GENERAL COMMENTS:
Friday's trade wasn't all that eventful for the livestock sector, but there were some key developments made throughout the week that bolstered both the cattle and hog markets. Heading into next week's trade, both cattle and hog enthusiasts will be looking to secure all that the market has to offer. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.54 with a weighted average of $87.72 on 7,384 head. May corn is up 11 1/4 cents per bushel, and May soybean meal is up $9.70. The Dow Jones Industrial Average is down 234.33 points, and the NASDAQ is up 99.07 points.
From Friday to Friday, livestock futures scored the following changes: April live cattle were down $0.60, and June live cattle were down $1.75; March feeder cattle were down $1.67, and April feeder cattle were down $3.80; April lean hogs were up $2.85, and June lean hogs were up $1.60.
LIVE CATTLE:
Do you see it? Do you feel it? Ah yes ... that, my friends, is hope ... potentially opportunity ... and, better yet, a reigniting light for your drive! The board may have closed lower -- heck, even sharply lower in some cases -- but by Friday's close, the beef market has big things to look forward to. This past week, the cash cattle market broke the six-week cycle of steady cash cattle trade, USDA unveiled a Cattle on Feed report that showed lighter placement numbers than a year ago, and news broke that a new packing plant is being built in North Platte, Nebraska, by a group of cattlemen and investors that have strong Nebraska ties and know the importance of creating more shackle space. If that's not something worth celebrating, then, by all means, please take my birthday away!
April live cattle closed $0.17 lower at $118.40, June live cattle closed $0.97 lower at $118.67 and August live cattle closed $1.25 lower at $117.77. There was a little cash cattle trade that developed throughout Friday, but it was all clean-up in nature and traded steady with the week's trend of $179 to $182 dressed and $114 to $114.50 live. Friday's Cattle on Feed report thankfully didn't show bearish placement numbers, as 1.68 million head were placed in February, which is 2% less than what was placed in 2020. But, truthfully, given the tight financials that feedlots are operating under and the winter storm that devastated nearly the entire country in February, I'm surprised that placements were even that high. But, nevertheless, lighter placements are a winning feat and could help spark some positive trade next week.
Friday's slaughter is estimated at 106,000 head -- 7,000 head less than a week ago and a year ago. Saturday's slaughter is estimated at 65,000 head -- 12,000 head more than a week ago and 1,000 head less than a year ago. The week's estimated slaughter is pegged at 624,000 head, which is 23,000 head less than a week ago and 36,000 head less than a year ago.
Boxed beef prices closed higher: choice up $1.38 ($229.99) and select up $1.84 ($219.95) with a movement of 108 loads (67.26 loads of choice, 12.05 loads of select, 8.42 loads of trim and 20.18 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Higher. Feedlots thankfully broke the brutal cycle of steady cash cattle trade and know that there's more to be had in this cash cattle market. With boxed beef prices seeing some support, prices could easily be $1 to $3 higher next week.
FEEDER CATTLE:
The feeder cattle contracts dove lower as the week came to a close, which was partially due to the fact that the corn contracts decided to trade higher and also from the lack of support from the live cattle complex and interested traders. March feeders closed $0.85 lower at $134.67, April feeders closed $2 lower at 139.42 and May feeders closed $1.95 lower at $144.67. The countryside wasn't gravely affected by the board's weaker close, and in all reality, saw great demand for the heavier-weighing feeders. That's a change from what we've seen in the last couple of weeks when grass-fed calves were being bought with exceptional demand. At Mitchell Livestock Auction in Mitchell, South Dakota, compared to a week ago, feeder steers weighing 650 to 800 pounds sold unevenly steady, while steers weighing 800 to pounds and up sold $3 to $6 higher. Feeder heifers weighing 650 to 750 pounds sold unevenly steady, while heifers weighing 750 pounds and up sold $2 to $6 higher. The CME feeder cattle index for 3/18/2021: down $0.25, $134.03.
LEAN HOGS:
The nearby lean hog contracts closed slightly lower, but thankfully, most of the contracts were able to round out the week higher. Both the June and July contracts kept their over-$100 positions through Friday's closing bell. April lean hogs closed $0.05 lower at $94.25, June lean hogs closed $0.57 higher at $100.60 and July lean hogs closed $0.72 higher at $100.62. The successful rally in the hog market will be one worth remembering when supplies grew tight and demand carried the market far beyond what most thought even possible. Looking to next week's trade, the market will continue to be challenged technically. But if the fundamentals can keep supporting these prices, then there's reason to keep trading strong. However, if demand starts to weaken, a top may be in the near future. Pork cutouts totaled 305.38 loads with 273.10 loads of pork cuts and 32.28 loads of trim. Pork cutout values: down $3.81, $102.99. Friday's slaughter is estimated at 485,000 head -- 4,000 head less than a week ago and 7,000 head less than a year ago. Saturday's slaughter is estimated at 78,000 head -- 50,000 head less than a week ago and 236,000 head less than a year ago. The week's estimated slaughter is pegged at 2,524,000 head -- 54,000 head less than a week ago and 275,000 head less than a year ago. The CME lean hog index 3/17/2021: up $0.68, $91.24.
MONDAY'S CASH HOG CALL: Steady. There's still ample support encouraging the market to keep trading higher. If the market's drivers (consumer demand, cutout values and slaughter speed) can stay elevated, then packers may keep scouting the countryside to secure hogs. But if demand tapers, then their aggression will too.
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