Thursday Midday Livestock Market Summary - Lean Hog Futures Rally

GENERAL COMMENTS:

Strong upward gains in feeder cattle and lean hog futures developed Thursday morning. The combined focus on active buyer interest in nearby contracts is helping to bring about triple-digit gains in several contract months. Live cattle trade remains much more sluggish than the feeder cattle complex, although buyer interest continues to slowly develop as traders try to balance technical support with sluggish fundamental market developments at this point.

The bounce from long-term lows seen Wednesday in lean hog trade is helping create upward momentum at this point. March corn is steady and January soybean meal is up $0.30 at $402.5. The Dow Jones Industrial Average is up 178.78 at 37,269.02.

LIVE CATTLE:

Live cattle futures are holding light to moderate gains, despite strong triple-digit support seen in feeder cattle trade. The underlying focus on long-term market support and the potential to draw noncommercial traders back into the market over the coming months is keeping traders generally positive.

The weekly export sales report posted net sales of 10,600 mt for 2023 were up noticeably from the previous week and up 67% from the prior four-week average. Increases were primarily for South Korea (2,700 mt, including decreases of 1,200 mt), Japan (2,300 mt, including decreases of 500 mt), Mexico (1,800 mt, including decreases of 100 mt), China (1,300 mt, including decreases of 100 mt) and Canada (500 mt, including decreases of 100 mt). Net sales of 5,100 mt for 2024 primarily for Japan (2,600 mt), South Korea (1,000 mt), Canada (500 mt), Mexico (400 mt), and Chile (200 mt), were offset by reductions for China (100 mt). Exports of 14,500 mt were up 5% from the previous week and from the prior four-week average. The destinations were primarily to South Korea (4,300 mt), Japan (3,000 mt), China (2,500 mt), Mexico (2,000 mt), and Canada (800 mt).

Cash cattle activity trade is still at a standstill. Despite the light trade seen midweek that sold generally $3 per cwt lower than last week, more trade is expected before the end of the week. Additional trade may be pushed off until Friday at this point.

December live cattle are $0.45 higher at $167.4, February live cattle are $0.55 higher at $167.775, April live cattle are $0.58 higher at $171.525. 

Boxed beef prices are mixed: choice down $0.63 ($291.01) and select up $0.08 ($259.29) with a movement of 76.77 loads (41.51 loads of choice, 12.91 loads of select, zero loads of trim and 22.35 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are holding aggressive triple-digit gains as buyers have steadily moved back into the complex following the midweek pullback. The current shift higher and continued gains over the last few days is positioning for a strong weekly close in all nearby feeder cattle futures. This positive market move is likely to help stimulate additional technical support across the complex despite very little changes in market fundametnals.

January feeders are $2.45 higher at $219.825, March feeders are $2.55 higher at $220.4 and April feeders are $2.58 higher at $224.40.

LEAN HOGS:

Lean hog futures have rallied higher as active buyer support moving into the complex. The combination of strong outside market support as well as positive export market direction in the weekly report has helped to spark aggressive gains across all nearby lean hog contracts.

In Thursday's weekly export report, net sales of 28,200 mt for 2023 were up 9% from the previous week and 15% from the prior four-week average. Increases were primarily for Mexico (13,700 mt, including decreases of 300 mt), Japan (3,100 mt, including decreases of 900 mt), Australia (2,100 mt, including decreases of 200 mt), South Korea (1,600 mt, including decreases of 1,300 mt) and Canada (1,300 mt, including decreases of 500 mt). Net sales of 12,900 mt for 2024 primarily for Mexico (6,300 mt), South Korea (2,200 mt), Colombia (1,400 mt), Australia (1,100 mt), and Japan (800 mt), were offset by reductions for China (100 mt). Exports of 36,100 mt were up 12% from the previous week and 17% from the prior four-week average. The destinations were primarily to Mexico (16,800 mt), South Korea (4,500 mt), Japan (3,100 mt), China (3,100 mt), and Colombia (2,500 mt).

December lean hogs are $0.30 lower at $67.625, February lean hogs are $3.75 higher at $70.475 and April lean hogs are $2.68 higher at $77.05. Hog Prices are lower on the Daily Direct Morning Hog report, down $0.56 with a weighted average of $49.23. Pork Cutouts totaled 196.85 loads with 178.52 loads of pork cuts and 18.33 loads of trim. Pork cutout values are down $1.58 at $83.33.