Wednesday Closing Livestock Market Update - Feedlots Are Serious About Wanting More

GENERAL COMMENTS:

Wednesday presented some challenges to the livestock complex, but both the live cattle and lean hog contracts handled them beautifully. Meanwhile, the feeder cattle contracts tumbled lower as corn prices jumped $0.25 higher. Looking to Thursday's trade, the market looks primed and ready to capitalize on a stronger cash cattle front! Feedlots have passed up any and all bids as of this point and are ready to see strong advancements in the cash market in Thursday's trade. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.18 with a weighted average of $95.65 on 8,845 head. May corn is up 25 cents per bushel and May soybean meal is up $25.00. The Dow Jones Industrial Average is down 85.41 points and NASDAQ is up 201.48 points.

LIVE CATTLE:

The futures market closed higher (that's a win), the only cash cattle that sold were those on the online auction (that's a win) and boxed beef prices jumped significantly higher again Wednesday afternoon (that too is a win)! Even though corn prices shot higher, the live cattle market kept it's cool and feedlots are unwilling to squander this week's opportunity at higher cash cattle prices. The simple fact that the only cattle that have traded thus far in the week were those on the Fed Cattle Exchange is applause worthy, as feedlots are rallying together and sending strong signals to packers that steady prices aren't going to cut it this week. April live cattle closed steady at $120.97, June live cattle closed $0.67 higher at $122.90 and August live cattle closed $0.72 higher at $121.97. Wednesday's slaughter is estimated at 119,000 head, 2,000 head less than a week ago and 2,000 head more than a year ago.

The Fed Cattle Exchange Auction listed a total of 4,489 head, of which 1,160 actually sold, 3,329 head were listed as unsold, as they did not meet the reserve prices, that ranged from $116 to $120. Opening prices ranged from $115 to $118, high bids ranged from $115.50 to $118. The state by state breakdown looks like this: Kansas 110 total head, with 36 head sold at $116, 74 head went unsold; Nebraska 3,032 total head, with 951 head sold at $118, 1,943 head went unsold; Texas 1,347 total head, with 173 head sold at $116.50, 1,174 went head unsold.

Boxed beef prices are higher: choice up $2.29 ($247.12) and select up $2.21 ($238.13) with a movement of 116 loads (64.59 loads of choice, 19.16 loads of select, 16.55 loads of trim and 15.69 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: $3.00 to $4.00 higher. Feedlots have done a phenomenal job waiting the market out and pushing the bulk of this week's trade to late in the week. With boxed beef prices rallying and packers running swift chain speeds, their need for cattle is substantial and feedlots intend to move this week's market higher.

FEEDER CATTLE:

When corn prices jump limit high, the feeder cattle contracts are bound to take a beating. April feeders closed $2.95 lower at $143.87, May feeders closed $2.80 lower at $149.40 and August feeders closed $3.02 lower at $157.27. Thankfully, the live cattle market weathered the storm of Wednesday's volatile corn market well and will hopefully continue to trade higher into Thursday and Friday. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers and heifers sold $2.00 to $4.00 higher. Steer calves sold $4.00 to $8.00 higher, with the exception of those weighing 300 to 400 pounds. Heifer calves traded $5.00 to $10.00 higher. Demand was called excellent throughout the sale as buyers are realizing that grazing season is right around the corner. The CME Feeder Cattle Index for March 30: up $0.16, $139.91.

LEAN HOGS:

The lean hog contracts changed their tune Wednesday afternoon and were able to close mostly higher other than in a few of the nearby contracts that are still trading above $100.00. April lean hogs closed $0.12 higher at $101.05, June lean hogs closed $0.72 lower at $105.30 and July lean hogs closed $0.22 lower at $104.67. Heading into Thursday's trade, the lean hog market will be up early looking forward to the market's weekly export report. If the report can yield favorable news, then the market should have no trouble trading higher. If the report shows sharply lower sales, then questions about demand will be the mutter heard throughout the day, even though domestic demand continues to be unpresented. Pork cutouts totaled 306.24 loads with 251.64 loads of pork cuts and 54.60 loads of trim. Pork cutouts closed higher: up $2.08, $108.97. Wednesday's slaughter is estimated at 492,000 head, 6,000 head more than a week ago and 16,000 head more than a year ago. The CME Lean Hog Index for March 29: up $0.66, $98.04.

­­­­­THURSDAY'S CASH HOG CALL: Lower. As the market moves one day closer to the long Easter holiday, it's unlikely that packers will be overly active in the cash hog market before the three-day weekend.

Wednesday Midday Livestock Market Summary - High Corn Prices Grab Contracts' Attention

GENERAL COMMENTS:

The biggest news heading into Wednesday afternoon is hands-down the spike in corn prices and the positive developments starting to take place in the cash cattle market. Feedlots are going to be on edge this week as cost of gains continue to be problematic for their bottom line. But, as with all bits and pieces of information, having an emotional reaction to a spike in corn prices isn't healthy. Stick to your plan feedlots; high corn isn't usually a good reason to sell steady cattle. May corn is up 25 cents per bushel and May soybean meal is up $24.50. The Dow Jones Industrial Average is up 15.96 points and NASDAQ is up 249.15 points.

LIVE CATTLE:

The market has had its first glimpse of what cash cattle may be able to achieve this week, as cattle in Nebraska sold for $118 on the morning's online auction. Feedlots may feel frightened by the latest advancements in the corn futures; but stand your ground and hold true to what the week can offer you. Higher corn prices weigh heavily on feedlot margins as cost of gains creep higher but selling fat cattle at steady/cheaper prices won't help their margins either. Thankfully, the live cattle contracts aren't having a depressing day like the feeder cattle contracts are and are only trading mildly lower. April live cattle are steady at $120.97, June live cattle are down $0.30 at $121.97 and August live cattle are down $0.40 at $120.85. Bids of $184 are being offered in Nebraska but other than that the countryside is still quiet.

The Fed Cattle Exchange Auction listed a total of 4,489 head, of which 1,160 actually sold; 3,329 head were listed as unsold as they did not meet the reserve prices, which ranged from $116 to $120. Opening prices ranged from $115 to $118, high bids ranged from $115.50 to $118. The state-by-state breakdown looks like this: Kansas 110 total head, with 36 head sold at $116, 74 head went unsold; Nebraska 3,032 total head, with 951 head sold at $118, 1,943 head went unsold; Texas 1,347 total head, with 173 head sold at $116.50, 1,174 went head unsold.

Boxed beef prices are higher: choice up $0.70 ($245.53) and select up $1.63 ($237.55) with a movement of 60 loads (38.73 loads of choice, 6.52 loads of select, 5.69 loads of trim and 9.15 loads of ground beef).

FEEDER CATTLE:

Today, I'm pretty sure Johnny Cash is looking down from Heaven and is saying, "Yeah, that right there is a ring of fire boys," and then breaks out in song singing, "Feeder cattle fell down into a deep ring of fire; corn shot higher and the cost of gains keep a rollin'; and it burns, burns, burns -- the ring of fire, the ring of fire."

Goodness gracious if you were ever curious what a $0.25 rally in the corn market could do to the feeder cattle contracts, look no further, and don't look long because it's painful. April feeders are down $3.62 at $43.20, May feeders are down $4.37 at $147.77 and August feeders are down $3.42 at $156.82. With Wednesday morning's USDA Prospective Planting numbers coming out, the corn market shot higher upon finding fewer acres planted than expected. USDA said corn planted area for all purposes in 2021 is estimated at 91.14 million acres, up from 90.82 million in 2020, but less than what was anticipated.

LEAN HOGS:

The lean hog market isn't having an overly confident day as the technical pressure from the board still lingers and packers aren't pushing the cash market higher heading into the shortened holiday weekend. April lean hogs are down $0.25 at $100.67, June lean hogs are down $0.82 at $105.15 and July lean hogs are down $0.77 at $104.12. Keeping an eye on slaughter speeds will be important as Friday nears and keeping close tabs on where the day's cutout values close will also be important too as it helps monitor consumer demand. Once the Easter holiday passes, we will have a better understanding of where the market truly sits without any holiday disruptions disturbing the marketplace.

The projected two-day CME Lean Hog index for 3/29/2021 is up $0.66 at $98.04, and the actual index for 3/26/2021 is up $1.40 at $97.38. Hog prices are lower on the National Direct Morning Hog Report, down $0.37 with a weighted average of $95.73, ranging from $92.00 to $99.50 on 4,485 head and a five-day rolling average of $94.69. Pork cutouts total 186.88 loads with 151.55 loads of pork cuts and 35.32 loads of trim. Pork cutout values: up $4.54, $111.43.

Wednesday Morning Livestock Market Update - Choppy Trade May Dominate the Day

General Comments:

Live cattle futures just could not generate the same strength Tuesday as they did on Monday. It certainly was not because of lower boxed beef prices as they exploded higher. It was because of a disappointed cash trade as nothing happened. It was more technical in nature. June and later contracts could not break through to new highs. Traders may keep the market trading sideways through the rest of the week as they wait for cash, and due to it being a holiday-shortened week. The stiff premium April futures are holding to cash may keep a lid on further upside price potential in the near term, but there still is plenty of time for stronger cash to develop as packers need to purchase cattle and will need to bid up to get them. Feedlots have set their offers quite a bit higher at $118 to $120 in the South and $192 in the North. Dressed cattle weights have been sliding a bit with last week's weights $4.00 below the previous week and 42 pounds below a year ago. It will take more cattle to satisfy demand.

Hog futures performed very well Tuesday with June and July contracts making new highs. So far, it has been a good week, technically. Futures contracts closed the chart gaps on Monday and then pushed higher Tuesday. Lower cutouts and cash Tuesday did not deter the bullishness of traders and positive fundamentals of the market. Packers may hold back the rest of the week to get a good handle on supply and demand after the holiday. However, tightening supplies are a concern and may continue to push prices higher after some stability this week. Hog slaughter last week was down 8.2% from a year ago with pork production down 7.2% from a year ago. Second quarter supplies are expected to tighten and possibly be the tightest of the year.

	BULL SIDE		BEAR SIDE
1)	Cutouts exploded higher Tuesday indicating continued strong demand. Packers will aggressively look to obtain cattle to meet the demand.	1)	Cattle futures could not push higher even though boxed beef jumped and cash looks to trade higher. Higher prices may already be factored in.
2)	Feedlots are asking higher prices feeling confident they will get them. Spring demand may be stronger than expected.	2)	Futures hold a large premium to cash and may hold until cash catches up, reducing the premium.
3)	June and July hog contracts made new highs after closing chart gaps. This makes for a strong market, technically.	3)	Packers may hold back now that cutouts gains have slowed recently. Holiday demand is finished, and packers may wait to see demand strength over the next week.
4)	Even if futures drift sideways for the rest of the week, there is strong underlying support.	4)	Some profit-taking may unfold Wednesday due to it being the end of the month and end of the quarter.

Tuesday Closing Livestock Market Update - Mixed Trade For The Sector

GENERAL COMMENTS:

It was a mixed day for the livestock sector as the contracts bounced back and forth trying to decide where to trade comfortably. Looking to Wednesday's trade, the cash cattle market could see some bids start to surface, but hopefully feedlots will deflect the early offers and push trade out until later in the week when packers usually offer more money to secure cattle. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.54 with a weighted average of $95.83 on 9,044 head. May corn is down 7 1/2 cents per bushel and May soybean meal is up $0.10. The Dow Jones Industrial Average is down 104.41 points and NASDAQ is down 14.26 points.

LIVE CATTLE:

It looks like the weight of this week's market is going to fall solely onto the backs of feedlots. Asking prices in the South have been marked at $118 to $120 and asking prices in the North have been noted at $192 plus. Bids were obsolete Tuesday and it's likely that trade doesn't develop until the later part of Wednesday or even better yet, Thursday or Friday. The Texas Cash Pool successfully sold 914 head at $116.11. Bids from other packers came in at $114.98, $115.00 and $116.05. April live cattle closed steady at $120.97, June live cattle closed $0.42 lower at $122.22 and August live cattle closed $0.22 lower at $121.25. Tuesday's slaughter is estimated at 120,000 head, 3,000 head more than a week ago and 1,000 head more than a year ago.

Boxed beef prices closed higher: choice up $5.30 ($244.83) and select up $3.42 ($235.92) with a movement of 149 loads (77.69 loads of choice, 19.82 loads of select, 29.28 loads of trim and 22.47 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Higher. Feedlots have had a brutal year since COVID-19's first debut, and it's about time that the market makes a recovery from the hardship endured. With boxed beef prices making phenomenal gains daily, feedlots hold a trump card in this week's cash cattle market and should push for at least $2.00 to $4.00 higher. Reaching $120 this week shouldn't be out of the question.

FEEDER CATTLE:

The spot April contract and the nearby May contract closed steady to somewhat lower. April feeders closed $0.25 lower at $146.82, May feeders closed steady at $152.20 and August feeders closed $0.30 higher at $160.30. If you look at the market's demand and the core fundamental drivers -- boxed beef prices, the positive momentum surrounding the cash cattle market and the obvious buying mentality at sale barns this week -- the feeder cattle contracts stand every chance at trading higher if the live cattle market will show some grit and enthusiasm. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold $1.00 to $3.00 higher, expect those weighing 800 to 850 pounds which sold steady. Stock steers sold up to $10.00 higher and steer calves traded $3.00 to $7.00 higher. Heifer calves over 500 pounds sold steady to $1.00 higher, and heifers under 500 pounds sold $4.00 to $10.00 higher. Demand was strong throughout the day's sale. The CME Feeder Cattle Index for March 29: up $0.89, $139.75.

LEAN HOGS:

Just when the lean hog market finally got traders talked into trading higher, both cutout values and cash hog prices closed lower. Before this sends alarming chills down your spine, we must remember that the fundamental nature of the market must be looked at through both a short- and long-term perspective. There's no denying that at some point the market will find a top, but maybe the bigger question should be what will the market do once it finds that top? Will it come crashing lower, or will it trade mixed to sideways for weeks, potentially even months on end if demand can still be a supportive factor? Given that the market is faced with tightening supplies and that demand is unbelievably strong, I tend to think that the back and forth nature of steady to somewhat lower will be the likely outcome.

Tuesday's movement of pork products was lofty as the day's cutouts totaled 401.59 loads. With cold storage supplies being lower, retailers are interested in getting their hands on any supply that's readily available. April lean hogs closed $0.55 higher at $100.92, June lean hogs closed $0.80 higher at $106.02 and July lean hogs closed $0.80 higher at $104.90. Pork cutouts totaled 401.59 loads with 370.49 loads of pork cuts and 31.09 loads of trim. Pork cutout values: down $0.95, $106.89. Tuesday's slaughter is estimated at 490,000 head, 25,000 head more than a week ago and 1,000 head less than a year ago. Monday's hog slaughter was revised to 483,000 head. The CME Lean Hog Index for March 26: up $1.41, $97.38.

WEDNESDAY'S CASH HOG CALL: Steady. Prices may have dipped slightly lower Tuesday, but packers are still buying quite a few hogs in the cash hog market in order to secure necessary supplies.

Tuesday Midday Dairy Market Summary - Cheese Steadies as Butter Continues Gains

Spot cheese closed quickly with the lack of trading interest Tuesday. Block cheese price remained at $1.7475 with no trades. Barrel cheese price was unchanged at $1.48 with no loads traded. Butter price climbed 3 cents to move to $1.8225 with 3 loads traded. Butter is trading just below the most recent high of $1.8325 from June 22, 2020. Grade A nonfat dry milk price increased by 0.50 cent for the second consecutive day, closing at $1.18 with no loads traded. Dry whey price climbed 0.25 cent to end at $0.63 with one load traded. Dry whey continues to push the spot price to new record highs. Class III futures are mixed, but most contract months are currently unchanged with no trading so far Tuesday. Contracts are 5 cents lower to 10 cents higher. Class IV futures are seeing stronger gains from June through November of this year, between 4 cents to 22 cents higher. Class IV front months have not traded yet. Butter futures are 2.78 cents lower to 3.43 cents higher. Dry whey futures are 0.50 cent lower to 0.97 higher.

Tuesday Midday Livestock Market Summary - Technicals Leery of Trading Higher

GENERAL COMMENTS:

Both the live cattle and lean hog futures have had a back-and-forth day as traders are worried about jumping into the complex without firm fundamental support. Thankfully the market's fundamentals (boxed beef prices, cash prices and slaughter speed) all push towards stronger trade given that demand is so strong. May corn is down 8 3/4 cents per bushel and May soybean meal is down $0.50. The Dow Jones Industrial Average is down 138.31 points and NASDAQ is down 35.25 points.

LIVE CATTLE:

Live cattle futures have had an indecisive morning as the contracts danced around both sides of steady. As the noon hour approaches, the contracts are seeing a little more support develop from traders but are going to rely heavily this week on the cash cattle market and the fundamental environment of the marketplace to push trade higher. April live cattle are up $0.30 at $121.30, June live cattle are down $0.05 at $122.60 and August live cattle are up $0.10 at $121.57. The countryside is still quiet without any bids developing but asking prices in the South have been noted at $118 to $120; in the North at $192. Feedlots are ready to move this market substantially higher and are prepared to wait until later in the week to trade cattle if need be to get the prices they desire.

Boxed beef prices are higher: choice up $4.76 ($244.29) and select up $3.49 ($235.99) with a movement of 88 loads (45.43 loads of choice, 12.27 loads of select, 9.94 loads of trim and 19.93 loads of ground beef).

FEEDER CATTLE:

Sure, the live cattle futures may be trading lower, but the feeder cattle contracts couldn't care less at the moment as corn prices are giving the market a wide opportunity to trade higher. With cost of gains being one of the biggest limiting factors in recent months to the feeding industry, the feeder cattle contracts see Tuesday's lower grain trade as a chance to move their market higher and believe the momentum in the cash cattle market could rejuvenate the live cattle contracts later in the week. April feeders are up $0.40 at $147.47, May feeders are up $0.82 at $153.02 and August feeders are up $0.62 at $160.62.

LEAN HOGS:

Lean hog futures are fighting against tough technical pressures right now. Despite how crazy it may seem, the market's cash trade and pork cutout values should encourage higher trade on the board; but traders are leery. Some nearby contracts are able to trade higher, but for the most part the spot April contract and the deferred contracts are all trading lower. April lean hogs are down $0.07 at $100.30, June lean hogs are up $0.65 at $105.87 and July lean hogs are up $0.60 at $104.65. In order for traders to jump on board with the higher trade, they may just need to see support carry through Tuesday's close and may positionally trade higher Wednesday, even though the market is fighting tough resistance pressure.

The projected CME Lean Hog index for 3/29/2021 is up $0.66 at $98.04 and the actual index for 3/26/2021 is up $1.40 at $97.38. Hog prices are higher on the National Direct Morning Hog Report, up $2.11 with a weighted average of $96.10, ranging from $93.95 to $100.00 on 4,945 head and a five-day rolling average of $93.08. Pork cutouts total 238.96 loads with 221.28 loads of pork cuts and 17.69 loads of trim. Pork cutout values: up $0.63, $108.47.

Tuesday Morning Livestock Market Update - Mixed Activity Expected

General Comments:

June and August live cattle futures pushed to new highs Monday as traders believe higher cash is on the way for this week. It will be interesting to see how early cash cattle will trade due to it being a holiday-shortened week. It will also be interesting to see how traders will react as the first quarter ends on Wednesday. Many times, funds may lighten up on positions in order to make the books look better for the quarter. However, with higher cash and strong boxed beef prices looking to dominate the week, they may see no need to take profits and then have to buy back in again. It seems like the trend has turned higher now that new highs have been established. The Commitment of Traders for the week ended March 23 showed funds net sellers of 4,005 futures contracts. This did trim net-long positions held by funds to 79,555 contracts. This will likely turn higher again on next week's report due to what took place in the market last week.

Hog futures were bound to close the price gaps left on the charts on Friday. They did it in one massive swoop Monday with futures falling nearly $2.00 in some contracts before the selling pressure subsided and futures were able to recover quite a bit of their losses. Cash was a little higher and cutouts gained further ground. That does not paint a bearish picture for the week. However, it is the end of the quarter and could follow a pattern of funds lightening up on long positions to make the books look better. The Commitment of Traders report did not show any fear of a sustained price decline as funds added 262 net-long positions, bringing their total net-long positions to 76,095.

	BULL SIDE		BEAR SIDE
1)	June and August live cattle futures established new contracts highs without difficulty. Other contracts may follow the lead as fundamentals are supportive.	1)	It is the end of the first quarter with funds potentially taking some profits for the end of the quarter and prior to the three-day weekend.
2)	The trend turning higher may give confidence to traders to step back into the market in anticipation of further gains.	2)	Cash may trade earlier in the week than desired due to the upcoming holiday weekend. This may limit the increase of cash gains.
3)	Hog futures came back quite a bit from their lows, possibly indicating selling pressure has run its course, with traders taking advantage of the dip to buy into the market.	3)	Hog futures declining in the face of strong fundamentals might indicate the market is too high and has a lot of the bullishness already factored in.
4)	Strong fundamentals remain in the market, providing solid support.	4)	Weakness of futures Monday might result in traders holding back, waiting to get a better idea of direction this week.

Monday Closing Livestock Market Update - Cattle Climb Higher

GENERAL COMMENTS:

Monday's trade was nearly a mirror image of the trade that developed throughout the livestock complex last Monday. Livestock enthusiasts are hopeful that the rest of the week can be as fruitful as last week was as well. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.43 with a weighted average of $96.37 on 7,869 head. May corn is down 5 3/4 cents per bushel and May soybean meal is down $5.90. The Dow Jones Industrial Average is up 98.49 points and NASDAQ is down 79.07 points.

LIVE CATTLE:

The live cattle contracts seem energized and ready to higher again this week. April live cattle closed $0.87 higher at $120.97, June live cattle closed $0.87 higher at $122.65 and August live cattle closed $0.60 higher at $121.47. It's comforting to see both boxed beef prices higher in Monday's close and to see Monday's slaughter pace chewing off a brisk movement as the cash cattle market needs to see higher trade again this week. The market's strong fundamentals make it a tough case for packers not to pay for more cattle, especially when they're being met with excellent beef prices. Monday's cash cattle trade was thankfully quiet as most Monday's are, but feedlots will have a hard time pushing packers to wait until later in the week to trade cattle as it's a shortened holiday week. Packers will most likely want to come in and get their business done early in the week, but in order for feedlots to see the market's strongest price point, waiting until later in the week usually serves them better. Monday's slaughter is estimated at 119,000 head, 3,000 head more than a week ago and steady with a year ago. Saturday's cattle slaughter was revised to 59,000 head, pushing the week's total to 649,000 head.

Last week's cash cattle trade totaled 99,682 head. Of that 64,241 head are committed for delivery in the next two weeks, while the remaining 35,441 head are scheduled for delivery in the following 15 to 30 days.

Boxed beef prices closed higher: choice up $1.87 ($239.53) and select up $4.73 ($232.50) with a movement of 96 loads (52.49 loads of choice, 13.63 loads of select, 16.58 loads of trim and 12.90 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: $2.00 to $3.00 higher. Hopefully there's no cash cattle that trade as early as Tuesday, but if there is, they will hopefully be $2.00 to $3.00 higher. With boxed beef prices wanting to rally, feedlots have a great opportunity to jolt the cash cattle market higher soon. Getting the cash cattle market to $120 as quick as possible needs to be a short-term goal for the feedlot sector.

FEEDER CATTLE:

The feeder cattle contracts kept rolling right through Monday's trade, not worried about a thing other than securing higher profits while the opportunity lasts. April feeder cattle closed $1.95 higher at $147.07, May feeders closed $2.32 higher at $152.20 and August feeders closed $1.55 higher at $160.00. Thankfully, both the corn market and live cattle market encouraged the feeder cattle contracts to trade higher, and so long as corn prices can keep trading steady to somewhat lower, and live cattle can continue to spur on the positive momentum fueling the cattle market, the market stands a chance at trading higher again this week. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, at the midsession Monday, feeder steers and heifers were both cattle $3.00 to $7.00 higher. The CME Feeder Cattle Index for March 26: up $2.10, $138.85.

LEAN HOGS:

Based on how strong Monday's market fundamentals closed, the lean hog complex may be headed for higher trade come Tuesday. Just like last Monday, the lean hog contracts traded timidly throughout Monday, seeming to want to get a better understanding of what this week's fundamental environment was going to be before moving the complex higher yet again. But with a strong slaughter pace, and higher closes in both the cutout and cash markets, traders could be enticed to trading higher come Tuesday morning. April lean hogs closed $0.42 lower at $100.37, June lean hogs closed $0.37 lower at $105.22 and July lean hogs closed $0.52 lower at $104.10. Pork cutouts totaled 305.43 loads with 279.54 loads of pork cuts and 25.89 loads of trim. Pork cutout values: up $0.31, $107.84. Monday's hog slaughter is estimated at 492,000 head, 11,000 head more than a week ago and 3,000 head less than a year ago. Friday's hog slaughter was revised to 480,000 head, which with Saturday's kill moves the week's total to 2,544,000 head. The CME Lean Hog Index for March 25: up $1.38, $95.97.

­­­­­TUESDAY'S CASH HOG CALL: Steady to somewhat higher. Seeing that it's a shortened week, packers could be very active in the cash cattle market early this week as they procure last minute deals to ensure supply.

Monday Midday Livestock Market Summary - Shooting for Another Dynamite Week

GENERAL COMMENTS:

Monday's trade is seeming to jump into this week just like it did last week as cattle are higher; corn and hogs are both lower. If this week's trade can pan out to be as strong as last week's market, it will be a stellar accomplishment as last week's trade substantially helped the entire livestock sector. May corn is down 7 3/4 cents per bushel and May soybean meal is down $5.20. The Dow Jones Industrial Average is down 9.37 points and NASDAQ is down 117.53 points.

LIVE CATTLE:

Last week's live cattle/fat cattle market was exactly what the doctor called for! Seeing that packers committed 64% of last week's procured cattle for delivery in the next two weeks tells me they need cattle and will most likely be willing to pay more if boxed beef prices keep trending higher. April live cattle are up $0.60 at $120.67, June live cattle are up $0.72 at $122.50 and August live cattle are up $0.50 at $121.40. If the board can keep trading higher throughout the week there's no reason why the cash cattle market can't jump another $2.00 to $3.00 higher this week. Showlists are mixed as Texas is somewhat lower, Kansas is steady, and Nebraska and Colorado are higher.

Last week's cash cattle trade totaled 99,682 head. Of that 64,241 head are committed for delivery in the next two weeks, while the remaining 35,441 head are scheduled for delivery in the following 15 to 30 days.

Boxed beef prices are higher: choice up $1.70 ($239.36) and select up $2.96 ($230.73) with a movement of 44 loads (24.70 loads of choice, 5.54 loads of select, 7.90 loads of rim and 5.73 loads of ground beef).

FEEDER CATTLE:

It's been a dynamite Monday morning for the feeder cattle contracts as the live cattle market is encouraging higher trade and the corn market is veering lower, which is allowing feeders to confidently trade higher. April feeders are up $2.25 at $147.37, May feeders are up $2.82 at $152.70 and August feeders are up $1.55 at $159.97. The countryside is itching for green grass to grow and for spring to show its colors. Thankfully buyers jumped at the opportunity to buy calves last week. With every week that passes backgrounders are that much closer to grass, which is most likely going to fuel their buying, especially if the countryside can get some much-needed moisture.

LEAN HOGS:

It's looking like this week's Monday is another rerun of last week's. Before traders extend themselves and throw their money behind the contracts, they want to see if the market's fundamentals are going to support higher trade once again. April lean hogs are down $0.40 at $100.40, June lean hogs are down $0.15 at $105.45 and July lean hogs are down $0.22 at $104.42. Given just how strong last week's Hogs and Pigs Report was, continued support should find its way into the market. But, but playing the devil's advocate here, the market will ring in a top at some point. As we've been saying for weeks on end now, the market could keep trading higher if fundamentals encourage it, but given the shortened holiday week with no trade on Friday there is the chance of some volatility creeping into the complex.

The projected lean hog index for 3/26/2021 is up $1.40 at $97.38, and the actual CME Lean Hog Index for 3/25/2021 is up $1.38 at $95.97. Hog prices are lower on the National Direct Morning Hog Report, down $0.57 with a weighted average of $93.99, ranging from $93.00 to $99.00 on 4,198 head with a five-day rolling average of $91.92. Pork cutouts total 146.94 loads with 127.35 loads of pork cuts and 19.59 loads of trim. Pork cutout values: up $3.95, $111.48.

Monday Morning Livestock Market Update - Optimism Remains Strong

General Comments:

Last week's trade set the stage for this week's trend. Live cattle futures still need to prove themselves by making new highs. Last week was a strong week with further strength expected supported by strong cash. Packers payed higher prices for cattle with less resistance than anticipated. That is a good sign for this week as higher prices will be needed to obtain more supply. Box beef prices average $7.00 higher for the week, indicating strong demand. The seasonal delay of a spring price rally is being made up for rather quickly. Demand factors are strong and further advances of boxed beef should support a strong rally in the cash market. Year-to-date beef export sales have reached 422,485 metric tons and is the highest on record for this time of year. Last year at this time the total was 337,281 metric tons.

Hog futures made new contract highs throughout 2021 contracts again of Friday. This has been nearly a daily occurrence. April through August contracts closed solidly above $100 with traders setting their sights on yet higher prices. April through August also left price gaps, which will be filled at some point. A price retracement will be needed to close those gaps and will likely take place before the end of the week. Packers remained aggressive last week, and there is no reason they will slow down this week. Projections for tighter supply and then confirmation of that tighter supply on the Hogs and Pigs report, will keep packers active. They cannot afford to step back as strong demand needs to be met. Year-to-date exports sales reached 779,498 metric tons, slightly higher than last year, but a new record high for the period.

	BULL SIDE		BEAR SIDE
1)	Strong boxed beef prices mean packers will need to be more aggressive to fill demand.	1)	Cattle futures have yet to break through and establish new contract highs. Those levels might be tough to exceed.
2)	Bullish traders have bought the break and added to their long positions in anticipation prices will move higher.	2)	The strong futures premium to cash may be a bit too much and may not hold over the next month.
3)	There has been a buying frenzy for hogs and that does not appear to be slowing down anytime soon. There is a fear of tighter supply.	3)	The price gap left in futures on Friday may be closed sooner rather than later. The market might correct further as it is overbought -- again.
4)	Futures remain in a solid uptrend with no sign of technical resistance. There is also no sign of price resistance either as consumer demand remains robust.	4)	It is a holiday-shortened week with increased demand for Easter being fulfilled. Traders may want to take some profits due to the end of the month, end of the quarter, and a long weekend.

Friday Midday Livestock Market Summary - Contracts Keep Grinding Higher

GENERAL COMMENTS:

There's some slight hesitancy in both the deferred live cattle and feeder cattle contracts, but their nearby contracts are higher and the lean hog complex is on could nine. Unless traders bail completely out of the cattle contracts before the day's end, it's looking like the market may be able to pull off a higher close and round out the week with a stellar rally. May corn is up 2 3/4 cents per bushel and May soybean meal is up $0.10. The Dow Jones Industrial Average is up 160.65 points and NASDAQ is up 55.49 points.

LIVE CATTLE:

Live cattle futures are keeping the upward progression in their nearby contracts, but some of the deferred contracts are simply steady. April live cattle are up $0.52 at $120.07. June live cattle are up $0.37 at $121.45 and August live cattle are up $0.22 at $120.60. The cash cattle market is quiet without any bids having been renewed at this point. There may be a few head trade before the day's close, but for the most part this week's business is wrapped up. Southern live cattle have been marked this week at mostly $115, with some sales of $116, which is $1.00 to $2.00 higher than last week. Northern dressed cattle have traded mostly at $184 to $185, which is $3.00 to $4.00 higher than last week's business. With boxed beef prices starting to warm up to the essence of spring, feedlots need to remember there's more market to be had -- they just need to be patient and milk their desired prices out of packers. Both this week and last week proved higher prices are usually seen in the later part of the week versus the earlier part of the week.

Boxed beef prices are higher: choice up $1.95 ($238.40) and select up $2.84 ($229.09) with a movement of 60 loads (37.22 loads of choice, 4.87 loads of select, 11.09 loads of trim and 7.21 loads of ground beef).

FEEDER CATTLE:

As the corn contracts post a slight rally, the feeder cattle contracts are seeing some modest hesitation grow throughout the complex. April feeders are up $0.55 at $144.77, May feeders are up $0.22 at $149.35 and August feeders are down $0.15 at $157.97. The market's regression could be a ripple effect from the corn prices, but they could also be trading lower as traders realize the stark advancements the contracts have made over the last week and don't want to over extend the market before heading into the weekend. It's not unlikely that, if the momentum in the cash cattle market can continue into next week's trade (which is very likely), the feeder cattle contracts will be back to their higher quest.

LEAN HOGS:

That's it. That does it. I'm a believer. Pigs must honestly be able to fly! Look at this lean hog complex, it's nearly unbelievable. From the April 2021 through the July 2021 contract, all the contracts are trading above $100.00. Whether you wanted to tout before Thursday's Quarterly Hogs and Pigs Report that the rally was due to short supplies or just exponential demand, the point moving forward is that both are true, and supplies are expected to lessen even more. April lean hogs are up $1.15 at $100.82, June lean hogs are up $1.95 at $105.27 and July lean hogs are up $1.55 at $104.22.

The projected CME lean hog index for 3/25/2021 is up $1.38 at $95.97 and the actual index for 3/24/2021 is up $0.74 at $94.59. Hog prices are higher on the National Direct Morning Hog Report, up $1.14 with a weighted average of $94.56, ranging from $91.75 to $100.00 on 4,600 head and a five-day rolling average of $90.76. Pork cutouts total 173.74 loads with 156.10 loads of pork cuts and 17.64 loads of trim. Pork cutout values: up $2.29, $111.53.

Friday Morning Livestock Market Update - Further Strength Expected in Futures

General Comments:

Cattle futures pushed higher Thursday as it attempts to regain the losses of last week. A few days ago, it looked like regaining those losses would be a tall order to fill, but now that might be accomplished in the next day or so. Cash trade Thursday increased from what it was Wednesday showing that packers need cattle and they are now ready to purchase it aggressively. This sets the stage for next week as feedlots feel they may be in the driver's seat and will be able to hold out for more. Higher boxed beef prices and strong demand indicates the seasonal spring rally is under way. There is one area of the market that remains a concern and that is slower exports. Sales of beef were down 27% from the previous week and 3% from the four-week average on the latest report. This keeps more in the domestic market that needs to be absorbed. However, that does not seem to pose any problem at the present time.

There are always some hog futures contracts that make new highs each day and Thursday was no exception. It was almost as if traders did not care about what the Hogs and Pigs report would show. They are bullish and continue to buy futures aggressively. Of course, a strong trend always keeps traders active with the direction of the trend, but this is supported by strong fundamentals. Packers continue to bid higher as they sense tighter supplies down the road. The release of the bullish Hogs and Pigs report may make then a lot more nervous and aggressive. Export sales were down slightly from the previous week and down 2% from the four-week average but maintained a strong pace. There is a word of caution here. The old saying is "buy the rumor, sell the fact." There is a chance futures could see some selling pressure as traders may try so scalp some money from the market by running over the late comers buying into the market. If this takes place, it may only be for a short period of time. Saturday's hog slaughter is estimated at 143,000 head.

	BULL SIDE		BEAR SIDE
1)	Strong cash cattle and higher boxed beef makes for a bullish combination.	1)	Lagging exports could be an anchor on the market as more product needs to be absorbed by the domestic market.
2)	Futures are within striking distance of regaining last week's losses and establishing new contract highs.	2)	Cattle futures continue to carry a strong premium. Futures may hold or retrace in order to remain closer to cash.
3)	The uptrend in hogs seems to be gaining momentum as there has been no price resistance in the country.	3)	One has to wonder how much of the report has already been factored into the market. It could be a "buy the rumor, sell the fact" day.
4)	The Hogs and Pigs report was bullish, indicating tighter numbers than anticipated. Packers need to remain aggressive.	4)	Packers may have had enough for the week and may hold off and regroup in preparation of next week. They will need to assess how aggressive they need to be or if they need to be.

Thursday Closing Livestock Market Update - Adding More Jet Fuel to the Hog Rally

GENERAL COMMENTS:

Thursday's market was nothing short of wild as the futures closed higher, both the cash hog and cash cattle markets sought after steady to higher trade and the big daddy of the all, Thursday's Quarterly Hogs and Pigs report, defines the utter essence of bullish. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.94 with a weighted average of $94.12 on 8,055 head. May corn is down 6 3/4 cents per bushel and May soybean meal is up $3.60. The Dow Jones Industrial Average is up 199.42 points and NASDAQ is up 15.79 points.

LIVE CATTLE:

The cash cattle market saw some clean-up trade develop in the North for $116, which is steady to $1.00 higher than Wednesday's business. The cattle contracts have had a great week breaking out of the depressing sideways trade that was chaining the market to steady, if not lower trade and robbing the market of all hope as feedlots desperately need a spring rally. Thankfully, this week's bump in boxed beef prices has helped move the cash cattle market higher and the support from the futures contracts has been greatly appreciated. There's still lots of time to pass before the April contract closes, but hopefully the cash market does more of the converging than the April contract does and cash cattle prices can get close to $120. April live cattle closed $0.42 higher at $119.55, June live cattle closed $0.77 higher at $121.07 and August live cattle closed $0.62 higher at $120.37. Thursday's slaughter is estimated at 121,000 head, 10,000 head more than a week ago and 4,000 head less than a year ago.

Thursday's actual slaughter data for the week ending March 13 shared mixed news for beef carcass weights. Steers averaged 904 pounds, which is 4 pounds more than the previous week and heifers lost 1 pound from the week before to average 832 pounds.

Boxed beef prices closed higher: choice up $1.61 ($236.45) and select up $2.18 ($226.25) with a movement of 102 loads (64.40 loads of choice, 12.75 loads of select, 10.55 loads of trim and 14.22 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Seeing that there's been trade in both the North and the South, Friday's trade will most likely be clean-up in nature and steady with the week's already determined prices.

FEEDER CATTLE:

The feeder cattle contracts kept on trading higher throughout Thursday's trade as the market merely begged for the complex to trade higher as corn prices were lower, live cattle prices closed higher and cash cattle trade continues to look for higher bids. April feeders closed $1.77 higher at $144.22, May feeders closed $1.80 higher at $149.12 and August feeders closed $1.25 higher at $158.12. At Torrington Livestock Auction in Torrington, Wyoming, compared to two weeks ago, steers and heifers under 700 pounds sold $8.00 to $10.00 higher. Feeder cattle over 700 pounds traded steady. The moisture that the area has been able to accumulate over the last week made buyers more optimistic and there was great buyer interest from both the live auction and the internet. The CME Feeder Catle Index for March 24: up $0.58, $135.62.

LEAN HOGS:

Drum roll, please! Just when you think that you've got the markets figured out, they have a peculiar way of humbling one quickly. Thursday's trade was another day of bullish hype as cash hog prices jumped higher again and Quarterly Hogs and Pigs report came out far more bullish than anyone anticipated. A long, perplexing story told short: hog supplies are current and are looking to tighten in the near future and pork demand continues to be sought with stellar demand. Thursday's lean hog contracts were all able to close higher and with the quarterly report as favorable as it was, Friday's trade will most likely be higher yet again. April lean hogs closed $1.90 higher at $99.67, June lean hogs closed $1.27 higher at $103.32 and July lean hogs closed $1.15 higher at $102.67. Pork cutouts total 299.44 loads with 266.18 loads of pork cuts and 33.26 loads of trim. Pork cutout values: down $1.23, $109.24. Thursday's slaughter is estimated at 490,000 head, 2,000 head less than a week ago and 11,000 head less than a year ago. Wednesday's hog slaughter was revised to 486,000 head. The CME Lean Hog Index for March 23: $0.38, $93.85.

Thursday's slaughter data shared steady eddy news for hog producers as pork carcass weights are unchanging from the previous week. For the week ending March 13, live carcasses averaged 291 pounds and dressed carcasses averaged 217 pounds, both unchanged from the previous report.

­­­­­FRIDAY'S CASH HOG CALL: Steady to somewhat higher. Seeing how bullish the quarterly report was, Friday's market could be higher again as the market rallies off exciting news and packers grit their teeth as supplies tighten.

Thursday Midday Livestock Market Summary - Futures Higher Yet Again

GENERAL COMMENTS:

It's been a great week for both the lean hog and cattle contracts as trader support has been superb and the market's fundamentals keep encouraging higher trade as demand for both pork and beef proteins remains strong. May corn is down 4 1/2 cents per bushel and May soybean meal is up $2.70. The Dow Jones Industrial Average is up 3.10 points and NASDAQ is down 12.94 points.

LIVE CATTLE:

It's another day of modestly procuring gains in the futures market, while the cash cattle market sees modest interest develop. With boxed beef prices climbing higher and higher, the market stands firm, growing in confidence. A few cattle have traded in Nebraska and Colorado for $116, which is steady to $1.00 higher than Wednesday's trade; bids of $185 are still being offered in Nebraska. Seeing beef demand as robust as it is, packers will most likely continue to scout the countryside through the afternoon, procuring some cattle though it looks like the bulk of the week's trade is essentially complete. April live cattle are up $0.57 at $119.70, June live cattle are up $1.17 at $121.45 and August live cattle are up $0.90 at $120.65.

Beef net sales of 18,900 metric tons (mt) reported for 2021 were down 27% from the previous week and 3% from the prior 4-week average. The three largest buyers were Japan (5,800 mt), South Korea (4,400 mt) and China (3,600 mt).

Boxed beef prices are higher: choice up $1.32 ($236.16) and select up $2.64 ($226.71) with a movement of 59 loads (33.90 loads of choice, 8.70 loads of select, 6.80 loads of trim and 9.20 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts are more than happy to break out into Thursday's trade fully higher as the corn market is posting another slight regression and the live cattle market is accompanying the feeder cattle contracts in a higher quest. April feeders are up $1.17 at $143.62, May feeders are up $1.57 at $148.90 and August feeders are up $0.77 at $157.65. The last week has been instrumental in helping the feeder cattle contracts navigate the market's waters to higher ground as before the complex was depressed given the lack of hope that was extended from stagnant cash cattle prices. When feedlots see steady fat cattle prices for weeks on end and rallying corn prices there's very little incentive for feeder buyers to want to jump into more calves. Thankfully this week's market has started building some optimism back into the market and things are starting to show opportunity though the market still needs to secure significant positioning.

LEAN HOGS:

Upon seeing China being relatively aggressive in Thursday's export report, and cash hog prices higher along with continued strength in the pork cutout value -- the environment surrounding the lean hog complex continues to be strong. April lean hogs are up $1.22 at $99.00, June lean hogs are up $0.95 at $103.00 and July lean hogs are up $0.85 at $102.37. Now that the market has Thursday's export report fully absorbed into the day's trade, the next hurdle to jump will be the afternoon's Quarterly Hogs and Pigs Report.

Pork net sales of 38,700 mt reported for 2021 were down 3% from the previous week and 2% from the prior four-week average. The three largest buyers were Mexico (17,300 mt), China (10,500 mt) and Japan (3,000 mt).

The projected CME Lean Hog Index for 3/24/2021 is up $0.74 at $94.59, and the actual index for 3/23/2021 is up $0.38 at $93.85. Hog prices are higher on the National Direct Morning Hog Report, up $4.23 with a weighted average of $93.42, ranging from $90.00 to $99.00 on 6,445 head and a five-day rolling average of $89.19. Pork cutouts total 131.89 loads with 114.29 loads of pork cuts and 17.59 loads of trim. Pork cutout values: up $3.41, $113.88.

Thursday Morning Livestock Market Update - Quarterly Hogs and Pigs Report Today

General Comments:

It was a bit disappointing to see April cattle futures closing unchanged. The April contract has been in a sideways range since the beginning of the month. Traders are holding out hopes for cash to achieve the $118 or $119 level, but cash has not been able to accomplish that yet. However, there is another month for cash to be able to achieve that level or higher. Higher cash Wednesday was certainly welcomed by feedlots with hopes of that continuing. The seasonal spring rally will need to be supported by good exports and strong cash prices. USDA will release the weekly Export Sales report Thursday morning and that will be part of what is needed to achieve higher prices. Futures still have quite a way to go to regain what was lost last week, but the attitude has turned more bullish now that packers have shown they need cattle and are willing to pay up for them.

Even though the trend is up and April and May hog futures made new highs Wednesday, traders may be apprehensive of the upcoming Hogs and Pigs report Thursday afternoon. This may keep price volatility subdued with most traders likely feeling confident, holding long positions. The average trade estimate for all hogs and pigs is 100.1% of last year. Kept for breeding is 98.7% and kept for marketing at 100.2%. Again, a lot of near-term trading will depend on where the actual numbers fall in relation to these estimates. Strong cutouts indicate this market may not be impacted much even if the report is slightly bearish as demand is not letting up. Exports sales will likely be positive Thursday as international demand remains strong. Saturday slaughter is projected at 143,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle have finally moved the cash needle to the upside. The seasonal demand may be magnified by increasing demand from restaurants.	1)	Nearby cattle futures were unable to push much higher Wednesday even though cash prices increased. Futures may wait to see of cash will catch up.
2)	Traders may be more confident to add to long positions now that packers are more aggressive, improving support under the market.	2)	Any weakness of export sales and cash prices may stall as the market will balance supply with demand.
3)	Hog futures continue to perform well through July. Traders give the impression they believe the Hogs and Pigs report will be friendly.	3)	Negative numbers on the Hogs and Pigs report Thursday afternoon could top the market setting a level of price resistance.
4)	Strong cutouts indicate there is no slowing down of demand. Higher prices are yet to come.	4)	June and later futures contracts have not been able to move back to new highs. The market may be running out of steam in anticipation of some demand destruction over time.

Wednesday Closing Livestock Market Update - Higher Sights in Mind for the Complex

GENERAL COMMENTS:

It was a busy day for the livestock markets and Thursday's market isn't going to be any slower with export reports released early in the day and then Thursday afternoon debuting the Quarterly Hogs and Pigs report. Wednesday's cash cattle trade was exciting, as the South was able to secure $1.00 more than last week, but the North scored trade that was $3.50 higher than a week ago. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.71 with a weighted average of $92.18 on 12,625 head. May corn is up 2 cents per bushel and May soybean meal is up $2.20. The Dow Jones Industrial Average is down 3.09 points and NASDAQ is down 265.81 points.

LIVE CATTLE:

Corn prices are holding steady (check), slaughter is continuing to run aggressively (check) and cash cattle trade is developing higher (check, check and check!) There's been positivity laced throughout the market this week and it's been an absolute breath of fresh air. The market's fundamentals (slaughter, boxed beef prices and cash cattle trade) have set their sights on higher ground and have consequently led the futures market higher along with their rally. April live cattle closed steady at $119.12, June live cattle closed $0.25 higher at $120.30 and August live cattle closed $0.65 higher at $119.75. There was light trade that developed throughout the countryside Wednesday afternoon. Southern cattle sold for mostly $115 which is $1.00 higher than last week's business, and Northern cattle sold for $184 to $185 which is about $3.50 higher than last week. Wednesday's slaughter is estimated at 121,00 head, 7,000 head more than a week ago and 4,000 head less than a year ago.

The Fed Cattle Exchange Auction listed a total of 2,633 head, of which 1,550 actually sold, 1,083 head were listed as unsold, as they did not meet the reserve prices, that ranged from $115 to $116. Opening prices ranged from $112 to $116, high bids ranged from $114.25 to $116. The state by state breakdown looks like this: Texas 1,144 total head, with 173 head sold at $115.00, 971 head went unsold; Kansas 112 total head, all of which went unsold; Nebraska 1,377 total head, all sold at $116.00.

Boxed beef prices closed mixed: choice up $0.85 ($234.84) and select down $1.16 ($224.07) with a movement of 126 loads (63.83 loads of choice, 17.20 loads of select, 18.14 loads of trim and 26.68 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady. I'd like to be able to say that the Southern Plains should be able to score at least another $1.00 higher this week, but with their showlists being ample, it's a tough call. Seeing that the market has been tested in both the North and the South, the market will most likely continue to trade within those price ranges.

FEEDER CATTLE:

The nearby corn contracts may have been able to sneak by and close slightly higher before the day's end, but that didn't derail the excitement in the feeder cattle complex. April feeders closed $2.70 higher at $142.45, May feeders closed $1.85 higher at $147.32 and August feeders closed $1.30 higher at $156.87. Thankfully, the corn market's stronger trade didn't develop until later in the day when the feeder cattle contracts were confident in trading higher and the stronger cash cattle trade sure helped boost the feeder cattle market's confidence. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers sold fully steady. Feeder heifers, however, sold $2.00 to $3.00 higher with the exception of those weighing over 900 pounds, which sold steady. Steer calves sold $1.00 to $3.00 lower, and heifer calves traded steady to $2.00 lower when compared to last week's market. Demand was strong throughout most of the sale and with train expected to hit the surrounding area next week producers are hopeful that grass conditions will continue to only get better. The CME Feeder Cattle Index for March 24: up $0.22, $134.86.

LEAN HOGS:

Thankfully, the nearby lean hog contracts were able to close the day higher while the deferred contracts drew back throughout Wednesday's trade. April lean hogs closed $1.30 higher at $97.77, June lean hogs closed $0.80 higher at $102.05 and July lean hogs closed $0.57 higher at $101.52. It's truly amazing how strong this hog rally has been, and the market only continues to add more and more support behind the movement. Looking to Thursday's trade, the market has several different curveballs that could be thrown its way. Keeping a close tab on both Thursday's export report and the Quarterly Hogs and Pigs report will be key, but it's also important to keep a close eye on slaughter levels. There's been no sign of packer regression and no sign that plants are looking at slowing chain speeds, but the revised slaughter numbers for earlier in the week are stemming to processing troubles at one sole plant. Seeing that packers again moved the cash market higher, buying upward of 12,625 head, leads one to believe that they still see plenty of strength in this market and are wanting to secure as much product as available. Pork cutouts totaled 254.12 loads with 231.56 loads of pork cuts and 22.56 loads of trim. Pork cutout values: up $4.69, $110.47. Wednesday's slaughter is estimated at 491,000 head, 3,000 head less than a week ago and 12,000 head less than a year ago. Tuesday's hog slaughter was revised to 465,000 head. The CME Lean Hog Index for March 22: up $0.76, $93.47.

­­­­­THURSDAY'S CASH HOG CALL: Steady. Packers could be a little gun shy to Thursday's market, simply given the fact that the day is heavily weighted with reports and they've already been aggressive earlier in the week.

Wednesday Midday Livestock Market Summary - Optimism Favors Contracts

GENERAL COMMENTS:

So far Wednesday has been good to the livestock complex as technically the futures continue to be met with ample trader interest and fundamentally the cattle market is seeing buyers may be pushed into paying higher prices this week. There's yet to be any cash cattle trade develop, but packers have started to show interest on cattle in the North. May corn is down 1/2 cent per bushel and May soybean meal is up $0.70. The Dow Jones Industrial Average is up 320.90 points and NASDAQ is down 56.54 points.

LIVE CATTLE:

The cash cattle market has seen some bids trickle in at $114 live and $182 dressed in Nebraska, but feedlots aren't overly keen about accepting steady bids this early in the week. With boxed beef prices seeing strong demand this week and the futures market favoring higher prices, feedlots are optimistic about moving the market higher again this week. Asking prices in the South have been noted at $116 to $117 and asking prices in the North are pinned at $185. Trade isn't expected to really begin until late Wednesday afternoon or Thursday. The live cattle contracts are trading modestly higher like the rest of the livestock sector as traders are seeing optimism build. April live cattle are steady at $119.12, June live cattle are up $0.20 at $120.27 and August live cattle are up $0.37 at $119.47.

The Fed Cattle Exchange Auction listed a total of 2,633 head, of which 1,550 actually sold; 1,083 head were listed as unsold as they did not meet the reserve prices which ranged from $115 to $116. Opening prices ranged from $112 to $116, high bids ranged from $114.25 to $116. The state-by-state breakdown looks like this: Texas 1,144 total head, with 173 head sold at $115.00, 971 head went unsold; Kansas 112 total head, all of which went unsold; Nebraska 1,377 total head, all sold at $116.00.

Boxed beef prices are mixed: choice up $1.12 ($235.11) and select down $1.64 ($223.59) with a movement of 74 loads (35.40 loads of choice, 11.30 loads of select, 13.33 loads of trim ad 14.35 loads of ground beef).

FEEDER CATTLE:

Feeder cattle contracts could get used to the corn market trading lower, which consequently gives them the opportunity to trade higher! April feeders are up $2.35 at $142.10, May feeders are up $1.60 at $147.07 and August feeders are up $0.87 at $156.45. As the March contract prepares to expire Thursday, March 25, the market's attention is funneling into the April and May contracts. Thankfully this week has been widely supported as the live cattle contracts are trading modestly higher and the cash cattle market is itchy at the opportunity to see the cash market make advancements again -- all of which will help create more opportunity throughout the feeder cattle complex.

LEAN HOGS:

Cash prices may be a tick lower, but the nearby lean hog contracts and pork cutout values still look for bigger and better things throughout the lean hog market. April lean hogs are up $1.10 at $97.57, June lean hogs are up $0.87 at $102.12 and July lean hog are up $0.67 at $101.60. Thursday will be a big day for the lean hog market as the industry awaits another export report and the Quarterly Hogs and Pigs Report. So far the hype of Thursday's busy schedule has waned on the nearby contracts but the market's deferred contracts are somewhat leery and have pulled back from their forward progression.

The projected CME Lean Hog Index for 3/23/2021 is up $0.38 at $93.85 and the actual index for 3/22/2021 is up $0.76 at $93.47. Hog prices are lower on the National Direct Morning Hog Report, down $0.23 with a weighted average of $89.19, ranging from $88.00 to $96.00 on 7,165 head and a five-day rolling average of $87.85. Pork cutouts total 151.68 loads of pork cuts and 134.48 loads of trim. Pork cutout values: up $3.86, $109.64.

Wednesday Morning Livestock Market Update - Can Bullish Momentum Be Maintained?

General Comments:

There was a feeling of bullishness in the air Tuesday as cattle futures moved back above price resistance. The prospect of higher cash this week as well as a stronger indication that the seasonal spring rally is beginning gave confidence to traders to own futures contracts. It was a nice way to celebrate National Ag Day. Boxed beef prices were strong, possibly indicating consumer demand will remain strong in the coming weeks. Stimulus money is being received and restaurant demand is improving. Cash trade has not yet taken place, and it is very possible there will not be any Wednesday as current market fundamentals may have feedlots holding out for higher prices.

Hogs were again on fire Tuesday after futures took a little breather. Only April made a new contract high with the rest of the contracts stopping just shy of new highs. There is just no stopping the aggressiveness of packers as they continue to pay higher prices, and rightly so. Demand is strong with consumers not showing any price resistance. Cutouts were very strong, underpinning the market. Technical indicators are enticing traders to buy futures as the trend is up with more room left to the upside. The hog supply is expected to be lower during the second quarter and in another week, the market will be entering that period. The quarterly Hog and Pig report on Thursday could temper trader aggressiveness Wednesday.

	BULL SIDE		BEAR SIDE
1)	Cattle futures pushed back above price resistance, which may stimulate technical traders to step into the market on the long side.	1)	There is risk some feedlots may need to move cattle and steady packer bids could trigger business Wednesday.
2)	Strong boxed beef and strong demand is expected to result in higher cash this week.	2)	Cattle futures still have a distance to go to regain what was lost last week. Any stalling of the rally could trigger selling.
3)	The slight correction of hog futures was enough to bring traders back into the market to positions themselves for higher prices.	3)	The upcoming Hog and Pig report could leave traders content with steady prices. It could also trigger some profit-taking just as a precautionary measure.
4)	Strong cutouts and aggressive packers should push futures to new highs even before or after the Hog and Pig report on Thursday.	4)	The inability of future to achieve new contract highs may establish that level as a place to set sell orders moving the market into a sideway pattern.

Tuesday Closing Livestock Market Update - Contracts Higher

GENERAL COMMENTS:

It was a great day for the livestock contracts as the market performed exceptionally well and allowed for advancements throughout the live cattle, feeder cattle and lean hog contracts. The biggest drivers for the market's upward surge is the demand for the pork market and the exciting feeling that there may be a cash cattle rally brewing if boxed beef prices keep scaling higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.20 with a weighted average of $91.47 on 7,654 head. May corn is up 2 1/4 cents per bushel and May soybean meal is up $2.20. The Dow Jones Industrial Average is down 308.05 points and NASDAQ is down 149.84 points.

LIVE CATTLE:

Boxed beef prices are making stout advancements, the futures market closed higher and cash cattle have yet to test the market -- it sounds like a perfect week to gain momentum to me! April live cattle closed $0.35 higher at $119.12, June live cattle closed $1.12 higher at $120.05 and August live cattle closed $0.97 higher at $119.10. Looking at the market from a feedlot perspective, they are sitting in a fine position to at least move the market $2.00 higher. Last week's slightly higher trade gave the market the confidence it needed to keep asking for more, and this week's higher boxed beef trend has solidified the fact that stronger cash cattle trade is a must. Thankfully, with boxed beef prices seeing an uptick, payers may be a little more willing to increase their cash bids.

Boxed beef prices closed higher: choice up $3.04 ($233.99) and select up $2.18 ($225.23) with a movement of 143 loads (76.43 loads of choice, 22.27 loads of select, 14.21 loads of trim and 29.99 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: $2.00 higher. It's silly to ask the market to trade $1.00 higher this week when boxed beef demand is seeing strong advancements and packers will always negotiate prices lower, but never higher. Feedlots would be best suited if they continue to press on and wait until potentially Thursday to move cattle versus jumping on the bids that are first noted come Wednesday.

FEEDER CATTLE:

Even though the corn contracts kept their momentum through the end of day, the feeder cattle contracts still closed fully higher, feeling supported by the stronger trade in the live cattle contracts and through the buying happening in sale barns this week. April feeders closed $0.32 higher at $139.75, May feeders closed $0.37 higher at $145.47 and August feeders closed $0.37 higher at $155.57. At Callaway Livestock Center in Kingdom City, Missouri, compared to last week, feeder steers under 600 pounds sold steady to firm compared to last week's light offering. Steers weighing 600 to 700 pounds sold $2.00 to $4.00 higher, steers weighing 700 to 750 pounds sold steady to $3.00 higher and those weighing over 750 pounds weren't tested enough to get an accurate trend. Feeder heifers weighing 400 to 700 pounds traded steady. Slaughter cows traded $2.00 to $5.00 higher. The CME Feeder Cattle Index for March 22: up $0.38, $134.64.

LEAN HOGS:

The lean hog contracts may have traded doggishly through Monday's trade, but traders felt confident in the complex after seeing heightened demand continue into this week. April lean hogs closed $1.42 higher at $96.47, June lean hogs closed $1.77 higher at $101.25 and July lean hogs closed $1.27 higher at $100.95. Monday's slaughter was revised lower and Tuesday's slaughter is marked lower than where we'd like to see the market clipping along at, but the reduced slaughter isn't coming from a lack of demand or pull back from packers (as evidenced by the cash market), rather from a sole plant that ran into processing issues the past two days. Pork cutouts total 362.32 loads with 228.13 loads of pork cuts and 24.18 loads of trim. Pork cutout values: up $2.52, $105.78. Tuesday's slaughter is estimated at 476,000 head, 17,000 head less than a week ago and 23,000 head less than a year ago. Monday's hog slaughter was revised to 481,000 head. The CME Lean Hog Index for March 19: up $1.00, $92.71.

WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. Seeing that pork demand is still phenomenally strong, packers may continue to support the cash market.

Tuesday Midday Livestock Market Update - Contracts Step Confidently

GENERAL COMMENTS:

Tuesday is bringing a breath of fresh air to the livestock sector as the futures are mostly higher and aspiring to keep that momentum. The biggest challenges lie within the lean hog and feeder cattle futures. The lean hog market needs to continue to see fundamental support to keep trading higher; the feeder cattle market is leery of corn's modest rally. May corn is up 3 1/4 cents per bushel and May soybean meal is up $2.80. The Dow Jones Industrial Average is down 31.15 points and NASDAQ is down 33.60 points.

LIVE CATTLE:

It is still quiet throughout cattle country and, with boxed beef prices taking a healthy run at higher prices, feedlots are feeling more and more empowered to price their cattle higher. Thus far packers have yet to offer bids and asking prices haven't been noted, which could mean Tuesday is going to pass the market by without any trade developing. If feedlots are going to successfully move this week's cash cattle market higher, it won't be done early in the week, but later in the week when packers feel pushed to get their week's buying secured. The board is continuing to trade higher and realistically should be able to keep trading higher as nearby resistance levels aren't bothersome in the immediate future. April live cattle are up $0.15 at $118.92, June live cattle are up $1.05 at $119.95 and August live cattle are up $0.80 at $118.92.

Boxed beef prices are higher: choice up $2.28 ($233.23) and select up $2.71 ($225.76) with a movement of 78 loads (34.45 loads of choice, 11.18 loads of select, 10.49 loads of trim and 21.64 loads of ground beef).

FEEDER CATTLE:

The battle between corn futures and feeder cattle contracts continues as feeder futures would love to trade higher but the corn market has found some renewed support and is making way at a modest rally. April feeders are up $0.05 at $139.47, May feeders are up $0.20 at $145.30 and August feeders are up $0.02 at $115.15. Early in the day, the feeder cattle contracts were taking the rally of the corn market more bearishly. But with the higher trade seen throughout the live cattle market, the complex has since traded modestly higher, but is keeping a close eye on the corn market and its momentum.

LEAN HOGS:

Watching how the lean hog market closes day in and day out has been like waking up in the morning while you are night calving and expecting a nasty additional snow on top of what you've already tromped through the last two weeks. You struggle out of bed, sleepily stumble to the door to throw on your 97 layers of winter gear and brace yourself to look outside and see how much nasty white fluff has accumulated since your last check! Well, monitoring the lean hog complex in the last month has been just like that -- you monitor the markets all through the day but hope and pray closing prices are higher and pull up the data all while holding your breath praying the fundamentals shined through. Thankfully even though Monday's futures contracts closed lower, the market's fundamentals still closed higher, which has supported Tuesday's strong trade throughout the futures market. April lean hogs are up $1.35 at $96.40, June lean hogs are up $1.52 at $101.00 and July lean hogs are up $1.17 at $100.85. If the market can keep seeing higher cash hog trade and higher pork cutout values all while maintaining a rigorous slaughter speed, the technical side of the market may be able to hold.

The projected CME Lean Hog Index for 3/22/2021 is up $0.76 at $93.47, and the actual index for 3/19/2021 is up $1.00 at $92.71. Hog prices are sharply higher on the National Direct Morning Hog Report, up $3.41 with a weighted average of $89.42, ranging from $86.00 to $96.00 on 4,366 head with a five-day rolling average of $87.25. Pork cutouts total 240.61 loads with 222.38 loads of pork cuts and 18.23 loads of trim. Pork cutout values: up $6.29, $109.55.

Tuesday Morning Livestock Market Update - Lofty Prices Increase Caution

General Comments:

Cattle futures Monday were able to regain some of the loss of last week, but the gains were minimal and hard to come by. The Cattle on Feed report was not friendly enough to spark any major buying interest, but futures were a bit overdone to the downside. It may be difficult for traders to get too bullish about this market unless futures move above last week's technical support, which is now this week's resistance. Total beef in cold storage for the month of February was up 3% from February 2020, but down 2% from January. The decline during of month of three less days than January is a positive sign for demand. This was somewhat expected as restaurant demand has been improving. Hopefully stronger boxed beef prices will increase the need for packers to purchase cattle, resulting in higher cash this week. The Commitment of Traders report showed funds were net buyers of 1,900 futures contracts increasing their net long positions to 83,560.

Hog futures struggled for a while Monday and even though some contracts closed lower, they had come back off their lows by quite a bit. Packers remained aggressive with an increase of $2.55 on the National Direct Hog report. Pork is in demand and there is plenty of room in cold storage. The February Cold Storage report showed total pork inventory increasing 7% from January, but inventory is down 24% from a year ago. Boneless pork was the most bullish of the categories with it being 4% less than January and 23% less than a year ago. The ideal is to limit inventory growth, but if it does increase, it will not be bearish to the market for a period of time. Technically, June through August futures are flirting with the uptrend line, which is some cause for concern. The Commitment of Traders report showed funds as net buyers of 1,546 contracts, bringing their net-long positions to 75,833.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report is behind us and futures were able to close higher. Trader are defending their long positions.	1)	The rebound of cattle futures after the large sell-off last week leaves much to be desired. Traders may remain neutral until cash provides direction.
2)	Boxed beef prices are showing some strength, which may result in packers becoming more aggressive this week with potentially higher bids.	2)	Packers may not be willing to increase bids this week or increase them very little. Feedlots need to move cattle and may take what they can get at steady prices.
3)	Hog futures punched below the uptrend line Monday but were able to close back above it. This keeps the overall uptrend intact.	3)	Hog futures testing the uptrend may be a foretaste of what may unfold if there is any slowing of packer aggressiveness.
4)	Packer were again aggressive with cash as they see tighter supplies developing and want to get as many hogs as they can to satisfy strong demand.	4)	Cutout may be showing early signs of wavering, which may indicate prices have found some demand resistance. The restaurant pipeline may be filled to where it needs to be for the time being with retail demand needing to carry the baton.