GENERAL COMMENTS:
It was a good day for lean hog and feeder cattle futures, but only a marginal day for live cattle contracts as there was some early cash cattle trade. If feedlots could push back against the week's early trade and wait until at least Thursday or Friday to trade their cattle, higher or at least steady prices, could be demanded. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.07 with a weighted average of $84.65 on 11,275 head. May corn is down 1 1/4 cents per bushel and May soybean meal is up $0.30. The Dow Jones Industrial Average is up 30.30 points and NASDAQ is up 464.66 points.
LIVE CATTLE:
Thankfully, live cattle futures held the board's support through closing and can move to the middle of the week slightly higher. April live cattle closed $0.30 higher at $119.65, June live cattle closed $0.50 higher at $119.65 and August live cattle closed $0.37 higher at $118.22. Looking at the spot April contract and seeing it close at $119.65 Tuesday afternoon gives the cash cattle market even more push to trade higher. Unfortunately, there was some early cash trade in parts of Nebraska, Texas and Colorado for $113 to $114, but hopefully feedlots stick the rest of the week out and demand at least steady prices if not $1.00 stronger come Thursday or Friday. The Texas Cash Pool was able to sell 587 head for $113. Other packers bid $111.10, $111.88 and $112.07. Last week's Cash Pool sold for $113.11. Tuesday's slaughter is estimated at 121,000 head -- 2,000 head less than a week ago and 3,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $2.05 ($229.03) and select up $0.67 ($223.80) with a movement of 158 loads (106.54 loads of choice, 15.93 loads of select, 14.28 loads of trim and 21.67 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. Some light trade developed Tuesday afternoon, but if feedlots can stick to their guns and push trade out until later in the week they might be able to push prices fully steady if not $1.00 higher.
FEEDER CATTLE:
Feeder cattle futures were given another opportunity to trade higher and they took the day with stride! Nearby contracts saw substantial gains as the nearby corn futures closed weaker and live cattle futures were able to maintain their modest rally throughout the day, encouraging the feeder cattle contracts. March feeders closed $1.80 higher at $137.15, April feeders closed $2.40 higher at $142.07 and May feeders closed $1.90 higher at $146.97. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, feeder cattle and calves sold mostly steady compared to last week. The market's biggest outlying difference was in the stocker cattle or grass cattle which sold $5.00 to $8.00 higher. Demand was good all throughout the sale and this week's offering was bigger in size. The CME Feeder Cattle Index 3/9/2021: up $0.01, $134.02.
LEAN HOGS:
Continuing to grind modestly higher, lean hog futures conquered another day of higher prices. April lean hogs closed $1.05 higher at $88.35, June lean hogs closed $0.85 higher at $96.82 and July lean hogs closed $0.65 higher at $97.07. It's hard to deny that in the near future hog supplies are going to be tight, which is echoed by packer aggression in the current cash hog market and was vividly outlined in Tuesday's WASDE report. Still, trying to gauge when the market will begin to cool down is a tough guess. It is noteworthy that slaughter speeds are staring to slow down ever so slightly. Pork cutouts totaled 421.04 loads with 381.75 loads of pork cuts and 39.29 loads of trim. Pork cutout values: up $1.91, $96.84. Tuesday's slaughter is estimated at 492,000 head -- 5,000 head less than a week ago and 4,000 head less than a year ago. Monday's hog slaughter was revised to 489,000 head. The CME Lean Hog Index 3/5/2021: up $0.75, $85.32.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat lower. With the revision to Monday's slaughter and the slightly weaker slaughter pace, packers may be getting comfortable with their supplies and not need to dive so aggressively in the cash market in the days ahead.
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