GENERAL COMMENTS:
Friday's lower close and Monday's hesitant trade allowed for renewed buying throughout the livestock contracts as the market was able to correct some of its overbought position. Both lean hog and feeder cattle contracts are seeing gains of over $1.00 and live cattle futures aren't trailing far behind. March corn is down 5 cents per bushel and March soybean meal is down $2.20. The Dow Jones Industrial Average is up 576.42 points and NASDAQ is up 218.79 points.
LIVE CATTLE:
Live cattle contracts may not be seeing as strong a rally as the lean hog or feeder cattle contracts, but the day isn't relaxing by any measure. February live cattle are up $0.85 at $115.72, April live cattle are up $0.42 at $122.12 and June live cattle are up $0.47 at $118.70. The countryside is quiet with bids and asking prices still unknown and trade anticipated to wait until the later part of the week again to develop. Shortly after the noon hour the market will see its first glimpse of how packers are planning to handle this week's trade based on how the prices of the Texas Cash Pool develop. Monday's announcement of exactly how many cattle traded last week was extremely insightful as packers procured 86% of last week's purchases for two-week delivery. If they were sitting flush on their inventory, they would have been able to buy more cattle and deliver them within the 15- to 30-day delivery period. That being said, this week's cash market should be able to secure another $1.00 to $2.00 stronger.
Boxed beef prices are mixed: choice up $0.45 ($236.13) and select down $0.03 ($225.56) with a movement of 54 loads (37.11 loads of choice, 6.01 loads of select, 6.12 loads of trim and 4.82 loads of ground beef).
FEEDER CATTLE:
As corn continues to slightly struggle with its $0.05 to $0.06 regression in the nearby contracts, the feeder cattle contracts use Tuesday's trade as an opportunity to regain some positioning. March feeders are up $1.07 at $139.00, April feeders are up $1.12 at $142.20 and May feeders are up $1.22 at $144.27. The strong demand throughout the countryside has helped keep the CME Feeder Cattle Index closing higher and, if cash cattle are able to add another $1.00 to $2.00 to the market again this week, the feeder cattle market is then seeing ample support from both the technical and fundamental sides of the market.
LEAN HOGS:
Nearby contracts closed lower Monday afternoon, but lean hog contracts aren't squandering their opportunity to test long-term resistance levels Tuesday. February lean hogs are up $1.82 at $71.37, April lean hogs are up $2.35 at $77.85 and June lean hogs are up $1.40 at $88.30. Thankfully packers plan to have another swift day of processing, aiming to process around 495,000 head, which is helping keep the market working through the supplies of ready hogs. With pork cutout values continuing to see reaffirmed support, the market feels confident in trading higher and does so Tuesday morning with priority.
The projected lean hog index for 2/1/2021 is up $0.60 at $68.89 and the actual index for 1/29/2021 is up $0.88 at $68.29. Hog prices are unavailable on the National Direct Morning Hog Report due to confidentiality issues. Pork cutouts total 219.54 loads with 194.63 loads of pork cuts and 24.91 loads of trim. Pork cutout values: up $1.16, $83.82.
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