GENERAL COMMENTS:
Both the live cattle and lean hog contracts fought some pressure in their nearby contracts, but the rest of the contracts were left to trade modestly higher into closing. The feeder cattle contracts, however, shot higher upon Tuesday's bearish findings in the WASDE report for the corn market and closed well above $1.00 higher in the entire sector. Hog prices closed sharply higher on the National Direct Afternoon Hog Report, up $3.48 with a weighted average of $64.10 on 8,830 head. March corn is down 7 1/2 cents per bushel and March soybean meal is up $2.10. The Dow Jones Industrial Average is down 9.93 points and NASDAQ is up 20.06 points.
LIVE CATTLE:
The April and June live cattle contracts closed lower but, for the most part, the live cattle complex accomplished closing higher yet again. February live cattle closed $0.87 higher at $117.45, April live cattle closed $0.12 lower at $123.82 and June live cattle closed $0.37 lower at $119.65. As the February live cattle contract nears its end, traders are looking to reinvest their positions before the contract expires in two weeks. Meanwhile, the cash cattle side of the market is idly quiet. Feedlots are gunning for higher prices and are ready to wait until Friday's bitter end if needed to move the market higher again this week. Both the Texas and Kansas Cash Cattle Pool bids showed that packers are willing to pay more for cattle this week and feedlots see those bids as a sign that the cash market can too see stronger trade. Tuesday's slaughter is estimated at 115,000 head, 3,000 head less than a week ago and 9,000 head less than a year ago.
The Texas Cash Pool Listed 771 head that ended up selling to for $114.20, which is $0.98 higher than a week ago. Other packers offered bids of $114.04, $113.22 and $113.01 for the cattle in Texas. The Kansas Cash Pool Listed 188 head that ended up selling for 114.20 as well. Other packers offered $114.00, $113.22 and $113.01.
Boxed beef prices closed mixed: choice down $1.91 ($234.29) and select up $0.12 ($220.73) with a movement of 121 loads (58.82 loads of choice, 17.02 loads of select, 9.58 loads of trim and 35.73 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. It's unlikely that trade will develop on Wednesday as feedlots are gearing to push the cash cattle market higher again this week. Trade is more likely to develop sometime Thursday, if not Friday.
FEEDER CATTLE:
Tuesday's WASDE report put a damper on the corn market as the report reduced its estimated of U.S. ending corn stocks for 2020-21. The bearish news to the corn market sent the feeder cattle contracts higher as some pressure from high feed costs was relieved for the time being. March feeders closed $1.20 higher at $138.65, April feeders closed $1.70 higher at $143.17 and May feeders closed $1.50 higher at $145.07. The futures market's positive shift didn't trickle into the feeder cattle sales as sale barns continue to face freezing temperatures and wet conditions. For how dry the countryside is, no one is frustrated to see the moisture come, but the 10-day forecast of painstakingly cold temperatures does come with some challenges. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold steady to $2.00 lower and steer calves sold mostly $4.00 to $8.00 lower. Feeder heifers and heifer calves sold with unevenly steady demand. With wet conditions due to the recent storm and freezing temperatures, traveling to and from the sale was difficult and feedlots don't look forward to the stress that the change in weather is going to bring to their stock. Demand was moderate on the sale with weather being a big factor. The CME Feeder Cattle Index for Feb. 8: up $0.16, $135.63.
LEAN HOGS:
Overall, the lean hog market had another positive day with just some pressure seen in some select nearby contracts. February lean hogs closed $0.42 higher at $72.60, April lean hogs closed $0.27 lower at $80.37 and June lean hogs closed $0.30 lower at $89.77. Some of the market's pressure for the lower closing contracts of April 2021 through June 2021 could have stemmed from Tuesday's WASDE report as USDA believes that the second quarter could be the smallest yielding production quarter for the hog market. Fundamentally, the lean hog market closed exceptionally well with packers desperate enough for hogs that they willingly paid $3.48 more for hogs Tuesday afternoon, and bought upwards of 8,830 head in the cash market. Along with the positive cash news, the market was complimented once again with a stronger cutout close, which just reiterates how strong consumer demand truly is. Pork cutouts totaled 368.69 loads with 343.69 loads of pork cuts and 25.00 loads of trim. Pork cutout values: up $0.49, $85.36. Tuesday's slaughter is estimated at 494,000 head, 5,000 head more than a week ago and 2,000 head more than a year ago. Monday's hog slaughter was revised to 488,000 head. The CME Lean Hog Index Feb. 5: up $1.13, $70.40.
TUESDAY'S CASH HOG CALL: Lower. After paying nearly $3.50 more than Monday's cash prices for hogs Tuesday afternoon, packers are going to be reluctant to have to pay more for hogs two days in a row.
No comments:
Post a Comment