GENERAL COMMENTS:
Livestock contracts are met with some slight pressure throughout the complex. Traders aren't necessarily opposed to the livestock sector but are being more cautious as the day trades on. The cash cattle market is still quiet without any packer inquiry developing into bids. March corn is up 5 1/4 cents per bushel and March soybean meal is up $5.10. The Dow Jones Industrial Average is down 40.82 points and NASDAQ is up 49.72 points.
LIVE CATTLE:
Spot February live cattle futures and April live cattle futures are seeing some pullback from traders; but the rest of the live cattle contracts are mildly higher. Traders could be looking at the market and would like to see fundamental backing through either continued higher boxed beef prices, strong export demand or another week of high cash prices before they continue to support the nearby contracts. February live cattle are down $0.22 at $115.75, April live cattle are down $0.10 at $122.42 and June live cattle are up $0.40 at $119.20. The cash cattle market is quiet, other than what has developed through the Texas Cash Pool and the Fed Cattle exchange. Feedlots know packers are going to be opposed to seeing the cash market trade higher again this week, but the fact remains they need cattle and the market is pushing for higher prices. Asking prices in the South are $115-plus and, while the North has yet to officially state their prices, we assume their asking levels will be around $180-plus.
The Fed Cattle Exchange Auction listed a total of 1,362 head, of which 699 actually sold; 663 head went unsold, as they did not meet the reserve prices, ranging from $113.50 to $115. Opening prices ranged from $111 to $112.50, high bids ranged from $113.25 to $113.75. The state-by-state breakdown looks like this: Texas 1,186 total head, with 604 head sold at $113.75, 582 head were not sold; Oklahoma 95 total head, with all 95 head sold at $113.50; Kansas 81 total head, all of which went unsold.
Boxed beef prices are lower: choice down $1.34 ($235.42) and select down $0.98 ($224.06) with a movement of 105 loads (67.46 loads of choice, 14.32 loads of select, 16.65 loads of trim and 6.61 loads of ground beef).
FEEDER CATTLE:
Corn prices are relishing in some slight support with nearby contracts gaining $0.02 to $0.06, which has put a damper on the feeder cattle rally. March feeders are down $0.32 at $138.80, April feeders are down $0.22 at $142.02 and May feeders are down $0.30 at $144.07. The market still sits far enough away from resistance pressure that trading higher won't be an issue once traders see enough fundamental backing and that feed concerns aren't going to be any more elevated.
LEAN HOGS:
Nearby lean hog contracts are holding their own, keeping gains, while the deferred contracts are faced with slight pressure. February lean hogs are up $0.05 at $71.60, April lean hogs are up $0.70 at $78.77 and June lean hogs are up $0.47 at $88.57. The industry is sitting in a fine position as pork slaughter continues to run at a swift pace, pork cutout values are continuing to be met with strong demand and, come Thursday morning, the market expects to see strong export data again.
The projected two-day lean hog index for 2/2/2021 is up $0.28 at $69.17 and the actual index for 2/1/2021 is up $0.60 at $68.89. Hog prices are not able to be compared to Tuesday's business on the National Direct Morning Hog Report because Tuesday's business was unpublished due to confidentiality. However, the report did share that 3,604 hogs sold with a weighted average of $57.94, ranging from $53.00 to $63.50 and a five-day rolling average of $56.60. Pork cutouts total 191.96 loads with 176.11 loads of pork cuts and 15.86 loads of trim. Pork cutout values: up $0.84, $81.94.
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