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.
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