GENERAL COMMENTS:
Both the live and feeder cattle contracts were able to slip through the day's close with modest gains, while the lean hog contracts crumbled in their nearby contracts. Looking to Wednesday's trade, the market will be eager to see if there's much interest in the Fed Cattle Exchange as feedlots are ready for stronger cash cattle prices. Hog prices closed higher on the National Direct Afternoon Hog report, up $2.28 with a weighted average of $80.93 on 9,515 head. May corn is up 6 3/4 cents per bushel and May soybean meal is up $3.40. The Dow Jones Industrial Average is down 143.99 points and NASDAQ is down 230.04 points.
LIVE CATTLE:
Early Tuesday morning the live cattle contracts were trading fully lower, feeling pressured by the week's weaker boxed beef prices and knowing that the cash cattle market was going to be a waiting game. But, as time rolled on, the complex gained more support and closed Tuesday fully higher. April live cattle closed $0.45 higher at $119.42, June live cattle closed $0.25 higher at $117.75 and August live cattle closed $0.32 higher at $116.80. Feedlots know that packers are going to fight to the week's end to avoid paying higher cash cattle prices, but they are up to the challenge and are ready to see this cash cattle market move higher. Other than the trade that developed through the Texas Cash Pool, the market has been untested. Asking prices in the South are noted at $116 and the North has yet to share their prices. Tuesday's slaughter is estimated at 123,000 head, 1,000 head more than a week ago and 1,000 head less than a year ago.
The Texas Cash Pool was able to sell 775 head Tuesday morning at $113.11, which is $0.94 less than last week's Cash Pool price. Other packers offered bids of $112.01. Otherwise the countryside is still quiet with little interest having developed yet.
Boxed beef prices closed lower: choice down $4.35 ($234.68) and select down $1.47 ($226.17) with a movement of 112 loads (75.61 loads of choice, 19.43 loads of select, 5.98 loads of trim and 12.00 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. While the April live cattle contract sits at $119.42, feedlots know that it's long past time to see the cash market trade higher. Getting packers on board with paying higher prices won't be an easy feat, but as they continue to run swift processing speeds, they will need to restock supplies. It's unlikely that trade will really develop until sometime Thursday or Friday.
FEEDER CATTLE:
The corn complex had a good day with the spot March contract closing $0.13 higher, and the rest of the contracts followed closely in its tracks. The feeder cattle contracts closed mixed as the nearby contracts are having a hard time finding the support they need in order to trade higher, all while corn prices continue to add stress to feedlots' bottom line. Looking at both the live cattle and feeder cattle contracts, there will likely be a change in the market's morale once the second half of the year is finally here. At that point, the industry believes that higher profits will be readily available as supplies are more manageable and will begin to trickle down from the feeding sector all the way to cow-calf producers. March feeders closed $0.67 lower at $136.52, April feeders closed $0.65 lower at $140.47 and May feeders closed $0.32 lower at $143.57. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to last week, feeder steers sold $3.00 to $7.00 lower, except those weighing 450 to 500 pounds, which sold $1.00 to $2.00 higher. Heifers sold steady to $4.00 lower, except those weighing 450 to 500 pounds, as they sold $1.00 to $2.00 higher. Demand was excellent throughout the sale and there were quite a few farmer-feeders at the sale that helped improve the sale's overall demand. Slaughter cows sold $7.00 to $10.00 lower on a light test. The CME Feeder Cattle Index for March 1: down $0.81, $137.54.
LEAN HOGS:
The lean hog market broke lower right from the day's start and confirmed that the hog complex is running out of gas. But that's not to say that the market's fundamentals are completely tired and ready to throw in the towel, as both pork cutout values and cash prices closed higher again. Watching the cash hog market over the last three weeks has been mesmerizing, as day in and day out packers are calling every producer they can think of in order to secure more supply. At some point, the cash market will cool off as packers are sacrificing their own margins in order to secure the hogs they need, but through Tuesday, the market's fundamentals still ran hot. April lean hogs closed $2.37 lower at $85.35, June lean hogs closed $1.47 lower at $93.47 and July lean hogs closed $0.92 lower at $94.20. Pork cutouts totaled 387.07 loads with 354.03 loads of pork cuts and 33.04 loads of trim. Pork cutout values: up $2.50, $94.87. Tuesday's slaughter is estimated at 497,000 head, steady with a week and year ago. Monday's hog slaughter was revised to 493,000 head. The CME Lean Hog Index for Feb. 26: up $1.20, $81.90.
WEDNESDAY'S CASH HOG CALL: Steady. Seeing that packers jumped the cash market another $2.28 higher to secure upwards of 9,515 head Tuesday afternoon doesn't lead one to believe that they are quite ready to turn a blind eye on the cash market and sit on their supplies.
No comments:
Post a Comment