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.
No comments:
Post a Comment