GENERAL COMMENTS:
Monday was good day for the lean hog contracts, but a sorry day for the cattle sector as rallying corn prices drove the markets lower. But upon Tuesday's arrival, the lean hog sector has felt its momentum, but corn's retreat has allowed for the cattle market to see gains. The cash cattle market is seeing some light trade develop in the South at $140, which is $1.00 higher than last week. May corn is down 7 1/2 cents per bushel and May soybean meal is up $2.00. The Dow Jones Industrial Average is up 439.42 points.
LIVE CATTLE:
The live cattle complex is attempting to redeem itself after Monday's lousy performance. April live cattle are up $0.77 at $141.25, June live cattle are up $0.85 at $136.67 and August live cattle are up $0.82 at $138.20. The board's timing played well into the cash cattle market as some light trade is already (remember it's only Tuesday) beginning to develop in parts of the South. Thus far the market has seen cattle trade for mostly $140, which is $1.00 higher than last week. The North remains quiet, and if bets had to be made, I'd suspect that the North is holding out for higher prices. The board's upward swing has again allowed for the spot June contract to trade above the 40-day moving average ($136.11), which has been the barrier that the market has teetered with in the last week. Nevertheless, it's quite telling to see packers aggressively bidding cattle on a Tuesday, and lights and sirens should be going off in everyone's head, ending at one conclusion -- packers are short bought and there's an opportunity to push cattle higher again this week. The week is early and beef demand remains strong, the market could see even higher prices attained if feedlots hold out and let some time pass.
Boxed beef prices are higher: choice up $0.04 ($271.12) and choice up $0.79 ($260.25) with a movement of 53 loads (27.39 loads of choice, 10.71 loads of select, 4.03 loads of trim and 10.86 loads of ground beef).
FEEDER CATTLE:
The corn and live cattle contracts have completely shifted their roles in the market from Monday's trade and consequently that's helping the feeder cattle contracts trade higher. April feeders are up $1.12 at $156.90, May feeders are up $1.87 at $161.02 and August feeders are up $0.52 at $172.00. The cat and mouse nature of the corn/feeder cattle market's behavior isn't likely to change anytime soon. With cost of gains being historically higher, one can't help but to be fixated on the grain market's nature -- even if it is politically charged.
LEAN HOGS:
Seeming to follow in Monday's nature, the lean hog contracts are again trending higher despite pork cutout values venturing lower by Monday's end. Given that the pork cutout values didn't close higher Monday afternoon, hog veterans know better than to have too much belief in today's morning cutout value. June lean hogs are up $0.20 at $122.60, July lean hogs are up $0.85 at $123.17 and August lean hogs are up $0.70 at $120.87. Hog prices are rather impressive and it's appearing that packers have enough trust in consumers that they don't mind chasing the front end of this week's cash market to the point where prices jump over $5.00 higher.
The projected lean hog index for April 18 is up $0.18 at $100.50 and the actual index for April 15 is up $0.35 at $100.32. Hog prices are higher on the Daily Direct Hog Report, up $5.64 with a weighted average of $99.69 ranging from $94.00 to $110.50 on 5,851 head and a five-day rolling average of $97.26. Pork cutouts total 142.54 loads with 133.09 loads of pork cuts and 9.45 loads of trim. Pork cutout values: up $2.07, $111.56.
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