GENERAL COMMENTS:
It was an odd day for the cattle contracts as the market boiled at the day's start with eager aspirations and then received continued support from the cash cattle market. However, both the live cattle and feeder cattle contracts closed mostly lower. Meanwhile the lean hog complex traded lower throughout most of the day as traders were disappointed in Thursday's export report. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $1.28 with a weighted average of $69.26, ranging from $61.00 to $72.00 on 5,541 head. May corn is down 3 3/4 cents per bushel and May soybean meal is up $3.40. The Dow Jones Industrial Average is up 367.13 points.
LIVE CATTLE:
All in all, the brisk nature of the cattle market's rally is being driven by excellent fundamentals and the cash market. Even so, Thursday's market didn't necessarily reflect that as the futures complex closed mostly lower amid cash cattle trade that was anywhere from $7.00 to $11.00 higher than a week ago. A reliable source shared that some of the cattle bought in the North were asked to be delivered as early as next week -- again indicating that packers are close to the knife and in desperate need of cattle. April live cattle closed $1.22 higher at $175.50, June live cattle closed $0.35 lower at $164.50 and August live cattle closed $0.72 lower at $163.25. The cash cattle market was red hot again Thursday as more cattle were sold in the North at $290 which is $11.00 higher than last week's weighted average, and some live sales were also marked in the North at $182 to $185, which is $7.00 to $10.00 higher than last week's weighted average. Trade was sparse in the South, but on Wednesday afternoon Southern cattle traded for $175 which is $5.00 higher than last week's weighted average and that breaks the previous high established in 2014/2015. Thursday's slaughter is estimated at 125,000 head -- 3,000 head more than a week ago and steady with a year ago.
Beef net sales of 8,700 metric tons (mt) for 2023 were down 36% from the previous week and 43% from the prior four-week average. The three largest buyers were South Korea (3,400 mt), Japan (2,900 mt) and Mexico (1,200 mt).
Boxed beef prices closed higher: choice up $1.94 ($300.42) and select up $1.57 ($283.38) with a movement of 97 loads (55.88 loads of choice, 16.66 loads of select, 9.76 loads of trim and 14.79 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady. Some more cash cattle trade could develop in the South, but any more trade that does develop in either region will likely remain steady with the week's gains.
FEEDER CATTLE:
The feeder cattle complex traded higher throughout most of the day, but ahead of closing outside pressure grew too strong for the market to bear and ultimately led the complex to a lower end. Thursday's lower close is solely on the grounds that traders felt pressured by the rest of the market complex and opted to give the action throughout the futures complex more weight in their decision making than the strong fundamental components of the market. It still remains incredibly helpful for feeders' long term that cash cattle prices continue to trek higher and that corn prices continue to drift lower. April feeders closed $0.45 higher at $202.67, May feeders closed $0.77 lower at $207.80 and August feeders closed $0.77 lower at $224.97. At Winter Livestock Auction in Pratt, Kansas, at their midsession point and when compared to last week, feeder heifers under 600 pounds sold with a higher undertone but heifers over 600 pounds traded anywhere from $4.00 to $6.00 higher. No comparison was available yet for steers. Feeder cattle supply over 600 pounds was 98%. The CME Feeder Cattle Index 4/12/2023: up $6.53, $199.77.
LEAN HOGS:
The lean hog complex stood little to no chance of closing higher as the market was disappointed in Thursday's export report and also felt the pressures of a lower ending marketplace. June lean hogs closed $1.90 lower at $85.65, July lean hogs closed $1.75 lower at $88.52 and August lean hogs closed $1.52 lower at $89.75. Pork cutout values were able to close higher, with nice $4.00 gains seen in both the ham and the belly. Even so, a single day of higher pork cutout values doesn't give traders enough support to push the contracts higher. Pork cutouts totaled 265.82 loads with 229.42 loads of pork cuts and 36.40 loads of trim. Pork cutout values: up $1.54, $77.56. Thursday's slaughter is estimated at 484,000 head -- 3,000 head more than a week ago and 4,000 head more than a year ago. The CME Lean Hog Index for 4/11/2023: down $0.27, $72.25.
Pork net sales of 27,100 mt for 2023 were down 49% from the previous week and down 31% from the prior four-week average. The three largest buyers were Japan (5,400 mt), Mexico (5,300 mt) and China (3,900 mt).
FRIDAY'S HOG CALL: Lower. Given that traders haven't shown the cash hog market much interest this week, it's quite unlikely they will change their tune on Friday ahead of the weekend.
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