GENERAL COMMENTS:
The livestock complex closed mixed through Monday's end as cattle contracts backpedaled and closed lower while hog contracts kept their gains through the day's end. Heading into Tuesday's market, the cattle complex may remain sheepish as traders patiently wait to see what Wednesday's Cattle Inventory report says.
Hog prices are unavailable in the Daily Direct Afternoon Report due to confidentiality issues. However, we can see that only 75 head traded and the five-day rolling average now sits at $52.43. March corn is down 6 cents per bushel and March soybean meal is up $5.30. The Dow Jones Industrial Average is up 224.02 points.
LIVE CATTLE:
The live cattle complex ran into Monday's market full of momentum, almost like a runner eagerly looking forward to stretching their legs. But as the day neared closing time and boxed beef prices didn't necessarily lend the support hoped for, traders quickly reverted to a cautious mindset and let the market round out the day on a weaker note.
February live cattle closed $1.07 lower at $177.37, April live cattle closed $0.45 lower at $181.22 and June live cattle closed $0.37 lower at $178.47. The market's recent surge has been aggressive, but so long as fundamental support continues to keep cash prices steady/somewhat higher and boxed beef values elevated, the market should be able to maintain these levels. New show lists appear to be mixed, somewhat higher in Nebraska/Colorado, somewhat lower in Texas and lower in Kansas. Monday's slaughter is estimated at 125,000 head -- 10,000 head more than a week ago and 6,000 head more than a year ago.
Last week's negotiated cash cattle trade totaled 83,353 head. Of that, 89% (74,496 head) were committed to nearby delivery and the remaining 11% (8,857 head) were committed to deferred delivery. Last week, Southern live cattle sold for $174 to mostly $175, which is $2 higher than last week's weighted average. Northern dressed cattle sold for $277, which is $3 higher than last week's weighted average.
Boxed beef prices closed lower: Choice down $1.11 ($299.42) and select down $0.31 ($288.82) with a movement of 68 loads (42.82 loads of choice, 12.15 loads of select, zero loads of trim and 13.37 loads of ground beef).
TUESDAY'S CATTLE CALL: Higher. The week's cash cattle trade is likely delayed until the second half of the week and after the Cattle Inventory report is shared. Prices will likely be higher as front-end supplies are current.
FEEDER CATTLE:
Without the support of the live cattle market, the feeder cattle complex grew leery of leading its own market higher. From a fundamental standpoint, the feeder cattle market continues to sit in a strong position as feed remains relatively affordable, demand for both calves and feeders is strong and the closer time gets to turn our season and green grass, the more demand there should be from buyers.
March feeders closed $1.07 lower at $238.62, April feeders closed $1 lower at $244.60 and May feeders closed $1.12 lower at $250.05. At Joplin Regional Stockyards in Carthage, Missouri, at the midsession point and when compared to last week, feeder steers and heifers were trading $7 to $15 higher with instances of $20 higher. Feeder cattle supply over 600 pounds was 67%. The CME feeder cattle index 1/26/2024: Up $2.09, $234.15.
LEAN HOGS:
The lean hog complex managed to keep its contracts higher through the day's end, but the market wasn't free of headaches. For starters, the cash market only saw 75 head traded.
Only 75 head? I will forever be a cash market supporter as it's the only way to keep transparency and price discovery within the marketplace. This is why I'm bewildered to only see this afternoon's report print that only 75 head of hogs were traded.
Pork cutout values closed slightly lower as prices were hit-and-miss all across the board. The belly did manage to close $5.18 higher, but the significant losses in the butt (down $5.15), the loin (down $1.50) and the ham (down $1.55) pulled the carcass prices lower.
February lean hogs closed $0.35 higher at $75.27, April lean hogs closed $0.17 higher at $83.42 and June lean hogs closed $0.27 higher at $96.27. Pork cutouts totaled 315.13 loads with 278.46 loads of pork cuts and 36.67 loads of trim.
Pork cutout values: Down $0.44, $89.07. Monday's slaughter is estimated at 490,000 head -- 7,000 head more than a week ago and 16,000 head more than a year ago. The CME lean hog index 1/25/2024: Up $0.23, $69.90.
TUESDAY'S HOG CALL: Steady. With pork cutout values lower and virtually no interest in the cash market whatsoever throughout Monday's trade, packers likely remain distant buyers in Tuesday's market, too.
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