GENERAL COMMENTS
It was tremendous day for the livestock complex as traders approached the marketplace with gusto and drove all three of the livestock markets higher. The feeder cattle complex saw the biggest daily gains, but higher tones were noted throughout all the contracts. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.74 with a weighted average of $75.84 on 5,993 hogs. May corn closed up 5 1/4 at $6.483 and May soybean meal closed up $0.90 at $446.00. The Dow Jones Industrial Average is up 194.55 at 32,432.08.
LIVE CATTLE:
The live cattle contracts rallied throughout Monday's market as traders finally looked beyond the concerns of the U.S. banking system and opted to focus on the market's strong fundamentals. It was rather impressive that the spot June contract closed above the market's 100-day moving average and was only short $0.38 to closing steady with the market's 40-day moving average. If traders can keep with this upward momentum, the cash cattle market should have no issue trading higher. April live cattle closed $1.90 higher at $164.9, June live cattle closed $2.28 higher at $158.875 and August live cattle closed $2.18 higher at $158.6. Monday's slaughter is estimated at 125,000 head, steady with a week ago and 5,000 head more than a year ago. New showlists appear to be mixed, lower in Texas, Nebraska and Colorado but somewhat higher in Kansas.
Last week's negotiated cash cattle trade totaled 84,955 head. Of that, 75% (64,049 head) were committed for the nearby delivery, while the remaining 25% (20,906 head) were committed for the deferred delivery. The bulk of last week's trade took place on Wednesday with a little light scattered trade reported on Thursday. Northern dressed deals ranged from $262 to $268, mostly $264 to $265, steady to $1 higher than the prior week's weighted average basis Nebraska. Southern live trade was at $162 to mostly $163, $1 lower than the previous week's weighted averages.
Boxed beef prices closed mixed: choice up $0.48 ($280.36) and select up $0.97 ($269.72) with a movement of 70.66 loads (40.68 loads of choice, 8.21 loads of select, 4.56 loads of trim and 17.21 loads of ground beef).
TUESDAY'S CATTLE CALL: $1.00 to $2.00 higher. With the futures market finally coming back to terms with the market's strong fundamentals, feedlots should have no issue trading cash cattle higher, especially if boxed beef prices are bottoming and finding support.
FEEDER CATTLE:
It was a barnburner type of day for the feeder cattle complex as all of the contracts closed $2.00 to $3.00 higher. It was quite encouraging to see that the feeder cattle contracts continued to trade higher even though the corn complex jumped $0.05 to $0.09 higher in its nearby contracts. But as traders look at the feeder cattle market, there's one thing that's become undeniably true: supplies are thin now and are only going to become thinner the close we get to the second half of the year. Also, please note the CME Feeder Cattle Index close of $191.24 -- the last time the CME Feeder Cattle Index closed in the $190s was back in 2015. March feeders closed $2.70 higher at $192.35, April feeders closed $2.83 higher at $197.625 and May feeders closed $3.83 higher at $201.375. At the Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week and at the midsession point, feeder steers were selling $3.00 to $5.00 higher, but 600 weights were selling up to $12.00 and $16.00 higher. Steer calves were selling steady to $4.00 higher. Feeder heifers were trading steady to $1.00 higher and heifer calves were selling $6.00 to $8.00 higher. Feeder cattle supplies over 600 pounds was 53%. The CME Feeder Cattle Index for March 24: up $2.39, $191.24.
LEAN HOGS:
It was invigorating to see the lean hog complex trade higher right beside both the live cattle and feeder cattle contracts. It is important to note that pork demand has seen more constant support over the last three trading days, which has encouraged traders all the more to push the contracts higher. Pork cutout values closed higher with a hefty $4.01 gain in the bellies helping offset a decrease in the loin (down $1.72), the butt (down $0.92) and the ham (down $0.89). June lean hogs closed $1.65 higher at $93.075, June lean hogs closed $1.65 higher at $93.075 and July lean hogs closed $1.58 higher at $95.15. Pork cutouts totaled 349.03 loads with 301.90 loads of pork cuts and 47.13 loads of trim. Pork cutout values are up $0.17 at $81.22. Monday's slaughter is estimated at 486,000 head, 27,000 head more than a week ago and 8,000 head more than a year ago. The CME Lean Hog Index for March 23: down $0.40, $76.99.
TUESDAY'S HOG CALL: Higher. With pork cutout values seeing more support, the cash hog market could see more support on Tuesday.
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