GENERAL COMMENTS
It was another stellar day for the livestock complex as not even higher corn prices could tame the momentum seen in the livestock sector. Heading into Tuesday's market, it will be interesting to see how corn prices affect the feeder cattle complex, especially given that no cash cattle trade has developed for the market to find support in yet. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.31 with a weighted average of $70.92 on 3,693 hogs. May corn closed up 10 1/2 at $6.54 and May soybean meal closed down $3.60 at $450.7. The Dow Jones Industrial Average is up 101.23 at 33,586.52.
LIVE CATTLE:
Monday's market was another slam dunk for the live cattle complex -- boxed beef prices closed higher and most of the nearby live cattle contracts carved out new contract highs as the market takes out the previous highs set in 2014-15. April live cattle closed $0.30 higher at $171.375, June live cattle closed $0.60 higher at $163.7 and August live cattle closed $0.60 higher at $162.9. Packers are trying to get a foothold on this market by decreasing slaughter speeds and by slowing padding their deferred delivery commitment of cattle. Cash cattle prices are still expected to be higher this week as excellent beef demand will keep packers playing the game, but it's tough telling how much higher prices will be. New showlists appear to be about steady in Nebraska/Colorado, but lower in Kansas and Texas. Monday's slaughter is estimated at 113,000 head -- 4,000 head less than a week ago and 10,000 head less than a year ago.
Last week's negotiated cash cattle trade mostly took place on Wednesday with a little bit of clean up trade trickling in afterwards. Southern live cattle traded from $168 to $172, though mostly at $170, which is $4.00 higher than the previous week's weighted average in Texas and $3.00 higher than the previous week's weighted average in Kansas. Northern dressed cattle traded anywhere from $274 to $284, but mostly from $275 to $280 which is $4.50 to $9.50 higher than the previous week's weighted average. Northern live cattle traded at mostly $175, which is $4.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 103,006 head. Of that, 82% (84,973 head) were committed for the nearby delivery while the remaining 18% (18,033 head) were committed for the deferred delivery.
Boxed beef prices closed higher: choice up $1.93 ($292.91) and select up $2.62 ($278.4) with a movement of 75.17 loads (43.11 loads of choice, 13.07 loads of select, 5.72 loads of trim and 13.27 loads of ground beef).
TUESDAY'S CATTLE CALL: Higher. Given that beef demand is as strong as it is, packers are likely going to support the cash market again this week.
FEEDER CATTLE:
The corn complex pressured the feeder cattle market throughout the day, but even with a $0.06 to $0.10 gain seen in the corn contracts at closing, that wasn't enough to debunk the feeder rally. The feeder cattle contracts continue to cling to two things in this bull rally: thin supplies and backing from the cash cattle market. Week in and week out buyers are flocking to sale barns trying to buy the cattle they need for the year ahead before prices get any higher. April feeders closed $0.30 higher at $200.925, May feeders closed $0.23 higher at $205.625 and August feeders closed $0.40 higher at $223.00. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week, and at their midsession point, feeder steers were welling $5.00 to $14.00 higher with the biggest gains seen on the light weights. Feeder heifers were selling $4.00 to $9.00 higher. Feeder cattle supply over 600 pounds was 57%. The CME Feeder Cattle Index for April 7: down $1.05, $193.33.
LEAN HOGS:
The lean hog complex performed exceptionally throughout Monday's market and mostly, the market was able was able to close higher expect for the April contract. June lean hogs closed $0.97 higher at $89.15, July lean hogs closed $0.87 higher at $92.15 and August lean hogs closed $0.72 higher at $92.95. The market's strong technical closing came from the technical momentum of Friday's market as, fundamentally, the market only received mixed support. Pork cutout values closed lower with a big decline seen in hams which ultimately sucked the carcass value lower. Pork Cutouts totaled 254.08 loads with 226.15 loads of pork cuts and 27.93 loads of trim. Pork cutout values are down $0.84 at $77.06. Monday's slaughter is estimated at 345,000 head, 140,000 head less than a week ago and 132,000 head less than a year ago. The CME Lean Hog Index for April 6: down $0.46, $72.88.
TUESDAY'S HOG CALL: Higher. Given that packers were so lackadaisical last week in their procurement of hogs, they'll need to be more aggressive this week.
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