GENERAL COMMENTS:
It was a great day throughout the livestock complex as nearly the entire marketplace was able to close higher. The lean hog market continues to soar higher and the support that began to develop early in the day throughout the live cattle contracts helped encourage the feeder cattle contracts into trading higher as well. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.42 with a weighted average of $86.84 on 5,490 head. May corn is up 3 3/4 cents per bushel and May soybean meal is down $1.20. The Dow Jones Industrial Average is up 189.42 points and NASDAQ is up 53.63 points.
LIVE CATTLE:
The live cattle contracts had a promising day as the complex was able to close higher, which ultimately shot a gust of optimism throughout the market. April live cattle closed $1.22 higher at $119.42, June live cattle closed $0.57 higher at $122.02 and August live cattle closed $0.67 higher at $121.67. It's very odd to see the June live cattle contract trading above the April contract, but if supplies get tight enough, and if consumer demand stays as strong as it is, I guess anything is possible. There was some cash cattle trade that developed at $114, which, at this point, is a win -- it's a win that the market didn't start trading again at $113, and hopefully still means that the feedlots that have yet to sell can conquer $115 before the week is over. There was also some dressed cattle trade at $179 to $180, but fewer were sold in the dressed market. Wednesday's slaughter is estimated at 117,000 head, 4,000 head less than a week ago and 7,000 head less than a year ago.
The Fed Cattle Exchange Auction listed a total of 2,374 head, of which 894 actually sold, 1,480 head were listed as unsold, as they did not meet the reserve prices, that ranged from $114 to $115 (1 lot heiferettes $95). Opening prices ranged from $112 to $113 (1 lot heiferettes $90), high bids ranged from $113 to $114.50. The state-by-state breakdown looks like this: Kansas 152 total head, all of which went unsold; Nebraska 667 total head, with 234 head sold at $114.50, 433 head went unsold; Texas 1,655 total head, with 1,555 head sold at $114.25-$114.50, 895 head went unsold.
Boxed beef price closed mixed: choice up $1.54 ($228.47) and select down $1.18 ($217.59) with a movement of 129 loads (84.27 loads of choice, 22.46 loads of select, 6.27 loads of trim and 16.22 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady to $1.00 higher. I still have high hopes for $115 before the week is over. If the cash market continues to trade at $114, this will be the seventh consecutive week in a row of steady trade, which is simply unheard of. Hang in there feedlots, there's more to be had.
FEEDER CATTLE:
The feeder cattle contracts didn't have an easy road to get to the complex's mostly higher close, but nevertheless, the positive trade throughout the live cattle contracts spurred on the feeder cattle market before Wednesday's close. March feeders closed $0.35 higher at $136.92, April feeders closed $1.32 higher at $144.65 and May feeders closed $0.45 higher at $150.17. Thankfully, corn prices continued to trade mostly lower, so the feeder cattle contracts weren't pressured by higher input costs. If the cash cattle market can show improvement, the feeder cattle market is ready to follow its bold steps. At South Central Regional Stockyards in Vienna, Missouri, compared to last week, feeder steers sold steady to $4.00 lower, while feeder heifers sold steady to $5.00 higher, and there was phenomenal demand for those weighing 500 to 600 pounds. Slaughter cows sold steady and demand throughout the sale was pretty consistent with the week before, as numbers this week were less from the countryside's recent rainstorm. The CME Feeder Cattle Index for March 16: up $0.09, $133.95.
LEAN HOGS:
When supplies are tight it's amazing what the market can do! There are now three lean hog contracts (June 2021, July 2021 and August 2021) above $100.00 and the market continues to be met with phenomenal consumer demand, which could continue to support these levels. Wednesday's pork cutout closed slightly weaker but I don't think that it's enough of a change to signal that the market is thinking about scaling lower, especially when cash hog prices continue to see support and slaughter keeps running at a rapid pace. April lean hogs closed $0.77 higher at $93.67, June lean hogs closed $1.35 higher at $102.32, and July lean hogs closed $1.10 higher at $102.10. Pork cutouts totaled 289.05 loads with 253.19 loads of pork cuts and 35.86 loads of trim. Pork cutout values: down $0.10, $100.80. Wednesday's slaughter is estimated at 494,000 head, 2,000 head more than a week ago and 9,000 head less than a year ago. The CME Lean Hog Index for March 15: up $0.56, $89.91.
THURSDAY'S CASH HOG CALL: Steady. Seeing how positive the hog market is, one could be inclined to calling Thursday's hog market higher yet again as supplies are running tight, but seeing that packers only bought 5,490 head Wednesday afternoon tells me that only a few are still looking for hogs.
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