GENERAL COMMENTS:
Cattle futures are carrying their rally into Monday afternoon while the lean hog market continues to be pressured to trade lower. With hog slaughter still trending high, packers buying aggressively in the morning cash market and pork cutout values higher, Tuesday's trade could be encouraged by the strong fundamental interest once again if the market doesn't close higher by the afternoon. May corn is up 11 1/4 cents per bushel and May soybean meal is up $5.20. The Dow Jones Industrial Average is down 33.50 points and NASDAQ is up 26.68 points.
LIVE CATTLE:
Live cattle futures are having a good day seeing modest support boost the entire complex higher. April live cattle are up $0.40 at $119.40, June live cattle are up $1.07 at $121.50 and August live cattle are up $0.80 at $120.57. The best thing that could happen to the cattle market this week is if cash prices see a spike and carcass weights continue to trend lower. With last week's negotiated movement quite sizeable (92,625 head) feedlots are stuck in a hard spot, fighting themselves and the market at the same time. Last week they needed to move some cattle in order to keep their showlists current. But seeing packers buy over 75% of last week's movement for delivery in the next two weeks means one thing -- packers NEEDED the cattle and feedlots could have gotten higher prices. Hopefully this week's market is able to finally push the market past its stagnant holding range of $113 to $114 live and $178 to $180 dressed. Showlists this week are lighter all throughout the major feeding states; Nebraska and Colorado are lower, while Texas and Kansas are only mildly lower.
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 are mixed: choice up $0.55 ($226.42) and select down $1.52 ($218.75) with a movement of 43 loads (23.85 loads of choice, 9.75 loads of select, 5.15 loads of trim and 3.91 loads of ground beef).
FEEDER CATTLE:
Nearby corn prices are seeing a modest rally, but as most of the corn contracts trade mildly weaker, the feeder cattle contracts seem confident in their morning rally. March feeders are up $0.60 at $136.95, April feeders are up $0.75 at $143.97 and May feeders are up $1.02 at $149.40. The biggest win for the feeder cattle contracts would come if the cash cattle market could trade higher. That, in and of itself, would provide incentive for cattle buyers to buy some of these feeder cattle being offered at sales and given them confidence that they are going to be able to sell them later down the road for somewhat of a profit. But as the market sits with sorry fat cattle prices and lofty cost of gains, feeder cattle buyers are leery of over-extending their position.
LEAN HOGS:
Friday's weaker close hasn't helped Monday's lean hog futures as the contracts dive lower, not finding any market support technically speaking. April lean hogs are down $1.45 at $89.95, June lean hogs are down $0.62 at $98.37 and July lean hogs are down $0.57 at $98.90. The board's weaker trend doesn't come as a market-rattling surprise as last week most of the contracts jumped to new life-of-contract highs. Determining if the market intends to trade starkly lower or if it intends to hold weaker to somewhat steady remains the bigger question for this week.
The projected two-day CME Lean Hog Index for 3/12/2021 is up $0.95 at $89.35, and the actual index for 3/11/2021 is up $0.75 at $88.40. Hog prices are higher on the National Direct Morning Hog Report, up $2.44 with a weighted average of $85.45, ranging from $82.00 to $90.00 on 4,648 head and a five-day rolling average of $84.38. Pork cutouts total 141.81 loads with 124.76 loads of pork cuts and 17.05 loads of trim. Pork cutout values: up $5.86, $104.16.
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