GENERAL COMMENTS
It was a mixed day for the livestock complex as the live cattle market rallied on the wins the cash cattle market made, but both the feeder cattle and lean hog markets faced some resistance. Hog prices closed lower on the Daily Direct Afternoon Hog report, down $0.33 with a weighted average of $76.49 on 6,241 head. March corn is up 1 3/4 cents per bushel and March soybean meal is down $0.30. The Dow Jones Industrial Average is up 129.84 points.
Friday to Friday, livestock futures scored the following changes: February live cattle up $2.38, April live cattle up $0.70; March feeder cattle up $0.13, April feeder cattle down $0.22; April lean hogs up $1.95, June lean hogs up $1.08; March corn down $0.03, May corn down $0.01.
LIVE CATTLE:
Throughout Friday, the live cattle contracts traded higher as traders noted the strong price advancements made in the cash sector and continue to note the resilient nature of boxed beef prices. April live cattle closed $0.57 higher at $164.65, June live cattle closed $0.40 higher at $160.12 and August live cattle closed $0.27 higher at $159.05. As of midday on Friday, the volume of cash cattle traded in the South has been extremely thin. More trade will likely need to develop ahead of the week's end or next week's market will need to move considerably more cattle. Throughout the week Northern dressed cattle traded for a range of $252 to $258, but mostly at $256 which is $2.00 to $3.00 higher than last week's weighted average. In the South live cattle have traded for mostly $162 which is $2.00 higher than last week's weighted average. So long as demand remains high, the cash cattle market will likely keep with this upward trek.
Friday's slaughter is estimated at 121,000 head, 1,000 head less than a week and year ago. Saturday's slaughter is projected to be around 7,000 head. This week's slaughter is estimated at 627,000 head, 3,000 head less than a week ago and 43,000 head less than a year ago.
Boxed beef prices closed higher: choice up $1.49 ($281.04) and select up $3.25 ($265.89) with a movement of 70 loads (40.14 loads of choice, 10.23 loads of select, 7.20 loads of trim and 12.54 loads of ground beef). Throughout the week choice cuts averaged $275.66 ($7.77 higher than last week) and select cuts averaged $260.94 (up $6.44 from last week) and the week's total movement of cuts, grinds and trim totaled 506 loads.
TUESDAY'S CATTLE CALL: Higher. Fed cattle supplies are thin, and with demand being as strong as it is, packers will likely stay engaged and active in the cash market.
FEEDER CATTLE:
The feeder cattle complex continued to weigh the different signals it received from the live cattle/cash cattle market against the rallying corn prices. Beef demand remains incredibly strong, which has propelled cash cattle prices higher and given feeders hope that paying for these high inputs will work out in the end. March feeders closed $0.30 higher at $186.52, April feeders closed $0.15 lower at $190.45 and May feeders closed $0.12 lower at $194.35. I think it's interesting to note that both steer calf and feeder prices were lower compared to a week ago while heifer calf and feeder prices were slightly higher. The build back of our cowherd hasn't started yet, but buyers are more interested in females as they market them several different ways. The Oklahoma Weekly Cattle Auction Summary shared that, throughout the state when compared to last week, feeder steers traded $2.00 to $4.00 lower, while feeder heifers traded $3.00 to $6.00 higher. Steer calves sold steady to $2.00 lower while heifer calves traded $3.00 to $6.00 higher. Feeder cattle supply over 600 pounds was 55%. The CME Feeder Cattle Index for Feb. 16: down $0.40, $182.63.
LEAN HOGS:
The lean hog complex closed lower in most of its nearby contracts while its deferred contracts kept their modest gains through closing. One could point to the fact that both cash prices and pork cutout values closed lower, but the pullback in pork cutout values wasn't anything substantial and, when you take into account Thursday's strong export report, demand is still better off than originally assumed. Friday's weakness in the futures complex likely stemmed from the fact that corn prices were slightly higher and that traders let the market grow quite after advancing it aggressively early this week. April lean hogs closed $0.50 lower at $85.27, June lean hogs closed $0.42 lower at $102.72 and July lean hogs closed $0.35 lower at $104.60. Pork cutouts totaled 188.52 loads with 175.89 loads of pork cuts and 12.64 loads of trim. Pork cutout values: down $0.97, $82.09. Friday's slaughter is estimated at 478,000 head, 2,000 head more than a week ago and 16,000 head more than a year ago. Saturday's slaughter is projected to be around 107,000 head. The CME Lean Hog Index for Feb. 15: up $0.23, $75.85.
TUESDAY'S HOG CALL: Higher. Given that demand has been strong, packers could advance prices as early as Tuesday.
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