April feeders are down $1.95 at $137.07. Tuesday's stout surge in corn prices will most likely derail some of the strength that was found in the feeder cattle markets throughout the countryside. The problem is not only corn-based though, but really all inputs. With available wheat fields hard to come by, hay prices plenty high and now corn prices above what the industry's grown accustom to over the last six years producers and buyers alike will have to get creative in how they manage these calves and feeder cattle.
LEAN HOGS
The lean hog market was disappointed to see a slightly weaker trade Tuesday morning for the cash market, but thankfully the continued support from the pork cutout values has helped the market continue to trade higher. February lean hogs are up $0.45 at $68.92, April lean hogs are up $0.60 at $73.55 and June lean hogs are up $0.80 at $84.80.
The projected lean hog index for 1/11/2021 is up $0.58 at $64.49, and the actual index for 1/8/2020 is up $0.57 at $63.91. Hog prices are lower on the National Direct Morning Hog Report, down $0.38 with a weighted average of $55.49, ranging from $44.00 to $56.07 on 3,930 head and a five-day rolling average of $54.87. Pork cutouts total 271.79 loads with 257.20 loads of pork cuts and 14.59 loads of trim. Pork cutout values: up $1.58, $84.96.
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