GENERAL COMMENTS
It was a mixed Thursday for the livestock complex with only the feeder cattle contracts being able to post gains while the live cattle and lean hog contracts traded lower. Come Friday, all eyes and ears will be on the cash cattle market to see what it accomplishes this week. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.80 with a weighted average of $78.70 on 12,801 head and five-day rolling average of $78.59. May corn is down 2 cents per bushel and May soybean meal is up $2.00. The Dow Jones Industrial Average is up 341.73 points.
LIVE CATTLE:
The live cattle market waited, and waited, and then waited some more, only to find that, by Thursday's end, still no cash cattle have traded. Traders understand that the longer feedlots sit back and wait for packers to grow anxious, the more likely it is for cash prices to trade higher, but that doesn't mean that waiting isn't painful. The combination of not seeing any developments yet in the cash market, combined with Thursday morning's lousy export report, led the live cattle contracts to a lower close. April live cattle closed $1.02 lower at $164.10, June live cattle closed $1.15 lower at $159.45 and August live cattle closed $0.95 lower at $158.72. A single bid was offered throughout the day in Nebraska at $262, but no one jumped at its arrival. Asking prices remain firm in the South at $166-plus and are still not established in the North. Thursday's slaughter is estimated at 125,000 head, 4,000 head more than a week ago but 1,000 head less than a year ago.
Beef net sales of 8,100 mt for 2023 were down 48% from the previous week and 62% from the prior four-week average. The three largest buyers were Japan (2,600 mt), Taiwan (2,300 mt) and China (1,500 mt).
Thursday's actual slaughter data shared that, for the week ending Feb. 18, steers averaged 906 pounds, which is 4 pounds heavier than the previous week, but still 15 pounds lighter than a year ago. For the same week, heifers averaged 828 pounds, which is steady with the previous week but 21 pounds lighter than a year ago.
Boxed beef prices closed higher: choice up $0.67 ($288.50) and select up $1.15 ($277.58) with a movement of 101 loads (77.08 loads of choice, 9.22 loads of select, zero loads of trim and 12.47 loads of ground beef).
FRIDAY'S CATTLE CALL: $1.00 to $2.00 higher. Given that feedlots have been so committed to waiting the week out, it's unlikely that they let any cattle trade for any price less than steady.
FEEDER CATTLE:
The feeder cattle contracts used Thursday's market as an opportunity to trade higher with the nearby corn contracts closing slightly lower. March feeders closed $0.27 higher at $188.57, April feeders closed steady at $193.85 and May feeders closed $0.17 lower at $198.82. If and when cash cattle begin to trade on Friday, the feeder cattle market could gain some support from their trade as seeing cheaper corn prices and higher cash cattle prices is a feeder's dream. At Winter Livestock in Pratt, Kansas, at their midsession point and when compared to last week, feeder steers and heifers weighing 700 to 900 pounds sold steady to $3.00 lower, but both thin fleshed and fancy cattle sold $2.00 higher. Feeder cattle supply over 600 pounds was 92%. The CME Feeder Cattle Index for March 1: not available at this time.
LEAN HOGS:
Even with pork cutout values having closed higher for the past two days in a row, the lean hog contracts still closed lower. April lean hogs closed $1.10 lower at $83.85, June lean hogs closed $0.22 lower at $100.57 and July lean hogs closed $0.35 lower at $102.72. The day's export report came as a mildly supportive gesture that wasn't strong enough to push traders into believing that the contracts should indeed trade higher. It's not surprising to see that cash prices closed lower as packers were extremely aggressive in Wednesday's market. Pork cutouts totaled 303.48 loads with 262.84 loads of pork cuts and 40.64 loads of trim. Pork cutout values: up $0.19, $85.73. Thursday's slaughter is estimated at 486,000 head, 115,000 head more than a week ago 9,000 head. The CME Lean Hog Index for Feb. 28: up $0.07, $78.58.
Pork net sales of 31,000 mt for 2023 were down 40% from the previous week and 21% from the prior four-week average. The three largest buyers Mexico (13,400 mt), South Korea (4,500 mt) and Japan (4,300 mt).
FRIDAY'S HOG CALL: Lower. Cash hog prices will likely be lower on Friday as packers have been active in the cash market earlier this week.
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