GENERAL COMMENTS:
Live cattle closed lower, feeder cattle closed lower and even the lean hog market closed mostly lower, rounding the week out on a sour note for the livestock contracts. Heading into next week's trade, confirming how much more upside the market has in the lean hog sector and pinpointing how aggressive packers will be is what will be on producers' minds over the weekend. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.58 with a weighted average of $78.52 on 6,440 head. May corn is down 2 1/4 cents per bushel and May soybean meal is down $1.60. The Dow Jones Industrial Average is down 469.64 points and NASDAQ is up 72.91 points.
LIVE CATTLE:
We knew that this week's kill was going to be big, and thankfully the week's estimated figures are projecting that a successful 666,000 head were processed this week, which is 20.7% more than a week ago and 6.1% more than a year ago. But still, even with boxed beef prices closing higher and slaughter running to regain lost ground from last week's shutdown, the cash cattle market can't seem to catch any substantial momentum. There was another light round of trade that developed in parts of the South at $114 and then later in the day at $114.50. Northern cattle traded this week traded from $178.50 to $182. Feedlots played their cards wisely and waited until late in the week to trade, but with packers having a magnitude of committed cattle for this timeframe already spoken for, their need to jump into the cash market wasn't enough to move the market substantially higher. Friday's slaughter is estimated at 119,000 head, 10,000 head more than a week ago and 4,000 head more than a year ago. Saturday's kill is projected at 64,000 head.
The live cattle contracts will roll into next week's trade with April taking the front and center stage as the spot contract. The live cattle complex closed lower as traders stepped to the sidelines, unsure of where the April contract will take the market. April live cattle closed $1.67 lower at $120.00, June live cattle closed $1.07 lower at $118.42 and August live cattle closed $1.10 lower at $117.05.
Boxed beef prices closed higher: choice up $0.14 ($240.53) and select up $0.94 ($229.73) with a movement of 59 loads (43.71 loads of choice, 7.41 loads of select, 4.86 loads of trim and 2.56 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Steady to somewhat higher. It seems like the cash cattle market has been a broken record as of late saying, "maybe next week," as time and time again feedlots aspire to trade cattle higher but packers side-pass having to really support the market.
FEEDER CATTLE:
The corn contracts scaled mostly lower throughout the day, but the feeder cattle contracts weren't able to entice traders into investing within the feeder cattle arena. March feeders closed $1.75 lower at $138.67, April feeders closed $2.50 lower at $142.57 and May feeders closed $2.15 lower at $145.07. Early this week, feeders were sought with extreme buyer aggression, but as the week played on, and buyers secured the cattle they needed. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to a week ago, feeder steers weighing 600 to 850 pounds were steady to $3.00 lower, while steers weighing 850 to 900 pounds were $2.00 to $4.00 lower. Heifers weighing 600 to 700 pounds were steady to $3.00 lower, and heifers weighing 700 to 900 pounds were steady to $3.00 higher. The amount of flesh on the feeder calves played a big role in this week's prices. Cattle that were softer in their condition were as aggressively sought after. The CME Feeder Cattle Index for Feb. 15: down $0.57, $138.91.
LEAN HOGS:
Even though packers were anxious to get another round of hogs committed Friday afternoon -- and didn't mind paying higher prices again -- the market is starting to feel some pressure as the nearby futures contracts closed weaker and pork cutout values dove lower. April lean hogs closed $2.60 lower at $87.15, June lean hogs closed $1.57 lower at $94.17 and July lean hogs closed $0.92 lower at $94.55. Given that the market saw multiple accounts of weaker pork cutout prices throughout this past week's trade, I'm left on edge about how much more upside potential the short term truly has. Pork cutouts totaled 213.51 loads with 191.03 loads of pork cuts and 22.48 loads of trim. Pork cutout values: down $1.29, $93.84. Friday's slaughter is estimated at 488,000 head, steady with a week ago and 5,000 head more than a year ago. Saturday's slaughter is estimated at 174,000 head. The CME Lean Hog Index for Feb. 24: up $0.83, $79.95.
MONDAY'S CASH HOG CALL: Lower. After seeing some hesitation start to develop in the lean hog market, next week's cash hog trade could be weaker as packers bought a slew of hogs this week.
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