GENERAL COMMENTS:
Both the live cattle and feeder cattle futures are rallying as traders see ample support from the market's technical and fundamental factors. The big line item to watch for this week will be Wednesday's Cattle Inventory report. March corn is down 7 1/4 cents per bushel and March soybean meal is up $4.40. The Dow Jones Industrial Average is up 5.71 points.
LIVE CATTLE:
Traders are continuing to aggressively support the live cattle complex as tight fed cattle supplies and relatively strong beef demand continue to be active drivers in this market. February live cattle are up $0.95 at $179.40, April live cattle are up $1.60 at $183.30, and June live cattle are up $1.52 at $180.37. So long as cash market support remains ample, traders should be able to continue to advance the market with ease. But the next resistance level traders will have to tackle is around $184.50. This week's Cattle Inventory report could launch the market sharply higher as the U.S. beef cow herd is expected to carve out another new low; the report will be released Wednesday. New showlists appear to be mixed, somewhat higher in Nebraska/Colorado, somewhat lower in Texas, and lower in Kansas.
Last week's negotiated cash cattle trade totaled 83,353 head. Of that 89% (74,496 head) were committed for nearby delivery, while the remaining 11% (8,857 head) were committed to deferred delivery. Last week, Southern live cattle sold for $174 to mostly $175, which is $2.00 higher than last week's weighted average. Northern dressed cattle sold for $277, which is $3.00 higher than last week's weighted average.
Boxed beef prices are mixed: choice up $0.97 ($301.50) and select down $0.20 ($288.93) with a movement of 29 loads (18.25 loads of choice, 5.22 loads of select, zero loads of trim and 5.91 loads of ground beef).
FEEDER CATTLE:
With the corn complex trading $0.05 to $0.07 lower in nearby contracts, and the live cattle market still lending plenty of support and ambition, it's been an easy call for traders to boldly support feeder cattle contracts again this week. March feeders are up $1.97 at $241.67, April feeders are up $1.92 at $247.52, and May feeders are up $1.67 at $252.85. With good weather is expected for much of the country this week and feeder cattle demand should stay strong.
LEAN HOGS:
The lean hog complex is taking a more cautious approach to Monday's start as contracts are still trading mostly higher even though a few of the nearbys are trading lower. The cash hog market is about as disappointing as it gets -- only 35 head of hogs were reported as sold in the cash market Monday morning. Traders are going to need to see follow-through demand in order for them to comfortability continue to support the contracts. Demand both here domestically and internationally will be crucial in the months ahead. February lean hogs are down $0.42 at $74.47, April lean hogs are down $0.05 at $83.20 and June lean hogs are up $0.02 at $96.02.
The projected CME Lean Hog Index for 1/26/2024 is up $0.68 at $70.58, and the actual index for 1/25/2024 is up $0.23 at $69.90. Hog prices are unavailable on the Daily Direct Morning Hog Report due to confidentiality. However, we can see that 35 head have traded (yes, I reported that correctly, only 35 head have traded) and the five-day rolling average now sits at $50.49. Pork cutouts total 180.42 loads with 150.77 loads of pork cuts and 29.65 loads of trim. Pork cutout values: down $0.02, $89.49.
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