GENERAL COMMENTS:
For the cattle complex it was a tough day, but the lean hog market continues to trudge onward and forward. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.80 with a weighted average of $86.45 on 10,333 head. May corn is down 11 3/4 cents per bushel and May soybean meal is down $9.80. The Dow Jones Industrial Average is up 464.28 points and NASDAQ is down 4.99 points.
LIVE CATTLE:
Unfortunately, the live cattle contracts dipped lower as the cash cattle market continues to sell for $113 to $114. April live cattle closed $0.87 lower at $118.77, June live cattle closed $0.67 lower at $118.97 and August live cattle closed $0.30 lower at $118.92. The cattle market is beyond frustrating right now. For a fifth week in a row, cash cattle prices are selling for $114, when most anticipated that the spring rally would be working its way into the market and cash prices would be somewhere around $120. Given the dismal trade that's developed over the last five weeks, feedlots are beyond disgusted with the market and it's lack of price discovery, but they've got to move cattle to keep their showlists balanced. There was another round of trade that developed throughout Wednesday's hours as Southern cattle sold for $113 to $114, and Northern cattle sold for $178 to $180, which is steady to $2.00 lower than last week. Wednesday's slaughter is estimated at 121,000 head, steady with a week ago and 4,000 head less than a year ago.
The Fed Cattle Exchange Auction today listed a total of 1,296 head (1,203 head in Texas, 40 head in Kansas, and 53 head in Nebraska), of which none actually sold, as they did not meet the reserve price of $114 (1 lot of heifers in Kansas had a reserve of $100). Opening prices were at $113, (the lot in Kansas was at $98), high bids ranged from $113 to $113.75.
Boxed beef prices closed lower: choice down $1.74 ($227.29) and select down $3.98 ($219.82) with a movement of 132 loads (81.03 loads of choice, 23.62 loads of select, 11.15 loads of trim and 16.58 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady with the week. Seeing that there's been a sizeable trade in both the North and the South, trade will continue to develop in the week's set prices.
FEEDER CATTLE:
The poor feeder cattle contracts would have loved to trade higher, as nearby corn prices fell $0.10 to $0.14 per bushel lower, but with the legs kicked out from underneath the cash cattle market again this week, chances of trading higher were slim. March feeders closed $0.95 lower at $136.20, April feeders closed $0.35 lower at $141.72 and May feeders closed $0.15 lower at $146.82. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, steer and heifer calves traded unevenly steady from $2.00 lower to $2.00 higher, with some instances of even $5.00 higher. Yearling steers and heifer traded $3.00 to $4.00 higher. Demand was good and the sale was large as producers took advantage of the warm weather and moved their cattle as conditions were dry enough to finally do so. The CME Feeder Cattle Index for March 9: down $0.03, $133.99.
LEAN HOGS:
Heck, what's adding one more market variable to monitor throughout the lean hog market, right? Well, another variable has certainty arrived, as a new variant of African swine fever (ASF) has developed in China. China has been struggling for quite some time to get their old strain of ASF under control, but now has another problem to address with the new variant. For U.S. producers, this could gravely affect hog exports in the future. The frustrating thing about China is that getting reliable information from the country about how many hogs they have had to euthanize due to the disease is nearly impossible, which adds a little complexity to the U.S. markets.
Meanwhile, even though the cattle contracts closed fully lower, the nearby hog contracts were able to defend their positions through closing and keep their modest gains. April lean hogs closed $0.42 higher at $88.77, June lean hogs closed $0.57 higher at $97.40 and July lean hogs closed $0.65 higher at $97.72. Positive news was found once again in the cash hog market and in the afternoon pork cutout values, but the daily slaughter report begs for attention. Monday's slaughter was revised lower, and now Tuesday's slaughter has been revised lower as well. Looking ahead, it wouldn't be surprising to see packers slow their chain speeds down now that they've gotten ample supplies of hogs committed and can supply the market with protein when demand calls. Pork cutouts totaled 297.36 loads with 269.49 loads of pork cuts and 27.87 loads of trim. Pork cutout values: up $0.83, $97.67. Wednesday's slaughter is estimated at 492,000 head, 5,000 head less than a week ago and 10,000 head more than a year ago. Tuesday's hog slaughter was revised to 484,000 head, 8,000 head less than what was originally stated. The CME Lean Hog Index for March 8: up $0.76, $86.08.
THURSDAY'S CASH HOG CALL: Steady to somewhat lower. One may think, with the new strain of ASF, that packers would continue to dive aggressively into the hog market to secure inventory in order to be able to meet demand later down the road, but packers have scouted the countryside and sit on ample supplies as it is, and let's not forget that chain speeds are seeing a slight reduction in pace.
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