GENERAL COMMENTS:
The cattle contracts may have closed lower Friday afternoon, but that doesn't take anything away from the amazing rally this past week. The lean hog contracts held their ground and continued to rally, closing out Friday's trade mostly higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.80 with a weighted average of $100.21 on 8,411 head. May corn is down 2 1/2 cents per bushel and May soybean meal is down $5.60. The Dow Jones Industrial Average is up 297.03 points and NASDAQ is up 70.87 points.
From Thursday to Friday livestock futures scored the following changes: April live cattle up $3.40, June live cattle up $0.03; April feeder cattle up $0.88, May feeder cattle up $0.40; April lean hogs up $1.70, June lean hogs up $2.63.
LIVE CATTLE:
Tell me, honestly, is there anything sweeter than seeing packers compete for cattle in the cash cattle market!? This past week was a breath of fresh air as the cash cattle market made strong advancements and packers had to work in order to procure the number of cattle they needed. For the week, Southern live cattle traded for $118 to $123, most at $121, which is $4.00 higher than a week ago, and Northern dressed cattle sold for $192 to $196, mostly at $195 to $196, which is $5.00 to $6.00 higher than last week's business.
But, I wouldn't be doing my job if I didn't ask some hard questions, and I ask you to genuinely ponder these thoughts over the weekend. The rally this past week was phenomenal (no doubt), but if choice cuts can jump $19.23 throughout the week, and select cuts can jump $17.20, don't you think that there's still more to be had? Business this past week developed mostly on Wednesday and trickled into Thursday. If feedlots would have been able to postpone the week's trade by a single day, I'd bet that prices would have been even higher. I challenge cattlemen and feedlot managers to tirelessly work this market. There are times when the market can yield higher prices, and there are times when the market is meant to trade lower.
Friday's live cattle contracts closed lower as traders stepped to the sidelines before the day's close and look to next week to resume busines. April live cattle closed $0.72 lower at $123.42, June live cattle closed $2.45 lower at $122.57 and August live cattle closed $1.62 lower at $122.40. Friday's slaughter is estimated at 111,000 head, 6,000 head more than a week ago and 24,000 head more than a year ago. Saturday's slaughter is projected to be around 66,000 head.
Boxed beef prices had an extraordinary week as consumer demand flamed a fire under prices this past week and continues to do so. Throughout the week, choice cuts averaged $266.09 (up $19.23 from last week) and select cuts averaged $256.85 (up $17.20 from last week). The week's total movement of cuts, grinds and trim totaled 543 loads.
Boxed beef prices closed higher: choice up $1.67 ($272.17) and select up $0.24 ($264.07) with a movement of 87 loads (57.93 loads of choice, 10.11 loads of select, 9.44 loads of trim and 9.40 loads of ground beef).
MONDAY'S CASH CATTLE CALL: Higher. I hope that there isn't any cash cattle trade that develops on Monday, but when the week's business does develop it needs to be sharply higher once again as the boxed beef prices are expected to continue their rally.
FEEDER CATTLE:
The feeder cattle contracts traded lower throughout Friday's trade as Thursday's abruptly higher corn prices rocked the complex back on its heels. April feeders closed $2.37 lower at $144.75, May feeders closed $1.97 lower at $149.62 and August feeders closed $1.65 lower at $159.95. With cost of gains already higher than what feedlots would like to see given where cash cattle prices are at, any higher trade in the corn market is alarming. Now, if the cash cattle market and kick into high gear and make stellar advancements in the next couple of weeks, the painful price of high inputs could be lessened by stronger cash cattle prices. With green grass on everyone's mind, buyers were extremely aggressive this past week in procuring calves and feeders as it won't be long before grass cattle are kicked out to pasture. At Farmers and Ranchers Livestock Commission Company in Salinas, Kansas, compared to last week, steers under 600 pounds were $4.00 to $13.00 higher, steers 600 to 650 pounds were $3.00 lower, steers 650 to 950 pounds were $1.00 to $8.00 higher and steers weighing 1,000 to 1,050 pounds were $11.00 higher. Heifer calves under 450 pounds were $7.00 to $20.00 higher, heifers weighing 450 pounds to 650 pounds were $1.00 to $7.00 lower, and heifers weighing 650 to 900 pounds sold steady to $5.00 higher. Demand was excellent and for the large sale offering prices held strong throughout the day. The CME Feeder Cattle Index for April 8: up $0.53, $141.79.
LEAN HOGS:
While the cattle contracts veered lower throughout Friday's trade, the lean hog market stood firm on two fundamental points -- strong demand and tightening supplies. April lean hogs closed steady at $103.47, June lean hogs closed $0.25 higher at $108.95 and July lean hogs closed steady at $106.80. Looking to next week's trade the futures market will continue to look towards the fundamentals of the market and rely on strong pork demand to insinuate higher prices. Pork cutouts totaled 329.66 with 289.25 loads of pork cuts and 40.41 loads of trim. Pork cutout values: up $2.17, $113.17. Friday's slaughter is estimated at 485,000 head - 37,000 head more than a week ago and 55,000 head more than a year ago. The CME Lean Hog Index for April 7: up $0.47, $100.94.
MONDAY'S CASH HOG CALL: Steady. So long as demand continues to shine through, packers will most likely continue to support the market as supplies are tight and only expected to get tighter.
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