Tuesday Closing Livestock Market Update - Cheap Corn Prices Continues to Drive Cattle Higher

GENERAL COMMENTS

It was another mixed day for the livestock complex. The cattle contracts celebrated the corn market's continued weakness, while the lean hog market continued to look for support, which it largely never found. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.11 with a weighted average of $77.91 on 15,122 head. May corn is down 13 1/4 cents per bushel and May soybean meal is down $14.70. The Dow Jones Industrial Average is down 232.39 points.

LIVE CATTLE:

It was another slow and steady day of higher trading for the live cattle complex except for the February contract which expired Tuesday. February live cattle ran $2.50 higher before closing at a new contract high of $167.50. The rest of the nearby live cattle contracts continue to trade higher, but it's not until the December 2023 contract that we see any other contract month trading at $167.00. April live cattle closed $0.50 higher at $165.47, June live cattle closed $0.47 higher at $161.35 and August live cattle closed $0.60 higher at $160.25. The cash cattle market didn't see any trade develop throughout Tuesday's hours, which isn't surprising given that prices are expected to be higher again this week. Trade will likely develop sometime Thursday or Friday, and it's not out of the question to expect prices to be $1.00 to $2.00 stronger. Asking prices in the South are noted at $166-plus but are still not established in the North. 

Tuesday's slaughter is estimated at 126,000 head, 1,000 head less than a week and year ago.

Boxed beef prices closed mixed/higher: choice up $0.61 ($288.95) and select unchanged ($279.25) with a movement of 97 loads (54.77 loads of choice, 12.91 loads of select, 17.97 loads of trim and 11.83 loads of ground beef). The choice/select spread sits at $9.70.

WEDNESDAY'S CATTLE CALL: $1.00 to $2.00 higher. It's not likely that cattle will begin to trade on Wednesday, but when they do trade, prices will likely be higher.

FEEDER CATTLE:

The feeder cattle contracts traded higher throughout Tuesday's market as the "perfect storm" continues to unfold before feeders' eyes as live cattle prices continue to creep higher while corn prices fall. With the nearby corn contracts plummeting $0.11 to $0.13 lower by Tuesday's end, traders faced no hard decisions in deciding whether or not the feeder cattle contracts should keep with their upward aim. March feeders closed $0.62 higher at $189.80, April feeders closed $0.85 higher at $195.07 and May feeders closed $0.90 higher at $199.62. At West Point Livestock in West Point, Nebraska, compared to two weeks ago, cattle traded higher throughout the day, but steers traded $8.00 to $10.00 stronger, and heifers sold $6.00 to $8.00 higher. Feeder cattle supply over 600 pounds was 89%. The CME Feeder Cattle Index for Feb. 27: up $0.38, $182.62.

LEAN HOGS:

The lean hog complex traded lower throughout most of Tuesday's market but before closing the spot April contract was able to muster up some modest support. Unfortunately, when looking at the market from a fundamental sense, the cash complex performed OK as producers did sell over 15,000 head, but prices were slightly lower. The lean hog complex didn't walk away with an overall higher carcass price as a $11.98 drop in the belly overshadowed any other gains in the various cuts. Come Wednesday, it wouldn't be surprising to find the market trading mixed to somewhat lower again as demand has been less than hoped for this week. April lean hogs closed $0.45 higher at $85.17, June lean hogs closed $0.37 lower at $101.72 and July lean hogs closed $0.42 lower at $104.10. Pork cutouts totaled 312.09 loads with 283.80 loads of pork cuts and 28.30 loads of trim. Pork cutout values: down $1.58, $84.36. Tuesday's slaughter is estimated at 485,000 head, 6,000 head more than a week and year ago. The CME Lean Hog Index for Feb. 24: up $0.73, $78.22.

WEDNESDAY'S HOG CALL: Lower. Given that pork cutout values didn't close higher Tuesday afternoon, I doubt packers will be eager to support the cash market on Wednesday.

Tuesday Midday Livestock Market Summary - Cattle Continue to Rally on Excellent Demand and Weakening

GENERAL COMMENTS:

The livestock complex is again trading mixed as the cattle contracts rally on the corn market's weakness, but the lean hog market is still struggling to find footing. Heading into Tuesday afternoon, we'll be watching how pork cutout values close. May corn is down 9 1/2 cents per bushel and May soybean meal is down $14.40. The Dow Jones Industrial Average is down 129.85 points.

LIVE CATTLE:

The live cattle complex is back to trading higher as the market finds comfort in cheaper corn and in strong beef demand. April live cattle are up $0.50 at $165.47, June live cattle are up $0.60 at $161.47 and August live cattle are up $0.67 at $160.32. As the spot April contract begins to pressure the new contract high established last week, traders could hold the market right below that threshold as they'd like to see some support in the cash market before they advance the contracts again. Early asking prices are noted in the South at $166-plus but are still not established in the North. Trade isn't likely to develop until Thursday or later.

Boxed beef prices are higher: choice up $1.41 ($289.75) and select up $1.71 ($280.96) with a movement of 58 loads (27.01 loads of choice, 7.46 loads of select, 14.76 loads of trim and 9.11 loads of ground beef).

FEEDER CATTLE:

Watching the corn complex trend lower has been almost as good as a weeklong trip to the Bahamas for most feedlot managers. The two biggest limiting factors for the feeder cattle market has been inputs (with corn being one of the biggest factors) and the upside potential of the fat cattle market. The fat cattle market has slowly been grinding higher week in and week out, but finally the corn complex is starting to correct. The fact that both factors are trading in a way that helps the feeder cattle market has undoubtedly been noticed by traders. March feeders are up $0.65 at $189.82, April feeders are up $0.82 at $195.02 and May feeders are up $0.85 at $199.57.

LEAN HOGS:

The lean hog complex is trading lower as the market longs to find footing in today's environment. We understand that, come the second half of the year, supplies should be tighter and, with demand also expected to be stronger, that the market stands an excellent chance at again trading higher. However, the touch and go nature of demand in today's market has the lean hog complex holding its breath. April lean hogs are down $0.20 at $84.52, June lean hogs are down $1.00 at $101.07 and July lean hogs are down $0.75 at $103.77. I find it interesting to note that cash hog prices are lower at midday, which could be different by the day's end as packers will likely procure more hogs Tuesday afternoon. Then again, if pork cutout values show any weakness, packer demand could grow cold.

The projected lean hog is unavailable at this time. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.42 with a weighted average of $77.43, ranging from $71.00 to $79.00 on 8,882 head and a five-day rolling average of $77.60. Pork cutouts total 137.60 loads with 125.43 loads of pork cuts and 12.17 loads of trim. Pork cutout values: up $0.81, $86.75.

Tuesday Morning Livestock Market Update - Mixed Trading Activity Expected

Even though the Cattle on Feed report was bullish, the market did what it generally does and that is fade the report. It already had it factored in with traders waiting for cash to develop this week. The strength of cash last week should carry over to this week, but at these lofty levels, one wonders just how much higher prices will go. Cash trading activity last week seemed to be on the light side with trade taking place into Saturday. However, of the cattle purchased last week, 24% were for deferred delivery. With boxed beef prices continuing higher, packers have no choice but to remain aggressive as demand needs to be met. Choice cuts increased $1.06 Monday with select up $2.17. February live cattle futures cease trading today with April taking over as front month.

Hogs tried to hold positive territory but succumbed to selling pressure as the day progressed. The morning reports showed the potential for positive cash and cutouts, but traders were uncertain whether that would hold for the day. The National Direct Afternoon Hog report showed a gain 0f $0.34 while cutouts posted a gain of $0.59. This should provide some support in Tuesday's trading as it indicates packers are interested in purchasing hogs. Technically, the market closed below support, which could open the way for further selling, but positive fundamentals Monday may move futures back above support.

	BULL SIDE		BEAR SIDE
1)	Cattle are expected to trade higher again this week. Supplies are tight and demand is good. Packers will need to purchase what they need and pay the price.	1)	Cattle futures seem to be tired and are having some difficulty continuing to move higher due to the current lofty levels. This could trigger a price retracement.
2)	Boxed beef has been trending higher after a period of time during which prices were weaker. With higher boxed beef, packer margins remain good even though they are paying more for cattle.	2)	Packers were able to purchase some cattle ahead last week which may allow them to be a little less aggressive in the cash market this week.
3)	The week began with packers more aggressive in purchasing hogs similar to last week. Both export and domestic demand may be improving.	3)	Hog futures closed below recent support, which may result in lower trade as sellers may be more aggressive.
4)	The action over the next few days will determine whether hog futures may be forming a head-and-shoulders bottom.	4)	Cutouts need to see more consistency to provide confidence to traders. The uncertainty leaves them less willing to purchase for the long term.

USDA Feb. 1 Cattle on Feed Down 4%

OMAHA (DTN) -- Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on Feb. 1, 2023. The inventory was 4% below Feb. 1, 2022, USDA NASS reported on Friday.

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on Feb. 1, 2023, according to USDA NASS. 

Placements in feedlots during January totaled 1.93 million head, 4% below 2022. Net placements were 1.87 million head. During January, placements of cattle and calves weighing less than 600 pounds were 405,000 head, 600-699 pounds were 420,000 head, 700-799 pounds were 540,000 head, 800-899 pounds were 402,000 head, 900-999 pounds were 100,000 head, and 1,000 pounds and greater were 65,000 head.

Marketings of fed cattle during January totaled 1.85 million head, 4% above 2022.

Other disappearance totaled 63,000 head during January, 2% below 2022.

DTN ANALYSIS

"Friday's Feb. 1 Cattle on Feed report is everything we expected it to be -- bullish, bullish, bullish," said DTN Livestock Analyst ShayLe Stewart. "Regardless of where you choose to spend your time analyzing the report (whether it be the on-feed data, the placement data, the number of cattle marketed, or the report as a whole), one cannot deny how the change in our beef cowherd is affecting this year's market. Seeing bullish reports like this will likely be the theme of the COF reports well through the 2023 calendar year.

"It's logical and easy to understand that we sit with fewer cattle on feed than compared to a year ago, as the nation simply possesses fewer cattle than what it did a year ago and given how strong the fat cattle market is, which is pulling cattle ahead of schedule and out of feedlots sooner than expected. Normally, when looking at COF data, we compare the most recent data to that of a year ago, but given that we all can understand the changes in our market compared to what it was a year ago, I think it's more worth our time to dissect how on-feed and placements are changing month over month.

"On Jan. 1, 2023, there were 11,682,000 head of cattle on feed. On Feb. 1, 2023, there were 11,704,000 head on feed -- a month-over-month increase of 22,000 head, which largely stemmed from Kansas.

"During the month of December 2022, there were 1,784,000 head of feeders placed. During January 2023, there were 1,932,000 head of feeders placed -- which is 4% less than what was placed during January 2022. Seeing more cattle placed in January than in December is logical, as the market only really trades feeder cattle for the first two weeks of December before breaking for Christmas. There were also many producers who opted to hold onto their calves through the end of the year, hoping to find a stronger market in January.

"And during the month of December 2022, there were 1,741,000 head of cattle marketed. Through January 2023, there were 1,847,000 head of cattle marketed -- an increase of 4% compared to a year ago. Incredible beef demand and sharply lower carcass weights have pressured packers into needing to support the cash cattle market more than they'd like to.

"In conclusion, it's extremely encouraging to see the results of Friday's Cattle on Feed report. I know that the report largely focuses on changes year over year, but given the dynamic nature of this market and how quickly things can change, I find great merit in studying the changes month over month to see what trends are developing and how the market is evolving. The market's fundamentals are strong, and prices will likely continue to represent just that."

USDA Actual	Average Estimate	Range
On Feed Feb. 1	96%	96.3%	95.7-99.5%
Placed in January	96%	97.1%	95.5-99.7%
Marketed in January	104%	104.0%	102.7-104.6%

Monday Closing Livestock Market Update - Feeders Rally Thanks to Cheaper Corn Prices

GENERAL COMMENTS

The feeder cattle complex is the only livestock market that clung to its support through closing as the live cattle contracts grew weary and the lean hog complex couldn't muster up any support Monday. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.34 with a weighted average of $78.02 on 7,443 head. So long as corn prices continue to venture lower, the feeder cattle complex sits in a strong position to continue to trade higher. May corn is down 5 3/4 cents per bushel and May soybean meal is up $1.80. The Dow Jones Industrial Average is up 43.48 points.

LIVE CATTLE:

The live cattle complex traded hesitantly throughout Monday's market. One would have thought that the market's excellent demand, combined with last week's $2.00 to $5.00 advancement in the cash market, would have been enough to send the contracts higher, but given the elevated price point that the contracts are trading, traders are patiently waiting to see how the week's developments unfold. April live cattle closed $0.40 lower at $164.97, June live cattle closed $0.20 lower at $160.87 and August live cattle closed $0.12 lower at $159.65. Monday's slaughter is estimated at 124,000 head, incomparable to last week but 1,000 head less than a year ago. New showlists appear to be higher in major feeding states.

Last week's negotiated cash cattle trade waited to develop until Thursday and Friday. Northern dressed traded ranged from $257 to $262, but was mostly at $260 to $262, which is $3.00 to $5.00 higher than the previous week. Southern live cattle traded for $164 to $164.50, which is $2.00 to $2.50 higher than the previous week's weighted average.

Last week's negotiated cash cattle trade totaled 81,059 head. Of that, 76% (61,295 head) were committed for the nearby delivery while the remaining 24% (19,764 head) were committee for the deferred delivery.

Boxed beef prices closed higher: choice up $1.06 ($288.34) and select up $2.17 ($279.25) with a movement of 69 loads (47.84 loads of choice, 8.63 loads of select, zero loads of trim and 12.12 loads of ground beef).

TUESDAY'S CATTLE CALL: Higher. Given that beef demand continues to thrive and show extreme consumer interest, cash cattle prices will likely be higher again this week a packers will need more cattle to fulfill upcoming kills.

FEEDER CATTLE:

The feeder cattle complex traded higher throughout most of Monday as the market rallied on the continued decline of corn prices and on the positive nature of last Friday's Cattle on Feed report. March feeders closed $0.10 higher at $189.17, April feeders closed $0.65 higher at $194.22 and May feeders closed $0.67 higher at $198.72. The market's upward charge is well supported as it's seeing technical support from traders, and it's seeing ample fundamental support as buyers continue to aggressively buy both feeder cattle and calves in sale barns across the country. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week at their midsession point, feeder steers were trading steady to $2.00 higher, while feeder heifers were trading $2.00 to $5.00 higher. Steer calves were selling mostly steady while heifer calves were trading mostly $3.00 to $5.00 stronger, with heifers weighing 400 to 500 pounds selling up to $15.00 higher. Feeder cattle supply over 600 pounds is 52%. The CME Feeder Cattle Index for Feb. 24: down $0.53, $182.24.

LEAN HOGS:

The lean hog complex closed mixed as the market's nearby contracts struggled to find footing throughout Monday's trade, but the deferred contracts closed slightly higher. April lean hogs closed $1.30 lower at $84.72, June lean hogs closed $1.37 lower at $102.10 and July lean hogs closed $1.30 lower at $104.52. Seeing strong afternoon pork cutout prices could help traders feel more confident about the market's demand outlook, but prices will need to show consistent support in order for traders to pick up prices again throughout the futures complex. The afternoon carcass prices was able to close higher as the butt gained $3.06, the loin gained $2.40 and the rib gained $1.40, which more than offset the $1.71 decline in hams. Pork cutouts totaled 270.50 loads with 250.26 loads of pork cuts and 20.24 loads of trim. Pork cutout values: up $0.59, $85.94. Monday's slaughter is estimated at 482,000 head, incomparable to a last week but 30,000 head more than a year ago. The CME Lean Hog Index for Feb. 23: down $0.24, $77.49.

TUESDAY'S HOG CALL: Slightly higher. Given that pork cutout values showed a slight increase Monday afternoon, and last week's export report was strong, packers could sense a stronger need for pork and support the cash market come Tuesday.

Monday Midday Livestock Market Update - Cattle Continue to Venture Higher as Corn Prices Weaken

GENERAL COMMENTS:

The livestock complex is trading mixed into Monday's afternoon as both the live cattle and feeder cattle contracts are trading higher thanks to Friday's supportive Cattle on Feed report and Monday's weaker corn complex. The lean hog complex is somewhat skeptical of Monday's marketplace as traders yearn to see what demand will be this week. May corn is down 4 1/4 cents per bushel and May soybean meal is up $0.60. The Dow Jones Industrial Average is up 49.20 points.

LIVE CATTLE:

The live cattle complex is trading higher into Monday's noon hour as the market continues to rally on strong fundamentals. The combination of strong beef demand and thin market-ready supplies of fat cattle will continue to propel prices higher into this week's market. April live cattle are up $0.45 at $165.82, June live cattle are up $0.52 at $161.60 and August live cattle are up $0.52 at $160.30. New showlists appear to be higher in major feeding states.

Last week's negotiated cash cattle trade waited to develop until Thursday and Friday. Northern dressed traded ranged from $257 to $262, but was mostly at $260 to $262, which is $3.00 to $5.00 higher than the previous week. Southern live cattle traded for $164 to $164.50, which is $2.00 to $2.50 higher than the previous week's weighted average.

Boxed beef prices are mixed: choice down $0.32 ($286.96) and select up $1.97 ($279.05) with a movement of 39 loads (28.31 loads of choice, 5.11 loads of select, zero loads of trim and 6.07 loads of ground beef).

FEEDER CATTLE:

It took the feeder cattle contracts longer than I expected to trade higher, but now that traders have had enough time to absorb last week's Cattle on Feed report and are noting the continued decline in corn prices, feeders are trading fully higher into Monday's noon hour. March feeders are up $0.70 at $189.77, April feeders are up $1.35 at $194.97 and May feeders are up $1.22 at $199.27. Even though the feeder cattle contracts are breaking into new territory and rallying to new price points, the upward surge is likely to continue as supplies are feeder cattle are limited and the closer the calendar gets to spring and green grass, demand for both feeders and calves will likely get stronger.

LEAN HOGS:

The lean hog complex is stepping into Monday's trade cautiously as traders try to gauge what demand will be this week. Last week the market was supported by an extremely strong export sales report, but seeing stable, constant support in afternoon pork cutout values remains the gray area of the market. April lean hogs are down $0.70 at $85.32, June lean hogs re down $0.77 at $102.70 and July lean hogs are down $0.70 at $105.12.

The projected lean hog index for Feb. 24 is up $0.73 at $78.22 and the actual index for Feb. 23 is down $0.24 at $77.49. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.02 with a weighted average of $77.85, ranging from $71.00 to $79.00 on 4,759 head and a five-day rolling average of $77.72. Pork cutouts total 129.83 loads with 118.37 loads of pork cuts and 11.46 loads of trim. Pork cutout values: up $4.29, $89.64

Monday Morning Livestock Market Update - Cattle Futures Expected Higher

GENERAL COMMENTS:

The cattle complex drifted into the close Friday with traders waiting for the Cattle on Feed report. Even though cash traded higher on limited activity by the close of trading, traders had evened up their positions for the report. Cash traded higher than expected with some trade in Nebraska recorded as much as $5.00 higher with some light trade in Texas about $2.50 higher. Weekly export sales were somewhat dismal at 15,400 metric tons (mt), down 45% from the previous week. Boxed beef did not provide much support with choice down $0.63 and select up $1.21. The focus was on the report. The report was bullish as cattle on feed on Feb. 1 was 96% compared to the average estimate of 96.3%. Placements in January were 96% compared to the average estimate of 97.1%. Marketings were right in line with the estimate at 104%. It will be an interesting day as some of the report was already factored in while at the same time the low exports sales will also be a part of the equation as it was not traded Friday. I think the market will open higher and then could settle back once traders have repositioned themselves again.

Hog futures showed strength at the beginning of Friday but succumbed to benign fundamentals. Weekly export sales were extremely strong at 51,900 mt, up 16% from the previous week. China continues to purchase significant volumes of pork. Packers might be a bit more aggressive in the cash market due to recently strong export sales. In fact, cash is expected to be higher Monday. The National Direct Afternoon Hog report on Friday showed cash up $0.15. Higher cash is unusual for a Friday and might provide support Monday. However, cutouts were lower, down $0.68. The Commitments of Traders report is finally again being released, but they will be playing catch up and releasing them as they can to become current. The one released Friday was for Feb. 3 and rather meaningless now. I will not be reporting the numbers until they catch up as they can change substantially from week to week.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report was bullish and should result in a higher opening. Numbers are tightening and that is not going to change anytime soon.	1)	Low beef export sales may be traded Monday as they were not in focus on Friday. Traders were too engrossed in the upcoming Cattle on Feed report.
2)	Live cattle futures continue to make new contract highs, supported by continued strong cash.	2)	Higher cash cattle and bullish reports may have been factored in, leaving a buy the rumor, sell the fact reaction.
3)	Large weekly pork export sales indicated international demand is increasing, which may require packers to be more aggressive to meet demand.	3)	Not even very strong export sales could turn hog futures higher. Traders do not see long-term positive fundamentals.
4)	Hog futures may be building support as they have been sideways for two weeks. A better cash market might increase the buying interest of traders.	4)	Hog supplies have not yet tightened, leaving plentiful supplies readily available to the market. Packers have not had to be aggressive.

Friday Closing Livestock Market Update - Livestock Futures Struggle but Fundamentals Remain Strong

GENERAL COMMENTS

The livestock complex faced some hesitancy throughout the day and closed mostly lower, but the market's fundamental outlook remains extremely positive, especially in regard to the cattle complex. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.15 with a weighted average of $77.68 on 7,149 head. May corn is down 10 cents per bushel and May soybean meal is up $2.00. The Dow Jones Industrial Average is down 336.99 points.

From Friday to Friday, livestock futures scored the following changes: February live cattle up $1.63, April live cattle up $0.72; March feeder cattle up $2.55, April feeder cattle up $3.13; April lean hogs up $0.75, June lean hogs up $0.75; March corn down $0.28, May corn down $0.28.

LIVE CATTLE:

Even though only the nearby live cattle contracts closed higher, it was a good day for the live cattle market. For starters, Friday's Cattle on Feed report was everything that producers hoped for, and it's likely that, on Monday, when traders have a chance to trade the report's findings, that the contracts trade higher. Secondly, the tenacious nature of the cash cattle market is riveting. Some light dressed trade was reported in Nebraska Friday afternoon at $262, which is $5.00 higher than last week's weighted average, and live deals in Nebraska were marked at $162 to $164, which is $4.00 higher than last week's weighted average in Nebraska. At the time of closing Friday, only a handful of cattle have been traded in the South, mainly in Texas at $164.50, which is $2.50 higher than last week's weighted average. Needless to say, the live cattle market remains extremely bullish and it's likely that come next week the market keeps with its upward momentum. 

Friday's slaughter is estimated at 122,000 head, 1,000 head more than a week ago and 5,000 head more than a year ago. Saturday's slaughter is projected to be around 18,000 head. This week's slaughter is estimated at 618,000 head, 9,000 head less than a week ago and 33,000 head less than a year ago.

Beef net sales of 15,400 mt for 2023 were down 45% from the previous week and 35% from the prior four-week average. The three largest buyers were China (4,300 mt), South Korea (2,800 mt) and Japan (2,200 mt).

Boxed beef prices closed mixed: choice down $0.63 ($287.28) and select up $1.21 ($277.08) with a movement of 95 loads (63.60 loads of choice, 6.70 loads of select, 13.85 loads of trim and 10.57 loads of ground beef). The choice/select spread sits at $10.20.

MONDAY'S CATTLE CALL: Higher. With market ready supplies of cattle as thin as they are and with carcass weights deteriorating, prices will be higher again next week.

FEEDER CATTLE:

One would have logically thought that, with the corn contracts closing $0.09 to $0.12 lower in the nearby months, the feeder cattle contracts would have rallied aggressively throughout the day, but that wasn't Friday's story. With the live cattle contracts trading mostly lower throughout Friday's hours, the feeder cattle market traded cautiously as it wanted to see how the afternoon Cattle on Feed report fared. Rhe report shared a 4% decline in the number of cattle on feed, and a 4% decline year over year in the number of feeders placed during January. This news should drive the feeder cattle contracts higher on Monday, especially when traders see what the cash cattle market did Friday afternoon. The Oklahoma Weekly Cattle Auction Summary shared that, compared to a week ago and throughout the entire state, feeder steers traded steady to $2.00 higher, and feeder heifers traded $2.00 to $4.00 stronger. Stocker cattle sold $3.00 to $8.00 higher. Steer and heifer calves sold steady to $5.00 higher. Slaughter cows sold $3.00 to $4.00 higher and slaughter bulls traded $5.00 higher. Feeder cattle supply over 600 pounds was 52%. The CME Feeder Cattle Index for Feb. 23: up $0.20, $182.77.

LEAN HOGS:

The lean hog market wasn't able to shake the doggish nature of Friday's trading complex and ultimately rounded out the week lower. April lean hogs closed $0.17 lower a $86.02, June lean hogs closed $0.47 lower at $103.47 and July lean hogs closed $0.40 lower at $105.82. One would have thought that the day's extremely supportive export report would have been enough to turn the market higher, but obviously traders didn't think so. Pork cutout values did close slightly lower, which mainly came as the rib fell $2.27 and the ham fell $1.76. Cheap corn prices will help pork producers, and so long as pork demand doesn't get any weaker, the complex stands a excellent chance at trading higher again. Pork cutouts totaled 296.49 loads with 272.35 loads of pork cuts and 24.14 loads of trim. Pork cutout values: down $0.68, $85.35. Friday's slaughter is estimated at 467,000 head, 11,000 head less than a week ago and 5,000 head less than a year ago. Saturday's slaughter is projected to be around 167,000 head. The CME Lean Hog Index for Feb. 22: up $0.20, $77.73.

Pork net sales of 51,900 mt for 2023 were up 16% from the previous week and 39% from the prior four-week average. The three largest buyers were Mexico (25,000 mt), China (12,100 mt) and Japan (4,000 mt).

MONDAY'S HOG CALL: Higher. It's not like packers to show the cash hog market much interest on Friday, and so seeing that they bought 7,149 head Friday and were willing to up the market by $0.15, it likely means that they need hogs. Normally packers wait until Tuesday/Wednesday to show the cash market much attention, but given that they scouted out hogs on Friday, they could be active again in Monday's market.

Friday Midday Livestock Market Summary - Doggish Tones Push Contracts Lower

GENERAL COMMENTS:

Friday marks the one-year point when Russia invaded Ukraine, and thus far it hasn't been a good day for the livestock complex either. It's natural to expect the live cattle market to trade timidly ahead of the afternoon's Cattle on Feed report, but given that corn prices are still traipsing lower, one would expect feeders to be higher and, with a tremendous export sales report of pork, one would expect the lean hog market to be trading higher as well. May corn is down 8 1/2 cents per bushel and May soybean meal is up $0.90. The Dow Jones Industrial Average is down 358.87 points.

LIVE CATTLE:

The live cattle contracts are trading lower as the market tries to shake the doggish nature of Friday's complex, but thus far hasn't been successful in doing so. Friday afternoon's Cattle on Feed report is expected to be extremely supportive to the market as on feed and placement numbers are anticipated to be lighter than a year ago, while marketings are projected to be up 3%-4%. Traders are trying to remain patient with the cash cattle market, but at this point, still no more trade has developed. Bids of $164 are currently being offered in Kansas, and bids of $260 in Nebraska, but otherwise the market remains extremely quiet. Asking prices are around $165-plus in the South and $262-plus in the North.

Beef net sales of 15,400 mt for 2023 were down 45% from the previous week and 35% from the prior four-week average. The three largest buyers were China (4,300 mt), South Korea (2,800 mt) and Japan (2,200 mt).

Boxed beef prices are higher: choice up $0.40 ($288.31) and select up $0.78 ($276.65) with a movement of 57 loads (36.01 loads of choice, 4.13 loads of select, 9.19 loads of trim and 7.50 loads of ground beef).

FEEDER CATTLE:

It's maddening to watch the feeder cattle complex trade lower as the corn contracts continue to drift $0.08 to $0.10 lower in their nearby contracts. It's not helping matters that the live cattle market is trading lower, but with the newest Cattle on Feed report set to be released Friday afternoon, it's not surprising either as traders are pulling back from the market ahead of its release. March feeders are down $0.72 at $188.52, April feeders are down $0.62 at $193.05 and May feeders are down $0.45 at $197.27.

LEAN HOGS:

The lean hog complex is trending lower into Friday's afternoon despite receiving a rather supportive export report Friday morning. April lean hogs are down $0.05 at $86.12, June lean hogs are down $0.70 at $103.25 and July lean hogs are down $0.65 at $105.57. It's interesting to see that packers are paying a little attention to the cash market as morning prices are slightly higher and they've bought a little over 5,500 head. A wet blanket seems to be draped across the entire livestock complex, and if, for some reason, it's removed before closing, the lean hog complex could grow stronger and trade higher as it's fundamentals are sound.

The projected lean hog index for Feb. 23 is down $0.14 at $78.04, and the actual index for Feb. 22 is up $0.65 at $78.18. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.46 with a weighted average of $77.83, ranging from $69.00 to $79.00 on 5,549 head and a five-day rolling average of $77.79. Pork cutouts total 193.54 loads with 184.04 loads of pork cuts and 9.50 loads of trim. Pork cutout values: down $1.47, $84.56.

Pork net sales of 51,900mt for 2023 were up 16% from the previous week and 39% from the prior four-week average. The three largest buyers were Mexico (25,000 mt), China (12,100 mt) and Japan (4,000 mt).

Friday Morning Livestock Market Update - Cash Cattle Trade Higher This Week

GENERAL COMMENTS:

Cash cattle trade was expected higher this week and there has been light trade indicating that is the case. Some trade in the North took place between $1.00 to $3.00 higher. Southern cattle also showed very light activity $2.00 higher. Packers remain reluctant even though boxed beef prices have been strong. Thursday, choice cuts were steady at $287.91 with select gaining $2.23 at $275.87. Packers have been waiting to do business for some reason, even though cash cattle will not get any less expensive. The Cattle on Feed report today may keep futures in a position of two-sided trading until the numbers are seen. On feed numbers are estimated at 96.1%, placements at 97.2%, and marketings at 104.0%.

Hog futures spent much of the day in negative territory but managed to come back at the end of the day with May through August closing higher. The prospect for higher cutouts looked promising and traders took a chance on a positive afternoon report. That was received as cutouts gained $2.98 with bellies again providing support with a gain of $10.02. Cash was lower but the decline was minimal with the National Direct Afternoon Hog report down $0.27. The general pattern is that traders will trade the direction of cutouts the following day. The trading action late Thursday would indicate this might be the case. Bullish traders are desperately searching for support.

	BULL SIDE		BEAR SIDE
1)	New contract highs were established across live cattle contracts Thursday, keeping the market bullish.	1)	Proof of greater export business due to the ban on Brazilian beef to China will need to be seen or that card will be taken off the table.
2)	The suspension of Brazilian beef shipments to China may increase export business while the ban is in place.	2)	New contract highs cannot take place indefinitely and with the market being overbought, a retracement is likely.
3)	Pork cutouts have been higher overall this week. There could be a trend developing with support building.	3)	Hogs have been unable to find consistent fundamental support. This has kept the market choppy.
4)	Reduced slaughter might improve cutout prices. It is uncertain whether reduced slaughter is just for packers to improve margins or if supplies are tightening.	4)	Weekly export sales will need to be good, or traders could liquidate positions into the weekend.

USDA Livestock Outlook - Smaller Cattle Herd, but Stronger Live Cattle Prices Forecast for 2023

ARLINGTON, Va. (DTN) -- The U.S. cattle herd is forecast to further decline in 2023, USDA economists stated on Thursday.

USDA's price outlook for livestock projects 10% higher cattle prices in 2023 due to a smaller cattle herd, but lower prices for hogs and poultry as swine and broiler production rise

That smaller cattle herd, however, is forecast to push up fed cattle prices an average of 10.1% to $159 per hundredweight (cwt) for 2023, according to USDA. The smaller cattle herd will also increase imports of live cattle.

All told, USDA forecasts total U.S. red meat and poultry production will decline slightly from a record 107.5 billion pounds in 2022 to 106.9 billion pounds of red meat and poultry production for 2023. If realized, it will be the first decline in total red meat and poultry production since 2014.

USDA released its Outlook for Livestock and Poultry production on Thursday as part of the department's Outlook Forum.

SMALLER CATTLE HERD EXPECTED

Pointing to cattle producers retaining 6% fewer replacement heifers for the beef cow herd this year, USDA projects 5% fewer beef heifers to calve in 2023.

"We are in the contraction phase of the cattle cycle," Seth Meyer, USDA's chief economist, said in his opening speech at the forum.

Western drought and high feed prices "make them (producers) uncertain about expansion," Meyer said. He added, "I think drought will continue to play a role on those cattle (numbers)."

USDA cited current data "would suggest increasingly declining placements and lower feedlot numbers throughout 2023."

The declining U.S. supplies also will result in higher imports of live cattle. USDA expects cattle imports will hit 2.1 million head in 2023, up 500,000 head from 2022's imports of 1.6 million cattle.

Cattle shrink is large enough to outstrip an increase in swine and poultry production, USDA forecast.

USDA forecasts lower feed prices, as the department projects corn, soybean and wheat prices will decline in 2023. Corn prices are projected to fall from an average of $6.70 a bushel for the 2022-23 crop to $5.60 a bushel for the 2023-24 crop. Soymeal prices are projected to fall from an average of $450 per ton to $410 per ton as well.

Still, USDA also cites that hay stocks on Dec. 1, 2022, were at 71.9 million tons, down 9% from a year earlier. Major cattle-producing states such as Texas, Oklahoma and Nebraska all had lower hay stocks.

HOGS AND PORK

Citing the Quarterly Hogs and Pigs report, USDA pointed out 1% fewer sows in the second half of 2022, but producers also indicated they intend to farrow more hogs in the second half of 2023.

All told, USDA forecasts total commercial pork production in 2023 at 27.4 billion pounds, about 2% higher than 2022. After a dip in 2022, commercial hog slaughter will rise, as will carcass weights. "Favorable feed prices compared to the previous year and continued demand for pork are likely to provide incentives to feed to heavier weights."

Pork producers will see prices fall with lean hog prices in 2023 projected at $66.50 per cwt, down from an average of $71.21 in 2022, a decline of about 6.6%.

Pork exports fell 10% in 2022 to 6.34 billion pounds because of lower demand, mainly from China, but also Japan, Canada and Colombia. Those losses were offset some by higher demand in Mexico, South Korea and the Dominican Republic. USDA projects 2023 exports will increase slightly from 2022 to about 6.35 billion pounds -- still below 2021 levels.

Pork imports are projected at 1.01 billion pounds, down about 25% from 2022 levels.

BROILERS AND EGGS

Despite the continued risks from highly pathogenic avian influenza (HPAI), USDA projects broiler production in 2023 will bump up 1% to a record 46.7 billion pounds.

USDA cites more broiler-egg placements in the third quarter of 2022, driven partially by recovery efforts from avian influenza. So far, broiler placements in early 2023 are higher than the same period last year.

Broiler exports in 2023 are also expected to increase fractionally to 7.32 billion pounds. There will be more supply, but some exports will continue to be constrained because of restrictions from countries concerned about HPAI.

The average broiler price will come in at $1.27 per pound in 2023, about 10% lower than in 2022.

Eggs have become the focus of food inflation in the last several months because of HPAI losses. USDA projected egg production will increase 4% in 2023 to 9.4 billion dozen eggs. Table egg production will reach 8.1 billion dozen, about 5% higher than in 2022, but still below the record volume from 2019.

"While not quite there yet, a full recovery in the laying flock is expected in the coming year," USDA stated.

Table egg prices moved from an average wholesale price in New York in January 2022 of $1.24 a dozen to a peak of $5.40 a dozen in mid-December. For 2023, USDA expects egg prices will come down to $2.07 a dozen.

Thursday Closing Livestock Market Update - Cheaper Corn Sends Cattle Higher

GENERAL COMMENTS

It was a dynamic day for the cattle complex as the corn market's deterioration helped propel both the live cattle and feeder cattle contracts higher. And, even though the lean hog complex saw mixed support through closing, a near $3.00 gain in pork cutout values should help the market's more come Friday. Weekly export data will be released Friday morning, and Friday afternoon the newest Cattle on Feed report will be unveiled. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.27 with a weighted average of $77.53 on 6,182 head. March corn is down 13 3/4 cents per bushel and May soybean meal is up $0.50. The Dow Jones Industrial Average is up 145.07 points.

LIVE CATTLE:

The slow and steady grind that's stair stepped the live cattle market higher continued through Thursday's trade. The onset of significantly lower corn prices, mixed with the bullish news of strong live cattle prices shared in Thursday's USDA Livestock Outlook, helped contribute to the market's ability to carve out yet another contract high in the spot April contract. April live cattle closed $0.25 higher at $165.32, June live cattle closed $0.17 higher at $161.27 and August live cattle closed $0.20 higher at $160.10. Bids sat on the table all day, but feedlots were reluctant to accept packers' offers. With Friday's Cattle on Feed report expected to be bullish for the market, feedlots are wanting to wait the week out to see what all they can get. Southern asking prices are noted at $165 plus and $262 plus in the North. A handful of trade did develop in the North at $258 to mostly $260, which is $1.00 to $3.00 higher than last week, and a few Southern live cattle traded for $164, which is $2.00 higher than last week's weighted average. More trade will need to develop on Friday. 

Thursday's slaughter is estimated at 121,000 head, 2,000 head less than a week and year ago.

Thursday's actual slaughter data shared that, for the week ending Feb. 11, steers averaged 902 pounds, which is 6 pounds less than the previous week and 16 pounds lighter than a year ago. For the same week, heifers averaged 828 pounds, which is 5 pounds lighter than the week before and 20 pounds lighter than a year ago.

Boxed beef prices closed steady/higher: choice steady ($287.91) and select cut $2.23 ($275.87) with a movement of 107 loads (80.21 loads of choice, 12.75 loads of select, zero loads of trim and 13.61 loads of ground beef). The choice/select spread sits at $12.04.

FRIDAY'S CATTLE CALL: Higher. Given how strong beef demand is, packers will need and want to procure the cattle necessary for their upcoming kills.

FEEDER CATTLE:

It was a glorious day for the feeder cattle complex as the corn market withered away in fear of the USDA's Grain Outlook, which projects more corn acres to be planted and for corn prices to be cheaper in the year ahead. DTN's Senior Market Analyst Dana Mantini said Thursday's USDA Outlook Forum reported "corn acres for 2023-24 are expected to rise to 91 million acres from 88.6 in 2022-23, and yield at 181.5 bushels per acre, with a crop of 15.09 bb and ending stocks of 1.887 bb compared to 1.267 in the 2022-23 crop year -- up 620 mb. The average farmgate price is forecast to drop by $1.10 to $5.60 per bushel." Input prices have been one of the biggest limiting factors to the feeder cattle market's upside potential, so upon hearing that corn prices could be lower, the market made haste and rallied. March feeders closed $1.25 higher at $189.22, April feeders closed $1.92 higher at $193.67 and May feeders closed $2.10 higher at $197.72. At Winter Livestock Auction in Pratt, Kansas, at their midsession point compared to last week, feeder steers weighing 700 to 950 pounds sold $3.00 to $5.00 higher. Feeder heifers weighing 700 to 900 pounds were selling $1.00 to $2.00 higher. Feeder cattle supply over 600 pounds was 84%. The CME Feeder Cattle Index for Feb. 22: down $0.03, $182.57.

LEAN HOGS:

The lean hog complex closed mixed but most of its nearby contracts were able to keep mild gains ahead of the day's end. April lean hogs closed $0.35 lower at $86.20, June lean hogs closed $0.15 higher at $103.95 and July lean hogs closed $0.22 higher at $106.22. It was a mostly encouraging day for the complex as the USDA Livestock Outlook shared exciting export news for the market, and pork cutout values finished the day higher too. The jump in pork cutout values stemmed from a $10.02 gain in the belly, but also from a $5.01 gain the ham, and the butt, picnic and rib all saw gains over $1.00, which helped continue to the $2.98 advancement in the carcass. Pork cutouts totaled 227.90 loads with 212.73 loads of pork cuts and 15.17 loads of trim. Pork cutout values: up $2.98, $86.03. Thursday's slaughter is estimated at 371,000 head, 104,000 head less than a week ago and 107,000 head less than a year ago. Wednesday's hog slaughter was revised to 409,000 head. The CME Lean Hog Index for Feb. 21: up $0.77, $77.53.

FRIDAY'S HOG CALL: Lower. With processing speeds cut drastically back, it's not likely that packers will show the cash market much interest on Friday. 

Thursday Midday Livestock Market Summary - Cattle Venture Higher With the Onset of Cheaper Corn

GENERAL COMMENTS:

It's been a slow going Thursday morning for the livestock complex as cash cattle traders wait for bids to develop and lean hog enthusiasts hope that afternoon pork cutout values close higher and show the market that demand is still strong. No bids are currently noted in the cash cattle market as packers and feedlots are in a stiff standoff. March corn is down 11 1/4 cents per bushel and May soybean meal is down $1.50. The Dow Jones Industrial Average is down 215.15 points.

LIVE CATTLE:

It's been a mostly quiet Thursday morning for the live cattle market even though the spot April contract is flirting with the idea of hitting yet another new contract high. The cash cattle market hasn't seen any trade develop as feedlots are willing to wait the week out to the bitter end, as they believe this week's Cattle on Feed report could add another bullish feather the market's hat. Asking prices in the South remain firm at $164 to $165 in the South and are still not established in the North. It was interesting to note in the morning's USDA Livestock Outlook that the 5-area steer prices for 2023 is forecasted to average a record of $159.00, which is approximately $15.00 per cwt above 2022's average prices and it eclipses the previous record set in 2014. That supportive news has encouraged feedlots and trades alike this morning and it's likely that we don't see much more cash cattle trade until Friday. April live cattle are up $0.50 at $165.57, June live cattle are up $0.32 at $161.42 and August live cattle are up $0.20 at $160.10.

Boxed beef prices are higher: choice up $0.63 ($288.54) and select up $2.84 ($276.48) with a movement of 40 loads (26.02 loads of choice, 4.42 loads of select, zero loads of trim and 9.93 loads of ground beef).

FEEDER CATTLE:

With corn prices trending $0.06 to $0.08 lower, the feeder cattle contracts have wasted no time shooting at least $1.00 higher throughout most of the contracts. March feeders are up $0.80 at $188.75, April feeders are up $1.55 at $193.30 and May feeders are up $1.72 at $197.35. DTN's Senior Market Analyst, Dana Mantini said Thursday's USDA Outlook Forum reported that, "corn acres for 2023-24 are expected to rise to 91 million acres from 88.6 in 2022-23, and yield at 181.5 bushels per acre, with a crop of 15.09 bb and ending stocks of 1.887 bb compared to 1.267 in the 2022-23 crop year -- up 620 mb. The average farmgate price is forecast to drop by $1.10 to $5.60 per bushel." With high inputs being potentially the biggest limiting factor in the feeder cattle business, hearing that more acres are expected to be planted in corn and that prices could be cheaper lent some relief immediately to the feeder cattle market.

LEAN HOGS:

While the cattle contracts continue to charge higher, the lean hog complex is seeing yet another day of downward pressure. April lean hogs are down $0.87 at $85.70, June lean hogs are down $0.35 at $103.45 and July lean hogs are down $0.40 at $105.60. It's good to see midday pork cutout values higher, but what really matters is how the afternoon prices fare. It was encouraging to read Thursday morning in the USDA Livestock Outlook that exports in 2023 are forecasted to be slightly above 2022 levels at 6.35 billion pounds, which could help lean hog prices gain momentum.

The projected lean hog index is delayed from the source. Hog prices on the Daily Direct Morning Hog Report average $77.37, ranging from $68.00 to $83.00 on 4,362 head and a five-day rolling average of $77.42. Pork cutouts total 103.65 loads with 95.16 loads of pork cuts and 8.49 loads of trim. Pork cutout values: up $3.58, $86.63.

Thursday Morning Livestock Market Update - Brazil to Halt Beef Exports to China

GENERAL COMMENTS:

Even with the current optimism of higher cash prices and strong boxed beef, traders would like to see confirmation of higher prices. A few cattle had traded in Nebraska on Tuesday at $1.00 higher, but so far, feedlots have rejected any bids by packers. Packers are over a barrel with lighter showlists and tightening numbers. Boxed beef was higher with choice up $0.71 and select up $2.80. The possible atypical BSE case that was being tested in Brazil on Wednesday was confirmed as BSE. Even though this form has no risk of spreading to the herd or humans, Brazil is halting beef exports to China beginning Thursday. This is just a precaution and part of the health pact agreed on between China and Brazil. This halt is expected to be temporary, but it will have a significant impact as China is the largest export destination for Brazilian beef. It is unclear whether China will turn to U.S. beef in the interim. That may depend on the duration. The Cattle on Feed report will be released Friday. On feed numbers are estimated at 96.1%, placements at 97.2%, and marketings at 104.0%

Hogs have been moving higher overall, but are having a difficult time finding consistency. A large portion of Tuesday's gains were eliminated Wednesday. Cash was lower on the National Direct Afternoon Hog report with a loss of $0.32. Cutouts closed only $0.04 higher after showing strong gains at the midday print. The movement of hogs has been, and is being, hindered by the large winter storm which has so far resulted in an estimated Saturday slaughter of 128,000 head. That is expected to increase significantly over the next day as hogs have not been able to be delivered. Packers are expected to have purchased sufficient hogs, leaving them less aggressive on the cash market the rest of the week.

	BULL SIDE		BEAR SIDE
1)	Expected higher cash cattle trade will keep futures trending higher. Feedlots will hold for higher prices, giving the current tight supply.	1)	Boxed beef prices might be nearing price resistance soon as high prices cure high prices.
2)	Boxed beef prices continue to advance on strong demand and packers will need to meet that demand while at the same time trying to purchase some cattle for deferred delivery.	2)	The confirmation of atypical BSE in Brazil may not have much impact on the market, similar to what took place in 2021 when they reported two cases.
3)	Hog futures held some of their gains and slightly higher cutouts Wednesday might provide some support.	3)	Pork cutouts need to find some consistency before traders will become more friendly to the market. The volatility of cutouts so far this week has been incredible.
4)	The BSE case in Brazil will not directly impact pork demand. However, with tighter U.S. beef supplies and higher prices, China could increase their pork imports to make up some of the difference.	4)	The failure to follow-through Wednesday makes it difficult for traders to want to buy into the market for the long term.

Wednesday Closing Livestock Market Update - Cautious Traders Leave the Complex Mixed

GENERAL COMMENTS

Traders weren't overly aggressive through Wednesday's market as they wanted to see how pork demand fared through closing, and desperately want to see what the cash cattle market accomplishes this week. Because the markets were closed on Monday, this week's export report won't be shared until Friday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.32 with a weighted average of $77.80 on 5,033 head. March corn is down 6 1/2 cents per bushel and May soybean meal is down $4.10. The Dow Jones Industrial Average is down 173.76 points.

LIVE CATTLE:

The live cattle complex closed mixed but a vast majority of the contracts closed higher. The spot April contract closed a mere $0.02 lower ahead of the day's end as traders seemed to stall out ahead of closing, as they want to see how cash cattle prices fare this week. There was a thin test that developed late Tuesday afternoon in Nebraska, where cattle sold live for $160 to $161 (which is steady to $1.00 higher than the previous week's weighted average) and in Iowa cattle traded for $164, which is $3.00 higher than the previous week's weighted average. Beside that small volume, which accumulated late Tuesday afternoon, the market has yet to see any more cattle trade. Currently bids of $162 live and $259 dressed are being offered in Nebraska but otherwise the market is quiet and no more cattle have traded. On Friday, the newest Cattle on Feed report will be released, which could be another strong driver of the live cattle/cash cattle market as on feed numbers and placements are expected to be lower with extremely aggressive marketings. It wouldn't be surprising to see trade hold off until that report is shared as feedlots want to drive prices higher. April live cattle closed $0.02 lower at $165.07, June live cattle closed $0.22 higher at $161.10 and August live cattle closed $0.22 higher at $159.90. 

Wednesday's slaughter is estimated at 126,000 head, 1,000 head more than a week and year ago.

Boxed beef prices closed higher: choice up $0.71 ($287.91) and select up $2.80 ($273.64) with a movement of 97 loads (60.13 loads of choice, 13.07 loads of select, 14.06 loads of trim and 9.68 loads of ground beef).

THURSDAY'S CATTLE CALL: $2.00 to $3.00 higher. With beef demand showing no sign of weakening, prices will be higher again this week.

FEEDER CATTLE:

The feeder cattle complex closed higher as the market rallied on the corn complex's weakness and on the hope that cash cattle prices will trade higher. March feeders closed $1.10 higher at $187.97, April feeders closed $0.95 higher at $191.75 and May feeders closed $0.75 higher at $195.62. Friday's Cattle on Feed report is expected to unveil lighter on feed numbers and fewer placements than a year ago. If that is indeed the case (which it should be) the feeder cattle market will likely be able to trade higher early next week as the cattle market's strong fundamentals continue to drive prices higher. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, feeder steers and heifers traded steady to $3.00 higher. Steer and heifer calves traded $3.00 to $7.00 higher. Feeder cattle supply over 600 pounds was 50%. The CME Feeder Cattle Index for Feb. 21: up $0.01, $182.60.

LEAN HOGS:

The lean hog complex struggled to gain footing in Wednesday's market as traders were leery of advancing the contracts any more after Tuesday's aggressive run, and as they needed to see how pork demand fared through the afternoon. Pork cutouts did indeed close higher Wednesday afternoon which came with the loin gaining $1.57 and the butt gaining $1.45. April lean hogs closed $2.55 lower at $86.55, June lean hogs closed $1.47 lower at $103.80 and July lean hogs closed $1.15 lower at $106.00. Pork cutouts totaled 234.37 loads with 209.99 loads of pork cuts and 24.39 loads of trim. Pork cutout values: up $0.04, $83.05. Wednesday's slaughter is estimated at 428,000 head, 55,000 head more than a week ago and 46,000 head more than a year ago. The CME Lean Hog Index for Feb. 20: up $0.35, $76.76

THURSDAY'S HOG CALL: Lower. Given that packers bought aggressively in Tuesday's market, and then turned around showed very little interest in Wednesday's market, it likely means that they're done buying for the week.

Wednesday Midday Livestock Market Summary - Slightly Higher Tones Lead Live Cattle and Feeder Cattle Higher

GENERAL COMMENTS:

The livestock complex is trading mixed into Wednesday's afternoon as the market sees support in the cattle complex, but the lean hog market isn't seeing the momentum that carried its market higher on Tuesday. This afternoon traders will be closely watching to see how pork cutout prices fair and to see if any cash cattle trade develops. March corn is down 4 3/4 cents per bushel and May soybean meal is down $3.80. The Dow Jones Industrial Average is up 86.13 points.

LIVE CATTLE:

The live cattle complex is a split market heading into Wednesday afternoon as the nearby contracts are trading mildly higher while the deferred contracts are trading slightly lower. There has been news that a mad cow disease case is currently being investigated in Brazil, which could affect the U.S. beef market as the nation was expecting to receive more Brazilian beef imports in 2023. April live cattle are trading steady at $165.10, June live cattle are trading $0.22 higher at $161.10 and August live cattle are trading $0.22 higher at $159.90. A few bids are being offered in Nebraska at $162 live and $259 dressed. There was a little bit of trade that developed late Tuesday afternoon in Nebraska, where cattle sold live for $160 to $161 (which is steady to $1.00 higher than the previous week's weighted average) and in Iowa cattle traded for $164, which is $3.00 higher than the previous week's weighted average. Beside the small volume, which accumulated late Tuesday afternoon, the market has yet to see any more cattle trade. Southern asking prices remain firm at $164-plus and are still not established in the North.

Boxed beef prices are higher: choice up $1.42 ($288.62) and select up $2.05 ($272.89) with a movement of 56 loads (40.15 loads of choice, 6.19 loads of select, 2.87 loads of trim and 6.50 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts are rallying modestly into Wednesday's noon hour as the market welcomes cheaper corn prices and applauds the modest rally taking place throughout the live cattle contracts. March feeders are up $0.82 at $187.70, April feeders are up $0.75 at $191.55 and May feeders are up $0.75 at $195.62. So long as the market's fundamentals don't change (strong cattle vs. weak corn) the feeder cattle contracts should face no issue closing higher by Wednesday's end.

LEAN HOGS:

After an aggressive rally throughout Tuesday's trade, the lean hog complex is now trending lower as the market hopes that consumer support carries into the day's closing pork cutout report. Tuesday's market would have been a perfect day in the eyes of the market but, by the day's end, the futures complex had closed higher, cash prices were higher, but cutout values didn't receive the same support. Fast forward to Wednesday's trade, traders seem more cautious in their approach to the market as they long to see what Wednesday afternoon's cutout values will accomplish. April lean hogs are down $2.47 at $86.62, June lean hogs are down $1.80 at $103.47 and July lean hogs are down $1.57 at $105.57.

The projected lean hog index is delayed from the source. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality issues. We can however see that 3,465 have traded and that the five-day rolling average sits at $77.44. Pork cutouts total 135.67 loads with 124.56 loads of pork cuts and 11.11 loads of trim. Pork cutout values: up $3.18, $86.19.

Wednesday Morning Livestock Market Update - Possible BSE in Brazil Again

GENERAL COMMENTS:

Probably the knee-jerk reaction news was the announcement from Brazil's Agricultural Ministry that they are investigating a possible case of atypical mad-cow disease. Tests are currently being done for confirmation. There were two cases of atypical BSE confirmed in 2021, which resulted in China banning imports of beef from Brazil for a period. This could be a big deal if it was confirmed and the same takes place. It would mean more demand from the U.S. with an already tighter supply. The other aspect is a strong potential for higher cash this week. Boxed beef was up strongly Tuesday with choice up $4.31 and select up $2.79. There is no reason feedlots will not hold out for higher cash. The general consensus is the upcoming Cattle on Feed report will continue to show a contraction of the cattle herd providing support.

Hog futures started the day higher and never looked back. Strong cutout prices and higher cash on Monday set the bullish tone. Short-covering as stops were hit propelled the market through technical resistance to the highest close since Jan. 10 in the April contract Tuesday. Cash was higher again on the National Direct Afternoon Hog report with a gain of $0.15. The concern was the large decline of cutout values Tuesday with price down $4.71. This is still a gain so far this week as it was up $5.63 on Monday. It is difficult to say whether traders will trade the weakness of cutouts Tuesday or if they will wait to see what Wednesday's values will show.

	BULL SIDE		BEAR SIDE
1)	New highs in the cattle keep the uptrend very much alive. Strength will provide confidence for feedlots to hold for more cash.	1)	If the potential case of BSE is not confirmed after testing and there is no ban on Brazilian beef, the market could fall back.
2)	If the BSE case is confirmed in Brazil, China could again stop imports of their beef, potentially increasing the demand for U.S. beef at a time when supplies are tightening.	2)	Live cattle already have an increase of cash this week factored in, leaving traders looking ahead to the Cattle on Feed report.
3)	Two days of stronger cash at the beginning of the week would suggest demand for pork may be increasing and packers need to purchase more aggressively.	3)	The drop of pork cutouts is of concern and may put pressure back on the market again.
4)	If this is the first day of a short-covering rally, then there may be about two more days of strong gains as short-covering most often runs its course over about three days.	4)	The strong gains in hogs Tuesday will need to be supported by fundamentals to continue. Technical trading can only take the market to a certain extent

Tuesday Closing Livestock Market Update - Higher Tones Stick With Complex

GENERAL COMMENTS

It was a powerful day for the livestock complex as all three of the livestock markets closed higher thanks to ample trader interest and strong market fundamentals. Heading into Wednesday's market, keeping an eye on consumer demand via boxed beef prices and pork cutouts will be imperative. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.15 with a weighted average of $78.12 on 17,162 head. March corn is up 2 3/4 cents per bushel and March soybean meal is up $6.60. The Dow Jones Industrial Average is down 657.71 points.

LIVE CATTLE:

The dynamic nature of the cattle market has begun an upward trek as we forecast what the market could accomplish in the next two to three years, I believe that the market's previous highs will indeed be tested. What's helped the rallying nature of the cattle market thus far through 2023 is not only the limited supply of cattle, but also the unwavering demand from that we've seen from consumers. With packers seeing more support than assumed through February, it's likely that they'll have to stay engaged and active in the cash market to ensure that they have enough cattle for their upcoming kills. Cash cattle prices should be higher again this week, and trade won't likely develop until Thursday or Friday. Trade could be slow to develop this week not only because feedlots will want to see higher prices, but also because Friday will unveil another Cattle on Feed report. Early asking prices are noted in the South at $164 plus but are still unestablished in the North. 

Tuesday's slaughter is estimated at 127,000 head, 2,000 head more than a week ago and year ago.

Boxed beef prices closed higher: choice up $4.31 ($287.20) and select up $2.79 ($270.84) with a movement of 114 loads (69.31 loads of choice, 21.57 loads of select, 9.30 loads of trim and 13.95 loads of ground beef). The choice/select spread sits at $16.36.

WEDNESDAY'S CATTLE CALL: $1.00 to $2.00 higher. With demand as vibrant as it is, packers will likely continue to stay engaged in the cash market as they want to ensure that they have enough cattle for their scheduled kills. Market-ready supplies of cattle are still thin so prices should trade higher.

FEEDER CATTLE:

Corn prices may have closed higher ($0.02 to $0.03 stronger in the nearby contracts) but the bullish nature of the cattle complex outpowered the negativity that higher corn prices have on the feeder cattle market. March feeders closed $0.35 higher at $186.87, April feeders closed $0.35 higher at $190.80 and May feeders closed $0.52 higher at $194.87. With the live cattle/cash cattle market establishing new contract highs, and new cash cattle highs for the year almost weekly, the feeder cattle complex can't help but to continue to trade higher as the bullish nature of the cattle market begins to fire. Feeder cattle sales could be affected this week as some parts of the North are being blasted with a blistery winter storm. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week, feeder steers traded steady to $2.00 higher, but the steers weighing 650 to 700 pounds sold sharply higher as they sold $10.00 to $14.00 stronger. Feeder heifers traded $4.00 to $7.00 higher, and steer and heifer calves sold $4.00 to $7.00 higher. Feeder cattle supply over 600 pounds was 54%. The CME Feeder Cattle Index for Feb. 20: up $0.38, $182.59.

LEAN HOGS:

The lean hog contracts saw the biggest day over day gains out of all the livestock contracts on Tuesday. The supportive nature of better-than-assumed consumer demand has encouraged traders to advance the market and that's exactly what took place Tuesday. Afternoon pork cutout values did close lower, but the drastic decline in prices is largely because of the $26.98 drop in bellies. It will be important to monitor pork cutout values the rest of the week to decipher if Tuesday's decline was one day of tough news or if consumers are starting to purchase other products. I tend to believe that the first option in the case here. April lean hogs closed $3.82 higher a $89.10, June lean hogs closed $2.55 higher at $105.27 and July lean hogs closed $2.55 higher at $107.15. Pork cutouts totaled 260.96 loads with 241.17 loads of pork cuts and 19.79 loads of trim. Pork cutout values: down $4.71, $83.01. Tuesday's slaughter is estimated at 479,000 head, 2,000 head more than a week ago and 8,000 head more than year ago. The CME Lean Hog Index for Feb. 17: up $0.32, $76.41.

WEDNESDAY'S HOG CALL: Steady. Packers were aggressive in Tuesday's cash market, which could mean that prices could trend either way come Wednesday. 

Tuesday Midday Livestock Market Summary - Strong Demand Helps Keep Contracts Trading Higher

GENERAL COMMENTS:

The livestock complex is off to a strong start for the new week as all three of the livestock markets are trading higher into Tuesday's afternoon. For both the pork and beef markets, phenomenal demand has helped keep the live cattle and lean hog contracts trading higher as demand has been more robust than anyone assumed. March corn is up 1 cent per bushel and March soybean meal is up $5.10. The Dow Jones Industrial Average is down 565.60 points.

LIVE CATTLE:

The live cattle complex is keeping with its upward trend as the market trades $0.25 to $0.60 higher into Tuesday's noon hour. The sheer demand from consumers has been incredible thus far through 2023, and so long as consumer demand holds, packers will likely remain active participants in the cash market, which continues to give traders the confidence they need to progress the contracts higher. April live cattle are up $0.27 at $164.92, June live cattle are up $0.60 at $160.72 and August live cattle are up $0.40 at $159.45. Cash cattle prices will likely be higher again this week as supplies are thin and packers need cattle. A few early asking prices are noted in the South at $164 plus but are still not established in the North.

Last week's negotiated cash cattle trade totaled 76,616 head. Of that 77% (59,190 head) were committed for the nearby delivery, while the remaining 23% (17,426 head) were committed for the deferred delivery.

Boxed beef prices are higher: choice up $3.83 ($286.72) and select is up $2.57 ($270.62) with a movement of 51 loads (31.26 loads of choice, 11.18 loads of select, zero loads of trim and 8.78 loads of ground beef).

FEEDER CATTLE:

As the corn complex has tamed its momentum rolling into Tuesday's market, the feeder cattle contracts have gained strength as the market looks to its cattle counterpart (the live cattle contracts) and notes its higher trend. Heading into Tuesday's noon hour, the corn contracts are trading mostly steady, which isn't putting too much pressure on the feeder cattle contracts. So long as feeders can continue to see demand in the countryside and support from the live cattle/cash cattle market, higher prices across the board are attainable. Some sales in South Dakota have canceled their weekly feeder cattle auction for the week as they prepare for a blistery snowstorm. March feeders are up $0.45 at $186.97, April feeders are up $0.52 at $190.92 and May feeders are up $0.75 at $195.10.

LEAN HOGS:

The lean hog complex hasn't tiptoed gingerly into Tuesday's market as the complex has boldly run higher right from the day's start. April lean hogs are up $3.65 at $88.92, June lean hogs are up $2.35 at $105.07 and July lean hogs are up $2.50 at $107.10. The interest from traders, combined with the steady support of consumers, has allowed the hog market to gain stability and turn its trading trend higher. So long as consumer support remains vibrant in this week's market, the complex shouldn't struggle to keep its upward trend.

The projected lean hog index for Feb. 18 is up $0.35 at $76.76, and the actual index for Feb. 17 is up $0.32 at $76.41. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.88 with a weighted average of $77.76, ranging from $75.00 to $80.00 on 7,889 head and a five-day rolling average of $76.99. Pork cutouts total 158.75 loads with 146.75 loads of pork cuts and 12.01 loads of trim. Pork cutout values: up $0.27, $87.99.

Tuesday Morning Livestock Market Update - Feedlots Remain Positive

GENERAL COMMENTS:

Feedlots held for the win last week with cash trading higher. Waiting it out resulted in Southern trade $2.00 higher while Northern trade was $2.00 - $3.00 higher. Even when packers are able to purchase an amount of cattle for deferred delivery, they still cannot avoid that fact that market ready cattle are not plentiful and higher prices are what is needed to purchase what is available. The same is going to be true this week as cattle numbers and fundamentals are not going to change anytime soon unless there is some unforeseen event that would be of major consequence. Boxed beef continues to show strength after a rocky start to the year with choice up $1.49 and select up $3.25 on Friday. Markets were not open Monday, but choice cutouts gained $1.85 with select up $2.16. The Cattle on Feed report will be released Friday, keeping some thoughts focused on that.

Hogs could not get much going Friday with contracts through October lower and later contracts slightly higher. Trade seemed to drift with little interest ahead of the three-day weekend. Weaker cash and cutouts did not help generate any excitement. The National Direct Afternoon Hog report showed cash down $0.33. Cutouts lost $0.97 to finish the week on a negative tone. However, the previous National Direct Afternoon Hog report showed cash up $1.48. Cutouts showed an impressive gain of $5.63 with bellies leading the charge higher, posting a gain of $25.03. This should have a positive influence on the trading activity Tuesday.

	BULL SIDE		BEAR SIDE
1)	Higher cash is expected again this week as packers are not able to purchase supply without paying more.	1)	The cattle market is overbought and funds are likely extremely long, which could trigger some selling ahead of the Cattle on Feed report.
2)	Feedlots do not have an abundance of cattle walking around that just have to be moved. Marketings are current and are not being pulled forward.	2)	Boxed beef prices may reach buyer resistance at some point as consumers continue to see high food prices.
3)	Hog slaughter is holding well, and pork is moving. Futures seem to have found support after setting the lows of about two weeks ago.	3)	Hog futures settled back the second half of the week, unable to find support to continue early strength.
4)	Strong cash and cutouts should be positive for trade Tuesday. It is usually traded the following day after the final print of the previous day is reported.	4)	There needs to be more consistent strength of cash and cutouts before the market will trend higher.