GENERAL COMMENTS:
Friday's trade wasn't overly eventful as the futures market was lackadaisical and the cash cattle market was slow develop. Feedlots managed their showlists to the best of their abilities and were once again able to push the cash market higher! Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.17 with a weighted average of $61.33 on 6,588 head. March corn is down 1 1/2 cents per bushel and March soybean meal is down $2.60. The Dow Jones Industrial Average is up 92.38 points and NASDAQ is up 78.56 points.
From Friday to Friday livestock futures scored the following changes:
February live cattle up $1.68, April live cattle up $1.93; March feeder cattle up $0.55, April feeder cattle up $1.45; February lean hogs up $1.18, April lean hogs up $3.65.
LIVE CATTLE:
Live cattle futures may have closed mostly lower, but the day ended on a positive note as spot February and April were able to close higher and the cash market secured gains for the week's trade. February live cattle closed $0.27 higher at $116.72, April live cattle closed $0.02 higher at $123.77 and June live cattle closed $0.22 lower at $119.97. Boxed beef showed signs it is looking for a top, but largely the week was still able to trade mostly higher. As packers reap strong profits from excellent beef demand, their desire to get through routine plant maintenance will help get the plants that are down back up and running sooner rather than later. Friday's cash cattle trade wasn't a runaway, shoot for the stars higher type of deal, but feedlots managed to add, once again, more money to last week's business. Northern cattle traded dressed for $178 to $180, which was steady to $2.00 higher, and Southern live cattle traded for $114, which is $1.00 stronger than last week. Friday's slaughter is estimated at 113,000 head -- 7,000 head less than a week ago and 4,000 head less than a year ago. Saturday's slaughter is projected to be around 70,000 head.
Boxed beef prices showed signs this past week the market is finding its seasonal top, but for the week as a whole higher prices were found. Choice cuts averaged $235.31 this week, which was up $5.03 from last week's trade; select cuts averaged $223.05, gaining $3.83 from last week's business. The week's total movement of cuts, grinds and trim totaled 573 loads.
Boxed beef prices closed higher: choice up $0.33 ($234.58) and select up $0.35 ($220.79) with a movement of 100 loads (52.25 loads of choice, 12.09 loads of select, 26.54 loads of trim and 9.50 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Higher. Packers have some inventory of cattle built up to their favor and will tout that with boxed beef prices looking to flatten its progression that cash shouldn't trade higher. But feedlots know better than to lay down on the job and could add more money to this week's trade with strategic marketing.
FEEDER CATTLE:
With nearby corn prices trading close to $5.50 per bushel, feeder cattle futures felt the pressure and traded lower. March feeders closed $1.22 lower at $138.27, April feeders closed $0.47 lower at $142.20 and May feeders closed $0.30 lower at $144.77. The futures market was a tough battle ground for feeder cattle contracts this last week as the market fundamentally sees the strength that's to come in the months ahead and is complimented by demand throughout the countryside. But until cash cattle can trade substantially higher and the long-term trajectory of the corn market is better understood, high feed prices pull the market lower. The Oklahoma Weekly Cattle Auction Summary shared that, compared to a week ago throughout the state, feeder steers sold steady to $4.00 higher and feeder heifers sold steady to $2.00 lower. Steer calves sold steady to $4.00 higher and heifer calves sold steady to $4.00 higher with instances of $10.00 to $12.00 higher. Demand was strong throughout the week despite the futures market back-and-forth behavior. Slaughter cow sold $1.00 to $7.00 higher and slaughter bulls sold $3.00 higher as packer demand was excellent. The CME Feeder Cattle Index 2/4/2021: down $0.62, $135.65.
LEAN HOGS:
Right before closing the spot February lean hog contract encountered a little pressure, but that didn't derail the rest of the lean hog contracts from closing higher. February lean hogs closed $0.05 lower at $70.97, April lean hogs closed $1.00 higher at $80.30 and June lean hogs closed $1.10 higher at $83.92. The lean hog contracts have been on fire, adding to their position day in and day out, all while being supported by the market fundamentals. Heading into the weekend, Friday's afternoon cash market even saw an uptick in demand from packers, which allowed the day's closing cash price to close modestly higher. Pork cutouts totaled 286.05 loads with 257.69 loads of cuts and 28.36 loads of trim. Pork cutout values: down $1.56, $84.18. Friday's slaughter is estimated at 477,000 head -- 10,000 head less than a week ago and 13,000 head less than a year ago. Saturday's slaughter is estimated to be around 291,000 head and Thursday's hog slaughter was revised to 456,000 head. The CME Lean Hog Index 2/3/2021: down $0.08, $69.09.
MONDAY'S CASH HOG CALL: Steady. Packers like the demand they've been met with but will need to see continued support from the pork cutout values in order to keep cash prices clipping higher.
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