Friday Midday Livestock Market Summary - Southern Feedlots Holding Their Ground

GENERAL COMMENTS:

It's been a long time since the cash cattle market has waited to trade until Friday afternoon, and Southern feedlots are pushing the market to do exactly that. With Southern feedlots unwilling to accept packers' current bids, its seeming as though they'd be willing to roll the cattle over into next week before they'd be willing to sell them for steady money. March corn is down 1 1/4 cents per bushel and March soybean meal is down $3.20. The Dow Jones Industrial Average is up 50.44 points.

LIVE CATTLE:

The standoff between feedlots in the South and packers has only intensified as we are about to enter into Friday's noon hour, and still, the cash cattle market in the South has yet to be traded. I commend the feedlots who are firm in their asking prices and are unwilling to waiver and sell cattle for steady prices. With supplies as thin as they are, feedlots know that they sit in the driver's seat of this market. The real question is: How aggressive are they going to drive this ship? Asking prices in the South remain firm at $157-plus and at $250-plus in the North. The futures complex is anxiously waiting to see who wins this round (because it's inevitable that this will become the market's norm throughout 2023) but, in the meantime, the futures complex is trading mildly higher. February live cattle are down $0.05 at $156.67, April live cattle are up $0.25 at $160.77 and June live cattle are up $0.30 at $157.67.

Boxed beef prices are lower: choice down $0.21 ($268.54) and select down $1.16 ($250.32) with a movement of 81 loads (51.53 loads of choice, 11.55 loads of select, 6.32 loads of trim and 11.45 loads of ground beef).

FEEDER CATTLE:

With the corn complex trading mostly steady, the feeder cattle complex is aiming to regain some position after closing mostly lower Thursday afternoon. March feeders are up $0.42 at $183.25, April feeders are up $0.25 at $187.25 and May feeders are up $0.25 at $191.52. The cash cattle market is still in a stiff stand off in the South as feedlots are unwilling to affect packers' current bids. If the South is indeed able to trade cattle higher this week, feeders will likely see that as a positive gesture.

LEAN HOGS:

The immediate lean hog contracts are trading lower but, from the June 2023 contract through the remainder of the 2023 calendar year, the contracts are all trading higher as the market sees greater demand. February lean hogs are down $1.02 at $76.00, April lean hogs are down $0.42 at $86.52 and June lean hogs are up $0.42 at $103.47. It is somewhat surprising to see cash hog prices slightly higher Friday morning as, typically, packers don't support the cash market late in the week, and especially not when they were aggressive early on. But given that packers were complacent in the cash market over the last three weeks, it's apparent that they need to secure more inventory this week.

The projected lean hog index is delayed from the source. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.31 with a weighted average of $70.64, ranging from $63.00 to $73.00 on 5,594 head and a five-day rolling average of $71.04. Pork cutouts total 223.26 loads with 210.47 loads of pork cuts and 12.79 loads of trim. Pork cutout values: down $1.42, $79.04.