GENERAL COMMENTS:
Monday ended up being a good day for the livestock sector as most of the livestock contracts were able to close higher and the fundamental support of the marketplace remains ample. USDA is having technical issues, so a lot of their reports were not available at the time these comments were published. Hog prices are unavailable due to technical issues at the USDA. March corn is up 2 1/4 cents per bushel and March soybean meal is down $0.50. The Dow Jones Industrial Average is up 229.29 points and NASDAQ is up 332.71 points.
LIVE CATTLE:
The live cattle contracts fared well throughout Monday's trade. Nearby contracts faced a little opposition, but for the most part, the complex closed higher. February live cattle closed $0.17 lower at $114.87, April live cattle closed $0.15 lower at $121.70 and June live cattle closed $0.62 higher at $118.22. Following last week's bullish Cattle Inventory report and the gusto that the cash cattle market brought, the live cattle market continues to be fueled with positive support. Nearby contracts did close lower, but looking at the market's charts and how strong the technical movement has been as of lately, traders are wondering how much more support this market will demand. Thankfully, with the exceptional fundamental backing of stellar boxed beef prices, stronger cash cattle trade and a spike in beef processing, the fundamental drive and support is there. It was too early in the week for any business to develop but feedlots are expected to price their cattle higher again this week and most likely in line with the February board. Showlists this week are mixed with slightly higher numbers in Texas, but fewer cattle in Kansas, Nebraska and Colorado. Monday's slaughter is estimated at 117,000 head, 2,000 head more than a week ago and 3,000 head less than a year ago.
Last week's negotiated cash cattle purchases totaled 92,524 head. Of that, 80,103 head are committed for delivery in the next two weeks and the remaining 12,421 head are committed for delivery in the following 15 to 30 days. Boxed beef prices are unavailable due to technical issues at USDA.
TUESDAY'S CASH CATTLE CALL: Higher. It's unlikely that trade will be pushed to develop as early as Tuesday, but when trade does develop this week, it's most likely going to be for $1.00 to $2.00 higher.
FEEDER CATTLE:
Even with the corn market's slight recovery from the market's lower trade earlier in the day, feeder cattle contracts still felt confident, closing higher and especially so in the deferred contracts. March feeders closed $0.20 higher at $137.92, April feeders closed $0.32 higher at $141.07 and May feeders closed $0.67 higher at $143.05. Largely the market felt the support from the live cattle market and from the demand throughout the countryside. With boxed beef prices still scaling higher -- and there being support for the market's cash cattle trade -- these rejuvenated markets end up tricking down and supporting the feeder cattle complex. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, this week's midsession report shared that steers are trading steady overall but steers weighing 520 pounds and under are trading as much as $7.00 higher. Heifers are trading $2.00 to $6.00 higher. Meanwhile at Oklahoma National Stockyards in Oklahoma City, Oklahoma, on a big run of 10,500 head at midsession, and when compared to last week, feeder steers are selling $2.00 to $5.00 lower on a light offering while feeder heifers are selling $1.00 to $2.00 lower. Steer and heifer calves are trading anywhere from $2.00 to $4.00 higher with strong demand. The CME feeder cattle index for Jan. 29: up $0.41, $136.43.
LEAN HOGS:
The lean hog market fought some nearby pressure and ultimately closed mixed, though deferred contracts were able to keep their modest gains through closing. February lean hogs closed $0.25 lower at $69.55, April lean hogs closed $1.15 lower at $75.50 and June lean hogs closed $0.40 lower at $86.90. The market has worked its way to higher price levels in the last 10 days but now needs the technical and fundamental backing to maintain these prices. Technically, traders are somewhat leery of the marketplace and look for fundamental assurance before they decide to dive into the contracts again and support higher marks. Monday's slaughter is estimated at 483,000 head, 3,000 head less than a week ago and 8,000 head less than a year ago. Pork cutouts are unavailable due to technical difficulties at the USDA. The CME lean hog index for Jan. 28: up $0.11, $67.40.
TUESDAY'S CASH HOG CALL: Lower. With the futures market needing validation and packers not running as swift of slaughter speeds, the cash market will most likely be steady if not somewhat lower come Tuesday.
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