GENERAL COMMENTS
It was another mixed day for the livestock complex. The cattle contracts celebrated the corn market's continued weakness, while the lean hog market continued to look for support, which it largely never found. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.11 with a weighted average of $77.91 on 15,122 head. May corn is down 13 1/4 cents per bushel and May soybean meal is down $14.70. The Dow Jones Industrial Average is down 232.39 points.
LIVE CATTLE:
It was another slow and steady day of higher trading for the live cattle complex except for the February contract which expired Tuesday. February live cattle ran $2.50 higher before closing at a new contract high of $167.50. The rest of the nearby live cattle contracts continue to trade higher, but it's not until the December 2023 contract that we see any other contract month trading at $167.00. April live cattle closed $0.50 higher at $165.47, June live cattle closed $0.47 higher at $161.35 and August live cattle closed $0.60 higher at $160.25. The cash cattle market didn't see any trade develop throughout Tuesday's hours, which isn't surprising given that prices are expected to be higher again this week. Trade will likely develop sometime Thursday or Friday, and it's not out of the question to expect prices to be $1.00 to $2.00 stronger. Asking prices in the South are noted at $166-plus but are still not established in the North.
Tuesday's slaughter is estimated at 126,000 head, 1,000 head less than a week and year ago.
Boxed beef prices closed mixed/higher: choice up $0.61 ($288.95) and select unchanged ($279.25) with a movement of 97 loads (54.77 loads of choice, 12.91 loads of select, 17.97 loads of trim and 11.83 loads of ground beef). The choice/select spread sits at $9.70.
WEDNESDAY'S CATTLE CALL: $1.00 to $2.00 higher. It's not likely that cattle will begin to trade on Wednesday, but when they do trade, prices will likely be higher.
FEEDER CATTLE:
The feeder cattle contracts traded higher throughout Tuesday's market as the "perfect storm" continues to unfold before feeders' eyes as live cattle prices continue to creep higher while corn prices fall. With the nearby corn contracts plummeting $0.11 to $0.13 lower by Tuesday's end, traders faced no hard decisions in deciding whether or not the feeder cattle contracts should keep with their upward aim. March feeders closed $0.62 higher at $189.80, April feeders closed $0.85 higher at $195.07 and May feeders closed $0.90 higher at $199.62. At West Point Livestock in West Point, Nebraska, compared to two weeks ago, cattle traded higher throughout the day, but steers traded $8.00 to $10.00 stronger, and heifers sold $6.00 to $8.00 higher. Feeder cattle supply over 600 pounds was 89%. The CME Feeder Cattle Index for Feb. 27: up $0.38, $182.62.
LEAN HOGS:
The lean hog complex traded lower throughout most of Tuesday's market but before closing the spot April contract was able to muster up some modest support. Unfortunately, when looking at the market from a fundamental sense, the cash complex performed OK as producers did sell over 15,000 head, but prices were slightly lower. The lean hog complex didn't walk away with an overall higher carcass price as a $11.98 drop in the belly overshadowed any other gains in the various cuts. Come Wednesday, it wouldn't be surprising to find the market trading mixed to somewhat lower again as demand has been less than hoped for this week. April lean hogs closed $0.45 higher at $85.17, June lean hogs closed $0.37 lower at $101.72 and July lean hogs closed $0.42 lower at $104.10. Pork cutouts totaled 312.09 loads with 283.80 loads of pork cuts and 28.30 loads of trim. Pork cutout values: down $1.58, $84.36. Tuesday's slaughter is estimated at 485,000 head, 6,000 head more than a week and year ago. The CME Lean Hog Index for Feb. 24: up $0.73, $78.22.
WEDNESDAY'S HOG CALL: Lower. Given that pork cutout values didn't close higher Tuesday afternoon, I doubt packers will be eager to support the cash market on Wednesday.
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