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.
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