GENERAL COMMENTS:
Tuesday was a fruitful day for the livestock contracts as the market's support is ample and is allowing the entire complex to trade higher. Wednesday will be critical for the livestock market as corn prices could hurt feeder cattle futures' ability to keep trading higher, and with the lean hog contracts powering past resistance levels, continued fundamental and technical support is vital. Hog prices closed $2.27 higher on the National Direct Afternoon Hog Report equating to a weighted average of $58.44 on 9,227 head. March corn is down 6 1/4 cents per bushel and March soybean meal is down $2.50. The Dow Jones Industrial Average is up 475.57 points and NASDAQ is up 209.38 points.
LIVE CATTLE:
It was a positive day for the livestock contracts and the market's support only grew stronger the longer the day traded. February live cattle closed $1.10 higher at $115.97, April live cattle closed $0.82 higher at $122.52 and June live cattle closed $0.57 higher at $118.80. With the market's slight correction late last week, there's been renewed buying power extended to the contracts, which is allowing traders to re-invest in a confident manner. It's helpful that the futures market is trading higher as feedlots have their eyes on higher prices again this week. The countryside remained quiet throughout the afternoon, but asking prices in the South were noted at $115-plus, but the North has yet to show their cards for the week. Tuesday's slaughter is estimated at 118,000 head, 1,000 head more than a week ago and 3,000 head less than a year ago.
The Texas Cash Pool sold 688 head at $113.22, with the other bids coming in at $112.65, $112.51 and $113.05. Last week's winning bid was $112.55, making this week's sale $0.67 stronger.
Boxed beef prices closed mixed: choice up $1.08 ($236.76) and select down $0.55 ($225.04) with a movement of 93 loads (63.03 loads of choice, 11.39 loads of select, 10.86 loads of trim and 7.54 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. When cash cattle trade this week, higher prices are certainly attainable. Feedlots have their hopes set on at least $1.00 to $2.00 stronger. Trade may start as early as Wednesday after the Fed Cattle Exchange, but after last week's success, feedlots will be willing to let the week pay out, looking for the prices they desire, and knowing that packers will need to secure supplies.
FEEDER CATTLE:
The corn market kept with its slight regression throughout the day and ultimately relieved the feeder cattle contracts from any added pressure from rising feed costs. March feeders closed $1.20 higher at $139.12, April feeders closed $1.17 higher at $142.25 and May feeders closed $1.32 higher at $144.37. As the feeder cattle contracts have seen significant pressure over the last week, the market now sits in a fine position to recapture some lost ground without coming up against resistance levels in the near future. With cash cattle trade expected to be $1.00 to $2.00 higher this week and, with feeder cattle demand anticipated to remain strong, the only thing that could starkly hinder the feeder cattle contracts from rallying is a spike again in corn prices. At Russell Livestock Auction in Russell, Iowa, compared to two weeks ago, steers under 650 pounds sold $15.00 to $20.00 higher while steers over 650 pounds were mostly $6.00 to $11.00 higher. Heifers under 600 pounds were mostly $5.00 to $6.00 higher as well as the heavier heifers that also sold $5.00 to $6.00 stronger. Demand was exceptionally strong and kept the sale strong from start to finish. The CME Feeder Cattle Index for Feb. 1: down $0.03, $136.40.
LEAN HOGS:
As the lean hog market has come up against resistance levels on multiple contract fronts, the market didn't bat at eye at the pressure that could have developed as support for the market is bountiful. February lean hogs closed $2.00 higher at $71.55, April lean hogs closed $2.57 higher at $78.07 and June lean hogs closed $1.20 higher at $88.10. The market's support is multi-faceted as Tuesday's slaughter was aggressive, cash prices were keenly higher and traders were willing to invest. Pork cutouts total 380.07 loads with 344.19 loads of pork cuts and 35.88 loads of trim. Pork cutout values: down $1.56, $81.10. Tuesday's slaughter is estimated at 495,000 head, 46,000 head more than a week ago and 2,000 head more than a year ago. The CME Lean Hog Index for Jan. 29: up $0.87, $68.27.
WEDNESDAY'S CASH HOG CALL: Steady. Packers bought a considerable number of hogs Tuesday afternoon for considerably higher prices. Their aggression leads one to believe that they intend to keep processing at rapid speeds, which could allow for steady prices Wednesday afternoon.
No comments:
Post a Comment