GENERAL COMMENTS:
It was a rewarding day for the cattle contracts, as both the live cattle and feeder cattle contracts were able to defend their stronger positions through closing. Meanwhile, the lean hog market has some decisions ahead of itself as the technical side of the market is encouraging lower trade, but the market's fundamentals are roaring higher again. Hog prices closed higher the National Direct Afternoon Hog Report, up $3.00 with a weighted average of $87.40 on 8,369 head and a five-day rolling average of $85.74. May corn was up 10.50 cents, closing at $5.4950. May soybeans were up 6 1/4 cents, closing at $14.195. The Dow closed up 174.82 points at 32,953.46 and the NASDAQ closed up 139.85 points at 13,459.71.
LIVE CATTLE:
It was a higher trading day for the live cattle contracts as the market rallied alongside the higher trending feeder cattle contracts. April live cattle closed $0.12 higher at $119.12, June live cattle closed $1.35 higher at $121.77 and August live cattle closed $1.05 higher at $120.82. The market will gladly take any support it can attract, but the support really needs to come late in the week to try to move the cash cattle market higher. It's still too early in the week for any cash cattle business to develop, so consequently the countryside was quiet with bids and asking prices still illusive. Monday's slaughter is estimated at 113,000 head, 8,000 head less than a week ago and 5,000 head less than a year ago.
Last week's negotiated cash cattle trade totaled 92,625 head. Of that 77% (71,192 head) are committed for delivery in the next two weeks, while the remaining 23% (21,433 head) are committed for delivery in the following 15 to 30 days.
Boxed beef prices closed lower: choice down $1.10 ($224.77) and select down $2.22 ($218.05) with a movement of 103 loads (55.37 loads of choice, 24.50 loads of select, 13.32 loads of trim and 9.72 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. I hope that there aren't developments in the cash cattle market as early as Tuesday, but my hopes don't always become the market's fate. If feedlots can push trade out until the latter half, they stand a better chance at moving the market higher.
FEEDER CATTLE:
The feeder cattle contracts had a very successful day, rounding out Monday's trade fully higher even with nearby corn prices rallying as well. The feeder cattle complex has been pressured to trade lower from both a technical and fundamental stance as traders aren't seeing the short-term opportunity in the market, and feeder cattle buyers need the cash cattle market to show some promise before they can safely go and procure more feeders for their bunks. But thankfully, come Monday morning, the market shot higher as both the live cattle and feeder cattle contracts drew the attention of traders and rallied off one another's momentum. March feeders closed $0.67 higher at $137.02, April feeders closed $0.70 higher at $143.92 and May feeders closed $1.35 higher at $149.72. Once the cash cattle market can trade higher -- the feeder cattle market is itching to follow its lead. The CME Feeder Cattle Index for March 12: down $0.20, $133.93.
LEAN HOGS:
Watching the lean hog complex right now is like watching a good, suspenseful, have you on the edge of your seat, kind of movie! The type of movie that you crave to watch again, but physically don't watch too often because it pulls the energy right out of you. If you enjoy that type of thrill, look no further than the lean hog market itself. Last week the lean hog contracts ran to new life-of-the-contract highs and consequently traded lower through Monday's trade. It's easy to jump to conclusions and think that the market's rally is simply over, but when you take into account the market's fundamentals, it looks a little different. This afternoon pork cutouts climbed above $100.00 and the cash market jumped another $3.00! Pinpointing what the market is going to do next is challenging, but with the market's fundamentals as strong as they are the technical pressure may subside for a little while longer. April lean hogs closed $0.85 lower at $90.55, June lean hogs closed $0.07 lower at $98.92 and July lean hogs closed $0.12 higher at $99.60.
Pork cutouts total 295.60 with 260.21 loads of pork cuts and 35.40 loads of trim. Pork cutout values: up $4.14, $102.44. Monday's slaughter is estimated at 490,000 head, 1,000 head more than a week ago and 3,000 head less than a year ago. Saturday's hog slaughter was revised to 128,000 head moving the week's total to 2,578,000 head. The CME Lean Hog Index for March 11: up $0.75, $88.40.
TUESDAY'S CASH HOG CALL: Steady to somewhat higher. If pork cutouts are sharply higher and packers dive aggressively into Monday's cash hog market again, they very well could be aggressive in Tuesday's market again.
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