GENERAL COMMENTS:
It was a mixed day for the livestock sector as the contracts bounced back and forth trying to decide where to trade comfortably. Looking to Wednesday's trade, the cash cattle market could see some bids start to surface, but hopefully feedlots will deflect the early offers and push trade out until later in the week when packers usually offer more money to secure cattle. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.54 with a weighted average of $95.83 on 9,044 head. May corn is down 7 1/2 cents per bushel and May soybean meal is up $0.10. The Dow Jones Industrial Average is down 104.41 points and NASDAQ is down 14.26 points.
LIVE CATTLE:
It looks like the weight of this week's market is going to fall solely onto the backs of feedlots. Asking prices in the South have been marked at $118 to $120 and asking prices in the North have been noted at $192 plus. Bids were obsolete Tuesday and it's likely that trade doesn't develop until the later part of Wednesday or even better yet, Thursday or Friday. The Texas Cash Pool successfully sold 914 head at $116.11. Bids from other packers came in at $114.98, $115.00 and $116.05. April live cattle closed steady at $120.97, June live cattle closed $0.42 lower at $122.22 and August live cattle closed $0.22 lower at $121.25. Tuesday's slaughter is estimated at 120,000 head, 3,000 head more than a week ago and 1,000 head more than a year ago.
Boxed beef prices closed higher: choice up $5.30 ($244.83) and select up $3.42 ($235.92) with a movement of 149 loads (77.69 loads of choice, 19.82 loads of select, 29.28 loads of trim and 22.47 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. Feedlots have had a brutal year since COVID-19's first debut, and it's about time that the market makes a recovery from the hardship endured. With boxed beef prices making phenomenal gains daily, feedlots hold a trump card in this week's cash cattle market and should push for at least $2.00 to $4.00 higher. Reaching $120 this week shouldn't be out of the question.
FEEDER CATTLE:
The spot April contract and the nearby May contract closed steady to somewhat lower. April feeders closed $0.25 lower at $146.82, May feeders closed steady at $152.20 and August feeders closed $0.30 higher at $160.30. If you look at the market's demand and the core fundamental drivers -- boxed beef prices, the positive momentum surrounding the cash cattle market and the obvious buying mentality at sale barns this week -- the feeder cattle contracts stand every chance at trading higher if the live cattle market will show some grit and enthusiasm. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers sold $1.00 to $3.00 higher, expect those weighing 800 to 850 pounds which sold steady. Stock steers sold up to $10.00 higher and steer calves traded $3.00 to $7.00 higher. Heifer calves over 500 pounds sold steady to $1.00 higher, and heifers under 500 pounds sold $4.00 to $10.00 higher. Demand was strong throughout the day's sale. The CME Feeder Cattle Index for March 29: up $0.89, $139.75.
LEAN HOGS:
Just when the lean hog market finally got traders talked into trading higher, both cutout values and cash hog prices closed lower. Before this sends alarming chills down your spine, we must remember that the fundamental nature of the market must be looked at through both a short- and long-term perspective. There's no denying that at some point the market will find a top, but maybe the bigger question should be what will the market do once it finds that top? Will it come crashing lower, or will it trade mixed to sideways for weeks, potentially even months on end if demand can still be a supportive factor? Given that the market is faced with tightening supplies and that demand is unbelievably strong, I tend to think that the back and forth nature of steady to somewhat lower will be the likely outcome.
Tuesday's movement of pork products was lofty as the day's cutouts totaled 401.59 loads. With cold storage supplies being lower, retailers are interested in getting their hands on any supply that's readily available. April lean hogs closed $0.55 higher at $100.92, June lean hogs closed $0.80 higher at $106.02 and July lean hogs closed $0.80 higher at $104.90. Pork cutouts totaled 401.59 loads with 370.49 loads of pork cuts and 31.09 loads of trim. Pork cutout values: down $0.95, $106.89. Tuesday's slaughter is estimated at 490,000 head, 25,000 head more than a week ago and 1,000 head less than a year ago. Monday's hog slaughter was revised to 483,000 head. The CME Lean Hog Index for March 26: up $1.41, $97.38.
WEDNESDAY'S CASH HOG CALL: Steady. Prices may have dipped slightly lower Tuesday, but packers are still buying quite a few hogs in the cash hog market in order to secure necessary supplies.
No comments:
Post a Comment