GENERAL COMMENTS:
Blazing into this week from the long holiday weekend, few feel like they enjoyed an extra day off given the fierce storms that blew across the countryside. Thankfully Friday's higher close in all the livestock contracts helped push more support into the market and reassure traders this bullish movement isn't over. Leaning headfirst into Tuesday's trade, for the most part the livestock contracts are defending their elevated positions and are working tirelessly to keep adding to the marketplace. Both the live cattle and feeder cattle futures have felt some minor opposition in various deferred contracts; but as the day progresses, their ability to trade higher is growing stronger. March corn is up 6 3/4 cents per bushel and March soybean meal is down $2.60. The Dow Jones Industrial Average is up 51.34 points and NASDAQ is down 7.36 points.
LIVE CATTLE:
Live cattle futures are jumping to new highs again Tuesday morning as the market gladly accepts the long positions (11,000 contracts, pushing the total net-long position to 87,000 contracts) that were added to the marketplace from Friday's CFTC report and thrives on the bullish attitude feedlots are pumping into the cash cattle market. February live cattle are up $0.45 at $117.65, April live cattle are up $1.07 at $126.25 and June live cattle are up $0.87 at $122.17. Thankfully cattlemen are looking at a positive market Tuesday morning as they faced plenty of hardship when they stepped outside and met the challenges of winter's unfriendly arrival. With large accumulations of snow, temperatures well below zero and wind that cuts through every layer of clothing imaginable -- cattlemen are making their rounds and praying this storm breaks sooner rather than later as feeding cattle isn't lucrative whatsoever when cattle are losing weight -- as many are with these conditions.
Asking prices are still unknown for the week but feedlots are anticipated to price cattle higher and should see moderate demand from packers. Seeing that last week's slaughter only totaled a slim 611,000 head -- kicking this week's production into high gear is essential. Unfortunately (for feedlots' sake) packers have a plethora of cattle already secured for this time so their interest in the cash market will be touch and go.
Last week's negotiated cash cattle sales totaled 74,422 head. Of that 70% (52,006 head) are committed for delivery in the next two weeks while the remaining 30% (22,416 head) are committed for delivery in the following 15 to 30 days.
Boxed beef prices are higher: choice up $2.10 ($234.54) and select up $0.12 ($221.53) with a movement of 33 loads (15.15 loads of choice, 4.14 loads of select, 2.97 loads of trim and 10.62 loads of ground beef).
FEEDER CATTLE:
Corn prices are making an effort to rally higher, but so far it hasn't derailed the modest momentum feeder cattle futures have mustered. March feeders are up $0.02 at $140.87, April feeders are up $0.17 at $144.90 and May feeder are down $0.12 at $146.17. Before the day's close it is not unlikely we will see feeder cattle prices dip lower as the corn market does look like it is gaining strength. It is a brutal time to be a cattle feeder as keeping cattle alive and healthy through these storms is no easy feat and isn't for the weak hearted. A lot of sale barns throughout the Midwest have canceled their sales for the early part of this week as travel is dangerous for everyone involved, including the stock coming and going.
LEAN HOGS:
Hog prices have shot higher again Tuesday morning with pork demand continuing to bolster the marketplace. April lean hogs are up $1.27 at $86.47, June lean hogs are up $0.82 at $92.72 and July lean hogs are up $0.52 at $92.37. Juggling the hog market is a tough call right now as prices are far higher than what many anticipated they'd be for this time, which makes one wonder how much more upside there is to the market. But sheer demand keeps adding fuel to the fire and is a hard fundamental to reckon with. An announcement came Tuesday morning from the Quebec-based company Olymel that they will be shutting down their pork plant in Red Deer, Alberta, for an indefinite time due to the growing problem of COVID-19 outbreaks. This news always comes as a double-edged sword as we don't want to hear of more cases of the virus, but it does give the U.S. an opportunity to potentially export more pork.
The projected lean hog index for 2/12/2021 is up $1.39 at $74.54, and the actual lean hog index for 2/11/2021 is up $0.79 at $73.15. Hog prices on the National Direct Morning Hog Report are up $2.73 with a weighted average of $69.67, ranging from $66.00 to $71.00 on 4,110 head and a five-day rolling average of $65.74. Pork cutouts total 169.21 loads with 158.79 loads of pork cuts and 10.42 loads of trim. Pork cutout values: down $0.64, $90.62.
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