Cattle and feeders continue to trade higher, encouraged by a lack of cash trade so far this week. June lean hogs are also modestly higher as traders prepare for Thursday's afternoon's Hogs and Pigs report.
LIVE CATTLE:Live cattle futures are higher at midmorning Thursday with the June contract up 72 cents at $160.37, not far from its contract high of $161.90. The U.S. Commerce Department revised its estimate of fourth quarter real GDP a little lower, to a 0.6% gain on the quarter, but Dow Jones futures are steady to higher with no fresh negative news to scare traders. Early Thursday, USDA said 11,300 mt of beef were sold for export last week, thanks to top purchases from Japan and China. Overall, sales were a bit disappointing and less than the previous week's total of 18,600 mt.
Despite recent economic worries, boxed beef prices have held roughly steady since Friday. Boxed beef prices were lower early Thursday: choice down $1.04 at $279.25 and selects down $0.56 at $268.34 with a movement of 58 loads (32.56 loads of choice, 7.76 loads of select, 7.07 loads of trim and 10.25 loads of ground beef). Slaughter has stayed active with Dow Jones estimating 125,000 on Thursday, even with last week.
Once again, cash trade is slow to develop this week, but there is light trade reported in Kansas of live cattle at $167, up $4 from last week and dressed trade in Nebraska at $270, up $5 from last week. There is also some weather to consider. Thursday's weather map shows red flag warnings throughout the southwestern Plains with temperatures expected in the 70s and 80s later Thursday. At the same time, snow is expected to fall from South Dakota to Michigan Friday and again, later next week.
FEEDER CATTLE:At midmorning Thursday, May feeder cattle are up 52 cents at $203.05, adding to this week's gains and rebound after worries about the banking sector contributed to selling earlier in March. Despite outside worries, May feeder prices have held up well and continue to show strong demand at a time when cattle numbers are down. Feed costs remain high in the western Plains and probably won't see much relief until the fall corn harvest, but there should be better chances for green pastures in the northwestern Plains this spring and summer. Thursday's U.S. Drought Monitor showed moisture improvement in the western states and small parts of the Dakotas. Drought was worse in parts of Texas where rains continue to miss. Overall, spot feeder cattle prices are trading near their highest prices since 2015 and remain well-supported despite the strain of high feed costs. The CME Feeder Index was down 7 cents at $191.27 for Tuesday, March 28.
LEAN HOGS:At midmorning Thursday, June hog futures are trading up 45 cents at $91.25 as traders make last-minute adjustments ahead of USDA's Hogs and Pigs report, due out at 2 p.m. CDT. Pre-report surveys expect March 1 inventory will be up slightly from a year ago, near 72.9 million head, but there is a chance of a bearish surprise as cash hog prices have not been popular the past month. It will also be interesting to see if any December totals get revised upward. Early Thursday, USDA said 30,400 mt of pork were sold for export last week. The top buyer was Mexico and sales were down from the previous week's 38,000 mt.
Cash hog prices in Thursday's Daily Direct Hog morning report remained under pressure with negotiated trades averaging 75.56 cents per pound and the swine formula base averaging 74.36. USDA's Thursday morning pork report posted cutouts down 71 cents at $79.55, pressured by lower prices of loins, butts and bellies. USDA reported 166.08 loads of pork cuts and 7.65 loads of trim. Hog slaughter remains active and was estimated by Dow Jones at 484,00 for Thursday, up 2,000 from last week. CME's Lean Hog Index for March 28 was down 25 cents at $76.00.
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