GENERAL COMMENTS
The livestock contracts struggled to find support through Wednesday's end as the cattle contracts didn't like the strength that the nearby corn contracts gained ahead of closing, and the lean hog complex remains hesitant as demand has been touch and go. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.59 with a weighted average of $79.50 on 21,226 head. May corn is up 5 1/2 cents per bushel and May soybean meal is up $3.20. The Dow Jones Industrial Average is down 42.47 points.
LIVE CATTLE:
The live cattle complex closed mixed with just a few of the deferred months able to hang onto their gains ahead of the day's close. The market's lower descend stemmed from the corn complex gaining some modest support in its nearby contracts, but also from the fact that no cash cattle have traded yet and boxed beef prices closed lower. April live cattle closed $0.35 lower at $165.12, June live cattle closed $0.75 lower at $160.60 and August live cattle closed $0.57 lower at $159.67. The slight dip in boxed beef prices doesn't come as a surprise as box prices have held up far better than expected. Once the cash cattle market begins to trade, traders will likely see the support they need in order to justify higher trade again. A sole bid of $165 live and $265 dressed was offered throughout the day in Nebraska, but no feedlots jumped on it. Asking prices are noted in the South at $166-plus, but remain unestablished in the North. Trade could begin to develop as early as Thursday.
Wednesday's slaughter is estimated at 126,000 head. steady with a week ago and 2,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.12 ($287.83) and select down $2.82 ($276.43) with a movement of 100 loads (71.61 loads of choice, 12.48 loads of select, 4.31 loads of trim and 11.17 loads of ground beef).
THURSDAY'S CATTLE CALL: $1.00 to $2.00 higher. Given that fed cattle supplies are as thin as they are, prices will likely be higher again this week.
FEEDER CATTLE:
Early in the day, the feeder cattle contracts jolted higher, believing it was going to be another day when corn prices ventured lower and feeders were going to be given an open market to run with. However, as the day got closer to the noon hour, the corn complex began to find strength and support in its nearby contracts and ultimately closed $0.03 to $0.11 higher in its nearby contracts. Nevertheless, the change in tone from the corn market abruptly sent feeders retreating and eventually to a lower close for the day. March feeders closed $1.50 lower at $188.30, April feeders closed $1.22 lower at $193.85 and May feeders closed $0.62 lower at $199.00. Demand wasn't weakened throughout the countryside as buyers continue to aggressively hit sale barns and procure both calves and feeders. At Winter Livestock Auction in La Junta, Colorado, compared to last week, steer calves under 650 pounds traded steady expect for those weighing 500 to 550 pounds as they traded mostly $3.00 to $5.00 higher, but there were instances of $10.00 higher. Steers weighing 650 to 700 pounds traded $2.00 to $3.00 higher, and those over 700 pounds sold steady to $1.00 higher. Heifer calves under 500 pounds sold steady, heifers weighing 500 to 600 pounds sold $3.00 to $5.00 higher, and heifers over 600 pounds sold steady to $1.00 higher. Feeder cattle supply over 600 pounds was 64%. The CME Feeder Cattle Index for Feb. 28: up $0.42, $183.04.
LEAN HOGS:
The lean hog complex closed lower as the market couldn't find the technical support it needed throughout Wednesday's market. On the bright side, pork cutout values did close higher, and cash prices closed higher too. The cash market saw a strong movement of 21,226 head traded with a $1.59 advancement on top of Tuesday's cash price to move the weighted average to $79.50. Pork cutout values also saw steady gains across nearly all the cuts as the ham was the only cut that dropped lower and it was only by a mere $0.09. Nevertheless, come Thursday, the market may be able to trade slightly higher technically as the market saw strong fundamental through Wednesday's close, especially if the market gets a strong export report. April lean hog closed $0.22 lower at $84.95, June lean hogs closed $0.92 lower at $100.80 and July lean hogs closed $1.02 lower at $103.07. Pork cutouts totaled 261.13 loads with 237.26 loads of pork cuts and 23.87 loads of trim. Pork cutout values: up $1.16, $85.52. Wednesday's slaughter is estimated at 468,000 head, 59,000 head more than a week ago and 13,000 head less than a year ago. The CME Lean Hog Index for Feb. 27: up $0.29, $78.51.
THURSDAY'S HOG CALL: Lower. Given that Wednesday's market saw such a big volume traded, it's not likely that packers will show much more interest on Thursday in the cash market.
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