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.
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