GENERAL COMMENTS
It was a disappointing day for the livestock complex, as early on the cattle contracts set out to trade higher but ended up closing lower alongside the lean hog contracts. Outside pressure continues to drive the contracts lower as traders struggle to trust the market's fundamentals when there are looming concerns about the U.S. banking system. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.15 with a weighted average of $76.46 on 5,522 hogs. May corn closed down 1 1/4 at $6.33 and May soybean meal closed down $3.30 at $462.7. The Dow Jones Industrial Average is up 382.60 at 32,244.58.
LIVE CATTLE:
It was another disappointing day for the live cattle complex as the market had hopes of trading higher but as time passed by, traders grew less comfortable with the idea and allowed their fears to push the live cattle contracts lower. April live cattle closed $0.30 lower at $162.025, June live cattle closed $0.88 lower at $155.525 and August live cattle closed $0.65 lower at $155.75. It will be interesting to see what feedlots do this week as they too cratered to the market's fears last week. Given that boxed beef prices are seeing a little more support early this week, I suspect feedlots are going to work to market their pens more aggressively this week. New showlists appear to be mixed, somewhat higher in Kansas, somewhat lower in Texas, and lower in Nebraska/Colorado. Monday's slaughter is estimated at 125,000 head, steady with a week ago and 5,000 head more than a year ago.
Last week live cattle have traded for $164, and dressed cattle have traded for $264, both of which are $1.00 lower than last week's weighted average. Last week's negotiated cash cattle trade totaled 76,283 head. Of that, 71% (54,038 head) were committed for the nearby delivery, while the remaining 29% (22,245 head) were committed for the deferred delivery.
Boxed beef prices closed mixed: choice down $2.33 ($281.02) and select up $1.50 ($273.94) with a movement of 107.27 loads (82.03 loads of choice, 11.16 loads of select, 4.96 loads of trim and 9.12 loads of ground beef).
TUESDAY'S CATTLE CALL: $1.00 higher. It's unlikely that cattle trade as early as Tuesday but when cattle do begin to see interest from packers this week, I believe prices will be higher as feedlots know that market-ready supplies are still in short supply, and with demand as strong as it is, cash prices should continue to trade steady/higher.
FEEDER CATTLE:
The feeder cattle contracts tried to trade higher throughout the day, but as the day grew longer, pressure continued to build and ultimately left the feeder cattle contracts closing lower. Traders undoubtedly noted the supportive nature of Friday's Cattle on Feed report as they did trade the market higher up until noon, but once the live cattle complex turned and began to trade lower, feeders stood little chance at keeping their positive momentum. March feeders closed $0.65 lower at $188.2, April feeders closed $0.03 lower at $194.625 and May feeders closed $0.80 lower at $199.15. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, at their midsession point and compared to last week, feeder steers were traded steady to $3.00 higher with the biggest advancements being seen on the heavier weights. Feeder heifers were traded steady to $3.00 lower, while heifer calves were holding steady. Feeder cattle supply over 600 pounds was 44%. The CME Feeder Cattle Index for March 17: up $0.14, $188.01.
LEAN HOGS:
The lean hog complex endured yet another painstaking day as the market began Monday's first hour lower and closed with the same doggish tone. There's been news reported that African swine fever is again increasing in China, which could mean that the U.S. hog market is given an opportunity to export more product, but that reality has yet to dig the lean hog market out of its current hole. April lean hogs closed $2.10 lower at $77.775, June lean hogs closed $1.45 lower at $91.875 and July lean hogs closed $1.45 lower at $94.175. However, it was encouraging to see pork cutout values close slightly higher, as any support in the hog sector will be gladly taken. The biggest day over day gains were seen in the ham, as it jumped $2.28. Pork cutouts totaled 318.14 loads with 285.88 loads of pork cuts and 32.26 loads of trim. Pork cutout values are up $0.69 at $81.64. Monday's slaughter is estimated at 477,000 head, 7,000 head less than a week ago and 8,000 head more than a year ago. The CME Lean Hog Index for March 16: up $0.06, $80.01
TUESDAY'S HOG CALL: Lower. Packers will need to procure some more hogs this week, but it wouldn't be surprising to see them wait until Wednesday to get aggressive in the cash market when they have a better sense of what the immediate demand picture looks like.
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