GENERAL COMMENTS:
It was a mixed market for livestock enthusiasts as cash cattle sellers don't like the prices that surfaced, but the feeder cattle and lean hog contracts were delighted to trade higher. Thursday's export report could heavily wane on the hog complex if it's as bearish as last week's. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.82 with a weighted average of $82.75 on 7,135 head. May corn is down 9 3/4 cents per bushel and May soybean meal is down $2.90. The Dow Jones Industrial Average is down 121.43 points and NASDAQ is down 361.04 points.
LIVE CATTLE:
It's never good when the cash cattle market sees a strong movement of cattle as early in the week as Wednesday -- especially for lower prices. The live cattle contracts closed mostly higher, but the nearby contracts of April and June were pressured to close slightly lower. The slight gain in the deferred contracts didn't have any morale boosting power on the cash cattle market, as the focus is on the here and now. April live cattle closed $0.02 lower at $119.40, June live cattle closed $0.07 lower at $117.67 and August live cattle closed $0.10 higher at $116.90. There was a healthy movement of cattle in the South for $114, which is steady, and cattle in the North for $180, which is $2.00 cheaper than a week ago. More trade should develop throughout the later part of the week, but Wednesday's movement was significant.
Packers are incredibly smart and it's looking like they pulled the wool over this week's market again. One of the most frustrating reasons why it's disappointing to see cattle trade this early in the week is because of how aggressive slaughter speeds are. In no time at all, packers are going to need cattle to replenish the supplies that they have vigorously worked through in the last two weeks. This week's kill is again projected to be big, pushing close to 660,000 head. Wednesday's slaughter is estimated at 121,000 head, steady with a week ago and 1,000 head less than a year ago.
Boxed beef prices closed lower: choice down $1.65 ($233.03) and select down $1.93 ($224.24) with a movement of 120 loads 68.24 loads of choice, 18.44 loads of select, 19.87 loads of trim and 13.58 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. Seeing that trade has developed already in both the North and the South, it's most likely going to keep trading steady.
FEEDER CATTLE:
The feeder cattle contracts saw the lower corn prices as a chance to trade higher and thankfully kept that momentum through closing. March feeders closed $0.47 higher at $137.00, April feeders closed $0.82 higher at $141.30 and May feeders closed $1.00 higher at $144.57. At Green City Livestock Auction in Green City, Missouri, compared to last week, feeder steers and heifers under 700 pounds traded $3.00 to $5.00 higher with instances as much as $10.00 higher on cattle that weighed less than 550 pounds. Yearlings sold unevenly steady and slaughter cows sold $2.00 to $4.00 lower. Yearlings continue to toe the line as feed costs remain a concerning factor, along with a weak cash cattle market. Demand all throughout the sale was noted as good but was especially strong for light weight cattle. The CME Feeder Cattle Index for March 2: down $0.37, $137.17.
LEAN HOGS:
Even though the market sits on pins and needles waiting for a correction, the lean hog contracts closed fully higher Wednesday afternoon. April lean hogs closed $2.57 higher at $87.92, June lean hogs closed $1.37 higher at $94.85 and July lean hogs closed $1.27 higher at $95.47. Packers are still running aggressive slaughter speeds and their rigorous kill schedules haven't weakened, but pork cutout values are starting to show some exhaustion. If Thursday's export report comes in weak, the market could be pressured into trading lower. Pork cutouts totaled 280.22 loads with 243.46 loads of pork cuts and 36.76 loads of trim. Pork cutout values: down $3.46, $91.41. Wednesday's slaughter is estimated at 497,000 head, steady with a week ago and 1,000 head more than a year ago. The CME Lean Hog Index for March 1: up $0.73, $82.63.
THURSDAY'S CASH HOG CALL: Steady. The market sits in a pivotal situation, as any day now the environment could shift as packers start running slower chain speeds and need less hogs.
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