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.
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