GENERAL COMMENTS:
Following last week's chaos from packing plants being shut down, cattle under immense stress from blizzard conditions, and Friday's surprising Cattle on Feed Report, live cattle futures are reluctant to trade higher while the lean hog and feeder cattle futures jump to the occasion. As the lean hog contracts continue to push their position higher and higher, the market needs the fundamental support of a strong cash hog movement and strong pork cutout values to continue in order for the technical aspect of the market to support these higher prices. March corn is up 4 1/2 cents per bushel and March soybean meal is down $0.70. The Dow Jones Industrial Average is up 61.48 points and NASDAQ is down 250.97 points.
LIVE CATTLE:
Friday's Cattle on Feed Report could be partially to blame for Monday's doggish trade throughout the live cattle contracts. April live cattle are down $0.47 at $123.20, June live cattle are down $0.57 at $119.95 and August live cattle are down $0.35 at $118.07. Thankfully Monday's slaughter is projected to process around 115,000 head, which is far from 120,000 head but it's better than what it could have been. Seeing where the day ends up with slaughter totals will be insightful as the market desperately needs packing plants to open full bore this week to keep supplies available and to keep up with demand. Thankfully packers have every incentive they need to push vigorously in their efforts to get plants running as boxed beef prices favor their bottom lines. This week's cash cattle movement is going to be dicey. Packers have a plethora of cattle already committed for this time frame and won't be easily persuaded into paying more money as feedlots would like. Until at least the first week of April, feedlots are going to have to play strategically with their cash cattle marketing efforts to achieve higher prices. Showlists this week are somewhat higher in Texas, but lower in Kansas, Nebraska and Colorado.
Last week's negotiated cash cattle movement totaled 74,306 head. Of that 50,447 head (68%) are committed for delivery in the next two weeks while the remaining 23,859 head (32%) are scheduled for delivery in the following 15 to 30 days. Last week's movement, even though it was below 100,000 head, was greater than what we assumed initially given the temporary plant shutdowns in the South.
Boxed beef prices are higher: choice up $0.15 ($239.38) and select up $0.98 ($228.88) with a movement of 55 loads (41.19 loads of choice, 4.05 loads of select, zero loads of trim and 10.16 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures cautiously tip-toed into Monday, but once the markets started actively trading the feeder contracts opted to scale higher even though the corn market is still rallying modestly. Last week's weather shut sale barns across the Midwest and Southern Plains, so this week's sales are expected to run with large receipts and producers could need to clean up their barnyards with the odds-and-ends cattle that need to go. March feeders are steady at $139.12, April feeders are up $0.32 at $143.00 and May feeders are up $0.27 at $146.00.
LEAN HOGS:
The lean hog complex is hungry for MORE! Yes, even more than what the market has already successfully accomplished. April lean hogs are up $0.35 at $84.85, June lean hogs are up $0.47 at $92.80 and July lean hogs are up $0.50 at $92.82. With futures (for the most part) continuing to trade at new contract highs, the market needs the fundamental side of the marketplace to continue to show demand in order to sustain these prices. Thankfully the market's pork cutout values continue to creep higher and show vast interest from both domestic and international buyers.
The projected CME Lean Hog Index for 2/19/2021 is up $0.31 at $77.74, and the actual index for 2/18/2021 is up $0.23 at $77.43. Hog prices are incomparable on the National Direct Morning Hog Report because on Friday prices were unavailable due to confidentiality. Monday morning did sell 4,983 head with a weighted average price of $69.51, ranging from $61.00 to $74.00 pushing the five-day rolling average to $68.48. Pork cutouts total 147.64 loads with 136.06 loads of pork cuts and 11.58 loads of trim. Pork cutout values: up $1.86, $93.35.
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