GENERAL COMMENTS
It's almost as refreshing to see the cattle contracts trade higher as it is to know that we are officially into the spring season. The big question now will be whether traders decide to continue to focus on the market's fundamentals or if they'll be torn to potentially fall back and trade the fear-mongering unknowingness of the U.S. banking system. Hog prices closed higher on the Daily Direct Afternoon hog report, up $1.60 with a weighted average of $78.06 on 14,682 hogs. May corn closed down 3 at $6.3 and May soybean meal closed down $2.10 at $460.6. The Dow Jones Industrial Average is up 316.02 at 32,560.60.
LIVE CATTLE:
It may have only been the nearby live cattle contracts that were able to close higher, but a higher close is a higher close! Now that traders have finally closed the nearby contracts higher after a gut-wrenching week of mostly lower trade, the question is: will traders continue to focus on the market's fundamentals amid the uncertainty in the banking complex? Only time will tell, but feedlots are hoping so. The cash cattle market was again quiet throughout Tuesday's market as feedlots are hoping to advance the market later this week. Some early bids could begin to develop on Wednesday, but this week's trade will likely be postponed until Thursday or Friday.
Tuesday's slaughter is estimated at 127,000 head, steady with a week ago and 4,000 head more than a year ago.
Boxed beef prices closed mixed: choice down $1.10 ($279.92) and select down $2.39 ($271.55) with a movement of 130.43 loads (80.94 loads of choice, 11.98 loads of select, 15.66 loads of trim and 21.85 loads of ground beef).
WEDNESDAY'S CATTLE CALL: $1.00 to $2.00 higher. With the recent support seen from the futures complex, I believe feedlots could potentially add $1.00 or $2.00 to the market if they're willing to wait until late in the week to trade cattle.
FEEDER CATTLE:
With the steady support of the higher trending live cattle contracts, the feeder cattle contracts were able to close higher. It also helped that the nearby corn contracts closed $0.03 to $0.04 lower, giving traders all the more reason to trade the feeder cattle contracts higher. And let's not forget to mention, demand throughout the countryside remains incredibly strong. Prices may have softened $1.00 or $2.00 last week when traders were in a tizzy, but the sheer fact that the CME Feeder Cattle Index is still trading around $187-$188 is amazing.
March feeders closed $0.58 higher at $188.775, April feeders closed $0.08 higher at $194.7 and May feeders closed $0.40 higher at $199.55. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, feeder steers sold steady, but feeder heifers under 475 pounds traded steady to $4.00 higher. The market's biggest advancements were seen on the light weights, as the heavier feeders sold steady. Feeder cattle supply over 600 pounds was 57%. The CME Feeder Cattle Index for March 20: down $0.23, $187.78.
LEAN HOGS:
Traders found support in the cattle complex's bullish fundamentals, but unfortunately traders in the lean hog market don't have that same fundamental support to lean back on. The lean hog contracts closed lower yet again with a combination of fearful trading stemming from the uncertain banking complex, mixed with a leery outlook on immediate pork demand. April lean hogs closed $0.73 lower at $77.05, June lean hogs closed $0.53 lower at $91.35 and July lean hogs closed $0.85 lower at $93.325. Pork cutout values are not available due to packer submission problems. Tuesday's slaughter is estimated at 485,000 head, steady with a week ago and 12,000 head more than a year ago. Monday's hog slaughter was revised to 459,000 head. The CME Lean Hog Index for March 17: down $0.46, $79.55.
WEDNESDAY'S HOG CALL: Steady. Given that packers will likely need more hogs, the market could be steady on Wednesday.
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