GENERAL COMMENTS
It was a mixed day for the livestock complex as both the live cattle and feeder cattle contracts finally found support and were able to close higher, but the lean hog market fell substantially lower. The cash cattle market was quiet throughout most of Thursday which means more trade will need to develop on Friday. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.37 with a weighted average of $78.83 on 5,354 hogs. May corn closed up 6 1/4 at $6.328 and May soybean meal closed down $4.40 at $474.00. The Dow Jones Industrial Average is up 371.98 at 32,246.55.
LIVE CATTLE:
Live cattle traders finally looked at the fear mongering taking place throughout the market and opted to trade the market's strong fundamentals. What's disappointing about this week's performance is not just that futures prices have trended lower, but that the market's weakness affected the cash complex too. If feedlots would have been patient and waited to trade cattle until after Friday's bullish Cattle on Feed report, there's a strong possibility that prices could have remained steady as opposed to trading $1.00 lower. The cash market was extremely quiet throughout Thursday's market with merely no new trade developing. Thus far this week, Southern live cattle have sold for mostly $164, which is $1.00 lower than last week's weighted average, and Northern dressed cattle traded for $264, which is also $1.00 lower than last week's weighted average. April live cattle closed $0.80 higher at $162.35, June live cattle closed $0.30 higher at $156.875 and August live cattle closed $0.23 higher at $156.575.
Thursday's slaughter is estimated at 123,000 head, 1,000 head less than a week ago and steady with a year ago.
Beef net sales of 17,700 mt for 2023 were up noticeably from the previous week and up 24% from the prior four-week average. The three largest buyers were South Korea (5,300 mt), Japan (3,200 mt) and Taiwan (2,600 mt).
Thursday's actual slaughter data shared that, for the week ending March 4, steers averaged 899 pounds, which is 3 pounds lighter than a week ago and 20 pounds less than a year ago. For the same week, heifers averaged 829 pounds which is 2 pounds less than a week ago and 19 pounds less than the same week a year ago.
FRIDAY'S CATTLE CALL: Steady. Unfortunately, even though some feedlots seem to be waiting to see if they can get $1.00 more or so out of packers by waiting the week out, given that packers have already bought around 62,000 head, it's going to be tough to get much more money out of this week's market given that the trend is set.
FEEDER CATTLE:
The feeder cattle complex traded higher throughout Thursday's market as traders opted to look to the market's fundamentals instead of continuing to push the fear rhetoric of our shaken economy and the banking system. The feeder cattle contracts had it tough as corn prices closed higher too, but after falling lower over the last four days, feeders finally found technical support and closed higher. March feeders closed $1.30 higher at $189.5, April feeders closed $1.90 higher at $195.15 and May feeders closed $1.48 higher at $200.275. At Winter Livestock Auction in Pratt, Kansas, at their midsession point and when compared to last week, feeder steers weighing 700 to 950 pounds were selling $3.00 to $4.00 lower. Feeder heifers weighing 700 to 900 pounds were selling steady to $2.00 lower. There weren't enough cattle under 700 pounds to accurately portray a true market test. Feeder cattle supply over 600 pounds was 97%. The CME Feeder Cattle Index for March 14: down $0.68, $188.71.
LEAN HOGS:
If you thought the lean hog market had endured a tough week before Thursday, just know you hadn't seen anything yet! Thursday was an utter bloodbath for lean hog complex as existing support planes were broke through and all the contracts closed $2.00 to $4.00 lower. April lean hogs closed $4.30 lower at $79.45, June lean hogs closed $4.75 lower at $93.475 and July lean hogs closed $4.75 lower at $96.1. Thursday's massive selloff largely stems from the continued concern over our economy and banking system. And in a situation like this, little else seems to matter. Pork Cutouts totaled 352.22 loads with 320.36 loads of pork cuts and 31.86 loads of trim. Pork cutout values are down $1.89 at $84.49. Thursday's hog slaughter is estimated at 485,000 head, steady with a week ago and 7,000 head more than a year ago. The CME Lean Hog Index for March 14: up $0.04, $79.93
Pork net sales of 35,600 mt for 2023 were up 62% from the previous week but down 5% from the prior four-week average. The three largest buyers were Mexico (9,900 mt), Japan (6,400 mt) and China (5,000 mt).
FRIDAY'S HOG CALL: Lower. Given the immense weakness that's driven the lean hog market lower, it's hard to believe that prices will by anything but lower on Friday.
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