Tuesday Closing Livestock Market Update - Live Cattle Keep Their Momentum

GENERAL COMMENTS

Overall, the livestock complex had a mixed day following Monday's wild success, as traders weren't as aggressive in Tuesday's market. The live cattle complex was able to close the day out higher, but that's largely due to the onset of strength in boxed beef prices. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.20 with a weighted average of $75.64 on 11,025 hogs. May corn closed down 1 cent at $6.473, and May soybean meal closed up $11.90 at $457.9. The Dow Jones Industrial Average was down 37.83 at 32,394.25.

LIVE CATTLE:

The live cattle complex was the only livestock market able to keep Monday's momentum alive and well through Tuesday's close. The nearby contracts faced some pressure early in the day, but with boxed beef prices finding a bottom in this market, traders felt confident enough to continue to trade the contracts higher. Feedlot managers are taking note of the changes in the boxed beef complex and aim to trade cash cattle higher this week. The cash cattle market didn't see much attention throughout Tuesday's trade, but asking prices in the South are noted at $165 to $166 but remain unestablished in the North. As feedlots set out to gain $1 or $2 this week, no sizeable cash cattle sales will likely develop ahead of Thursday. April live cattle closed $0.05 higher at $164.95, June live cattle closed $0.03 higher at $158.9, and August live cattle closed $0.13 higher at $158.725.

Boxed beef prices closed higher: choice up $0.27 ($280.63) and select up $0.64 ($270.36) with a movement of 103.17 loads (59.25 loads of choice, 23.01 loads of select, 9.90 loads of trim and 11.01 loads of ground beef).

Tuesday's slaughter is estimated at 127,000 head -- steady with a week ago and 2,000 head more than a year ago.

WEDNESDAY'S CATTLE CALL: $1 to $2 higher. With the boxed beef market seeing more upside potential, feedlots will likely take that signal as an opportunity to advance cash prices.

FEEDER CATTLE:

Even though the live cattle complex closed higher, the feeder cattle market closed mostly lower, as traders were leery about advancing the market too rapidly after Monday's sharp increase. When looking to Wednesday's market, there's a strong possibility that the contracts can find strength and trade higher, as corn prices haven't posed much of a threat and as feeder cattle demand throughout the countryside remains incredibly strong. April feeders closed $0.40 lower at $197.22, May feeders closed $0.57 lower at $200.80 and August feeders closed $0.10 lower at $216.90. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota, compared to last week, feeder steers traded steady to $5 higher with instances up to $14 stronger; steers under 550 pounds saw cases where the market traded $32 stronger. Feeder heifers traded steady to $4 higher with instances of $20 higher on the lighter weights. Feeder cattle supply over 600 pounds was 85%. The CME feeder cattle index 3/27/2023: unavailable at this time.

LEAN HOGS:

The lean hog market had a mixed outcome by Tuesday's end, as at least the deferred contracts closed higher, but pork cutout values closed lower, and so did the nearby contracts. On Monday, we were thanking the belly for closing higher, and on Tuesday, the biggest reason why the carcass value fell $1.22 is because the belly fell a whopping $5.43. The moral of the story is that in today's market environment, the belly is extremely volatile and untrustworthy. The cash market was quiet throughout Tuesday's trade, and with pork cutout values down noticeably, packers will likely support the cash market simply because they need hogs, but prices won't likely see a significant jump. April lean hogs closed $0.87 lower at $77.75, June lean hogs closed $0.35 lower at $92.72 and July lean hogs closed $0.47 lower at $94.67. Pork cutouts totaled 352.81 loads with 291.51 loads of pork cuts and 61.30 loads of trim. Pork cutout values are down $1.22 at $80.

Tuesday's slaughter is estimated at 480,000 head -- 5,000 head less than a week and year ago. The CME lean hog index 3/24/2023: down $0.42, $76.57.

WEDNESDAY'S HOG CALL: Slightly higher. Cash hog prices will likely be a little higher, as packers will need to procure more hogs this week. But with the cutout seeing mixed signals, packers will be leery to overly support the cash complex.