General Comments
The livestock contracts continue to trade split heading into Wednesday's afternoon as the live cattle market is trading mostly lower but the lean hog contracts have found the fundamental support needed to yield a higher trading day. The cash cattle market is still quiet, but packer interest should improve throughout the day. March corn is down 1 1/2 cents per bushel and March soybean meal is down $5.40. The Dow Jones Industrial Average is up 210.75 points and NASDAQ is up 230.49 points.
LIVE CATTLE
Other than in the spot February live cattle contract, losses are seen throughout the live cattle complex as the deferred contracts are seeming to adjust to lower price levels even though the market was hopeful that the in time those higher price levels would be attainable. February live cattle are up $0.40 at $113.75, April live cattle are down $0.27 at $119.07 and June live cattle are down $0.60 at $116.12. The cash cattle market continues to be very quiet though its likely that packer acquisition will improve later in the day. Feedlots have a tough job ahead of them as packers will fight tooth and nail to keep the cash market lower, but if the bulk of the week's trade can hold out until later in the week then the market stands a chance to push prices $1.00 higher verses holding at steady. Helping add to feedlots ability to demand higher prices is the strengthening boxed beef market.
The Fed Cattle Exchange Auction listed a total of 1,547 head, of which 567 actually sold, 980 head were listed as unsold, as they did not meet the reserve prices, that ranged from $110 to $112. Opening prices ranged from $108 to $109, high bids ranged from $110.50 to $111. The state by state breakdown looks like this: Kansas 299 total head, all 299 head sold at $110.75 (grid based); Texas 1,248 total head, with 268 head sold at $110.50-$111.00 (live), 980 head went unsold.
Boxed beef prices are higher: choice up $0.91 ($218.40) and select up $0.50 ($206.94) with a movement of 85 loads (55.73 loads of choice, 10.31 loads of select, 10.37 loads of trim and 8.22 loads of ground beef).
FEEDER CATTLE
The feeder cattle contracts continue to rally, adding to what Tuesday was already able to secure and continuing to take advantage of the support the market's offering while corn prices trade lower. January feeders are up $0.80 at $135.20, March feeders are up $1.07 at $137.87 and April feeders are up $1.05 at $140.65. The market has plenty of upside potential, and so long as support continues to encourage the market's trade, higher positioning can easily be obtained.
LEAN HOGS
Tuesday was a frustrating trade for the lean hog market but without fundamental support the market was able to sustain at the levels it attempted to trade at. Thankfully with Wednesday's arrive the cash market has traded stronger and pork cutout values also show strong profits. February lean hogs are up $1.20 at $67.67, April lean hogs are up $0.97 at $72.40 and June lean hogs are up $0.72 at $83.72. In order for the lean hog market to really capitalize on these fundamental strong points it will be important that the fundamental factors continue to trade positively through the day's close.
The projected lean hog index for 1/19/2021 is up $0.02 at $65.67, and the actual index for 1/18/2021 is up $0.12 at $65.65. Hog prices are higher on the National Direct Morning Hog Report, up $1.67 with a weighted average of $56.64, ranging from $50.00 to $58.50 on 7,160 head and a five-day rolling average of $54.84. Pork cutouts total 225.02 loads with 196.55 loads of pork cuts and 28.47 loads of trim. Pork cutout values: up $4.33, $81.75.
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