Wednesday Midday Livestock Market Summary - Support Slips Away from Contracts

General Comments

The week's support has left the livestock complex and leaves the live cattle, feeder cattle and lean hog contracts to all trade lower. The gusto of support that was ample earlier in the week has come up short upon Wednesday's arrival. The feeder cattle contracts are lacking trader interest, but their lower trend is spurred by higher corn prices as even the corn market is trading mostly lower. March corn is up 1 cent per bushel and March soybean meal is up $0.10. The Dow Jones Industrial Average is down 342.23 points and NASDAQ is down 162.40 points.

LIVE CATTLE

As the live cattle contracts rest from their recent run of higher prices, once again the market's eyes fall to the cash cattle market as packers hate the idea of the market trading much higher but feedlots know they need to capitalize on this opportunity to gain some market-share. Live cattle contracts are trading modestly lower with the entire complex seeing pretty even pressure as the contracts trade anywhere from $0.62 to $0.90 lower. February live cattle are down $0.70 at $116.30, April live cattle are down $0.62 at $112.47 and June live cattle are down $0.60 at $118.87. Favoring the cash market's position is once again the strong, continued support that boxed beef prices are seeing. There's been a little interest develop in the cash cattle market as bids of $173 are on the table in Nebraska -- which is mostly steady with last week's trade. Asking prices are around $115 in the South and $182 to $185 in the North. If packers want to get cattle procured this week, they are going to need to up their ante. Trade could develop as soon as this afternoon, but if feedlots are going to get their fully asking prices it's more likely that trade waits until Thursday if not even until Friday. But remember, all good dealings take time!

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 are higher: choice up $0.73 ($229.79) and select up $1.44 ($218.77) with a movement of 73 loads (40.95 loads of choice, 9.32 loads of select, 11.06 loads of trim and 11.34 loads of ground beef).

FEEDER CATTLE

It's another day of lower trade for the livestock contracts as the livestock sector neglects to draw the trader interest necessary to rally the complex higher. March feeders are down $0.72 at $140.75, April feeders are down $0.70 at $143.57 and May feeders are down $0.82 at $145.12. Even though feeders would obviously like to see the feeder cattle contracts trading higher, Wednesday's weakness thankfully isn't stemming for higher corn prices as the corn contracts are too trading lower. If the cash cattle market can indeed secure higher profits this week, the momentum will help the overall moral of the feeder cattle contracts.

LEAN HOGS

With the vast support that the lean hog contracts have seen over the last week, the contracts are taking a breather and trading modestly lower into Wednesday's afternoon. February lean hogs are down $0.10 at $70.35, April lean hogs are down $0.45 at $76.50 and June lean hogs are down $0.17 at $87.75. Slaughter speeds were down slightly on Tuesday which is understandable due large amount of snow that parts of the Midwest endured, but hopefully by Wednesday afternoon packers are back to processing at higher levels.

The projected lean hog index for 1/26/2021 is up $0.72 at $66.96, and the actual index for 1/25/2021 is up $0.36 at $66.24. Because hog prices were unavailable Tuesday due to confidentiality on the National Direct Morning Hog Report there is no comparison for Wednesday's price levels but Wednesday's market has traded with a weighted average of $55.86, ranging from $51.00 to $58.50 on 4,076 head and a five-day rolling average of $55.38. Pork cutouts total 177.00 loads with 149.25 loads of pork cuts and 27.74 loads of trim. Pork cutout values: up $2.70, $83.63.