GENERAL COMMENTS:
It was a sluggish day for the livestock contracts as the complex drifted lower, unable to keep the trader interest and momentum needed to continue to add to the market's position. Bids have surfaced for this week's cash cattle market, but feedlots are resistant to cave this early in the week when they stand the chance to move this week's cash market potentially $2.00 to $3.00 higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.58 with a weighted average of $56.75 on 5,776 head. March corn is up 1 3/4 cents per bushel and March soybean meal is up $0.10. The Dow Jones Industrial Average is down 633.87 points and NASDAQ is down 355.47 points.
LIVE CATTLE:
This week's cash cattle market is shaping up to be strong. Seeming to mirror the atmosphere of a good card game, feedlots are disinclined enough this week to know not to fold too early and to milk out higher prices. The board's weaker trade doesn't crumble the cash market's confidence as feedlots know that traders are simply looking at how strong the market has performed as of late and want to make sure that this is the direction the market is truly headed before extending themselves any further. And let's not forget that even though the board closed weaker -- boxed beef prices are still on the upward track. February live cattle closed $0.55 lower at $116.45, April live cattle closed $0.47 lower at $112.62 and June live cattle closed $0.42 lower at $119.05. The cash cattle market was quiet all Wednesday, other than the trade that develop on the Fed Cattle Exchange. Wednesday's slaughter is estimated at 119,000 head, 1,000 head less than a week ago and 5,000 head less than a year ago.
The Fed Cattle Exchange Auction listed a total of 1,570 head, of which 1,128 actually sold, 442 head were listed as unsold, as they did not meet the reserve prices that ranged from $112.50 to $115. Opening prices were at $111 to $112, high bids ranged from $112.75 to $113. The state-by-state breakdown looks like this: Kansas 150 total head, all of which went unsold; Texas 1,193 total head, with 901 head sold at $112.75-$113, 292 head went unsold; Oklahoma 227 total head, all of which sold at $113.
Boxed beef prices closed higher: choice up $0.60 ($229.66) and select up $1.66 ($218.99) with a movement of 121 loads (71.56 loads of choice, 11.76 loads of select, 15.99 loads of trim and 21.32 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Higher. Feedlots -- the last time the live negotiated prices traded over $112 was the week ending May 30, 2020. The market is in a fine position to push for higher prices, don't squander this opportunity!
FEEDER CATTLE:
The feeder contracts weren't pressured by the corn market throughout Wednesday's trade, but traders seemed to think the entire livestock complex needed a correction, which led to Wednesday's dreary trade. March feeders closed $1.40 lower at $140.07, April feeders closed $1.20 lower at $143.07 and May feeders closed $1.07 lower at $144.87. The feeder cattle contracts are gambling with the corn market, knowing that there's upward potential in the market, but continuing to monitor input costs is a necessity. At Winter Livestock in Dodge City, Kansas, compared to a week ago, feeder steers weighing 600 to 950 pounds sold steady. Steer calves weighing 450 to 600 pounds sold $2.00 to $4.00 lower. Heifer calves weighing 450 to 650 pounds sold steady. Heifers weighing 650 to 750 pounds sold $2.00 to $3.00 higher. Heifers weighing 775 to 900 pounds sold steady. There was only a light test of slaughter cows and bulls, but a higher undertone was noted. The CME feeder cattle index for Jan. 26: down $0.13, $134.83.
LEAN HOGS:
Upon reaching contract highs for a lot of the lean hog contracts, Wednesday ended up trading lower as traders grew leery of the market's position. Thankfully the market's fundamental drivers of pork cutout values and the cash market both closed higher, which should encourage higher trade long term in the trends can continue. Pork cutouts total 310.98 loads with 260.77 loads of pork cuts and 50.21 loads of trim. Pork cutout values: up $0.18, $81.11. Wednesday's slaughter is estimated at 492,000 head, 6,000 head less than a week ago and 3,000 head less than a year ago. Tuesday's slaughter was revised to 449,000 head. The CME lean hog index for Jan. 25: up $0.35, $66.23.
THURSDAY'S CASH HOG CALL: Steady to somewhat higher. Packers may be willing to move the cash market slightly higher again Thursday as their processing was lighter early in the week. In order to catch back up to necessary levels, they may need to jump into the cash market.
No comments:
Post a Comment