GENERAL COMMENTS:
Wednesday's WASDE report was quite favorable to the cattle complex, but it wasn't as kind to the hog market. Both cash prices and pork cutout values are higher at noon, so the lean hog market is still trading higher, but its nearby outlook isn't overly supportive. May corn is up 3/4 cent per bushel and May soybean meal is up $3.40. The Dow Jones Industrial Average is down 68.15 points.
LIVE CATTLE:
The live cattle contracts are trading lower into Wednesday's afternoon, not because of a lack of support, but merely because traders would like to see some cash cattle trade develop before they move the market. Wednesday's WASDE report was about as favorable as one could have hoped for as quarterly price projections were increased for all four quarters of the year and production was increased as well. April live cattle are down $0.57 at $165.40, June live cattle are down $0.10 at $160.45 and August live cattle are down $0.12 at $159.97. It's unlikely that any cash cattle trade develops ahead of Thursday, or even potentially Friday, but when trade does develop, prices are expected to be higher. Early asking prices are noted in the South at $166 to $167-plus, but are still not established in the North.
Wednesday's WASDE report shared exciting news for the cattle and beef markets. Production for 2023 was increased by 170 million pounds, which largely stems from more aggressive beef cow slaughter than originally assumed. The first three quarters of 2023 saw production increases to contribute to the 170 million additional pounds, but the fourth quarter remained unchanged. Quarterly price projections showed a bullish outlook for steer prices as all four quarters of 2023 saw a price increase. Compared to last month the first quarter was raided by $3.00 to average $161.00, the second quarter was raised by $4.00 to average $163.00, the third quarter was raised by $2.00 to average $159.00 and the fourth quarter was raised by $2.00 to average $164.00. Beef imports remained unchanged at 3,425 million pounds, and exports remained unchanged at 3,090 million pounds.
Boxed beef prices are lower: choice down $1.58 ($286.35) and select down $0.91 ($276.58) with a movement of 73 loads (53.44 loads of choice, 10.09 loads of select, zero loads of trim and 9.33 loads of ground beef).
FEEDER CATTLE:
Feeder cattle prices continue to trek higher as traders applaud the buying aggression from feeder cattle buyers in the countryside and warmly welcome corn prices to continue to weaken. After rallying aggressively on Monday, the feeder cattle complex has since traded merely sideways, but being able to hold this new territory is a win in and of itself. So long as buyers continue to show eagerness at sales and the corn market holds at least steady, the feeder cattle complex should be able to maintain its current price point. March feeders are up $0.10 at $192.22, April feeders are up $0.12 at $198.80 and May feeders are up $0.67 at $204.87.
LEAN HOGS:
The lean hog complex is trading mixed into Wednesday's afternoon as both cash prices and pork cutout values are higher at noon. April lean hogs are up $0.82 at $85.60, June lean hogs are up $0.02 at $100.10 and July lean hogs are up $0.07 at $102.52. Whether or not the market will keep its momentum through closing depends largely on if traders choose to absorb and fester on Wednesday's WASDE report, which wasn't overly favorable to the hog and pork markets.
The projected lean hog index for March 7 is up $0.20 at $79.29, and the actual index for March 6 is up $0.18 at $79.09. Hog prices are higher on the Daily Direct Morning Hog Report, up $1.13 with a weighted average of $78.49, ranging from $73.00 to $80.00 on 10,281 head and a five-day rolling average of $78.07. Pork cutout total 137.02 loads with 115.42 loads of pork cuts and 21.60 loads of trim. Pork cutout values: up $1.49, $88.51.
Wednesday's WASDE report shared disappointing news for the hog and pork markets. Pork production was lowered from a month ago as higher than previously expected slaughter speeds in the first quarter were more than offset by lighter first half of 2023 carcass weights. Pork production in 2023 fell by 25 million pounds. In terms of quarterly price projections, the market received mixed news as both the first and second quarter of 2023 saw price reductions, but the third and fourth quarter of the year remained unchanged. Barrows and gilts in the first quarter were reduced by $2.00 to average $56.00, prices in the second quarter were reduced by a $1.00 to average $70.00, and both the third and fourth quarter remained unchanged at $73.00 and $64.00. Pork imports remained unchanged at 1,005 million pounds and exports also remained unchanged at 6,350 million pounds.
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