GENERAL COMMENTS:
Triple-digit gains quickly flooded through the cattle complex as traders focusing on previous market shifts quickly and aggressively became active buyers Thursday. The momentum seen in nearby live cattle and feeder cattle contracts is a combination of pre-report adjustments and bullish expectations surrounding beef market fundamentals in the upcoming weeks. Nearby feeder cattle futures led the market higher, closing over $2 per cwt higher in nearby contracts, helping to stimulate additional potential buyer interest through the end of the week. Hog futures were much less subdued with prices mixed in a moderate range as traders continue to focus on limited overall market change despite firming fundamental factors developing mid-January. Hog prices closed higher on the Daily Direct Afternoon hog report, up $0.97 with a weighted average of $48.04 on 2,225 hogs. March corn closed up 1 3/4 at $4.44 and March soybean meal closed up $2.60 at $361.3. The Dow Jones Industrial Average is up 201.94 at 37,468.61.
LIVE CATTLE:
Live cattle futures posted strong gains in active buyer support with April contracts leading the upward market shift with a $2.20 per cwt gain. This moved April contracts to $177.65 per cwt. The ability to focus on technical support developing through the complex as well as firm beef market fundamentals seen over the last couple of weeks has helped to create additional momentum through the entire complex. Although traders are looking for larger cattle on feed numbers from year-ago levels, the potential that inventory levels will fall from last month is adding some additional market support through the entire complex. Cash cattle markets are still generally quiet Thursday afternoon. A few bids in the North at $273 to $275 per cwt dressed basis have developed, but at this point, feeders are more than willing to pass at these price levels. Asking prices in the North are not fully defined, but are still reported at $174 to $175 live basis in the South. Given that cattle trade will be pushed off until Friday, it is very possible that much of the activity could be delayed until after the release of the January Cattle on Feed Report.
February live cattle closed $1.73 higher at $174.825, April live cattle closed $2.03 higher at $177.65 and June live cattle closed $1.73 higher at $174.525. Thursday's slaughter is estimated at 121,000 head, 1,000 head more than a week ago and 2,000 head more than a year ago. February live cattle closed $1.73 higher at $174.825, April live cattle closed $2.03 higher at $177.65 and June live cattle closed $1.73 higher at $174.525.
Thursday's slaughter is estimated at 118,000 head, 2,000 head more than a week ago and 4,000 head less than a year ago.
Boxed beef prices closed mixed: choice down $2.16 ($296.29) and select up $0.74 ($283.76) with a movement of 143.71 loads (110.81 loads of choice, 11.90 loads of select, 5.85 loads of trim and 15.15 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to $1 Higher. Cash markets still remain sluggish, but feeders continue to focus on potential end of the week support, and will likely hold onto higher asking prices well into the end of the week, and potentially until after the Cattle on Feed Report.
FEEDER CATTLE:
Feeder cattle futures posted sharp gains Thursday as front month January futures closed above $230 per cwt for the first time in nearly two months. Since hitting cycle lows in December, the feeder cattle futures have rallied $20 per cwt, creating additional follow through support through the entire complex. This move has helped to solidify gains over $2 per cwt in all nearby contracts Thursday as traders are becoming more bullish about not only cattle market fundamentals but also the ability to spark additional non-commercial buyer interest back into the market which quickly liquidated over the last few months. Traders are also looking for further confirmation that the largest portion of cattle placements for the year have already been put into feedlots, creating further optimism that supplies will begin to tighten in the coming weeks and months.
January feeders closed $2.50 higher at $230.925, March feeders closed $2.78 higher at $232.55 and April feeders closed $2.55 higher at $237.75. The CME Feeder Cattle Index for January 16: up $1.42, $227.29.
LEAN HOGS:
Lean hog futures remained generally inactive compared to the aggressive market shifts seen in cattle trade Thursday. Lean hog prices closed mixed in a moderate trading range after trading in this mixed direction through the entire session. Moderate pressure in spot February contracts focused on current pork supply levels, while light to moderate buying in April contracts is starting to draw attention to the fact that renewed interest is starting to be seen across the entire complex. The rest of the lean hog complex remained very lightly traded with prices hovering from 10 cents lower to 15 cents lower as traders in these contract months have become comfortable on the sidelines and are willing to look for additional direction over the next few trading sessions.
February lean hogs closed $0.35 lower at $71.1, April lean hogs closed $0.48 higher at $78.45 and May lean hogs closed $0.15 higher at $84.10. Thursday's hog slaughter is estimated at 489,000 head, 12,000 head more than a week ago and 1,000 head more than a year ago. Pork Cutouts totaled 290.48 loads with 258.35 loads of pork cuts and 32.13 loads of trim. Pork cutout values are up $0.77 at $88.73. The CME Lean Hog Index for January 16: up $0.49, $67.34.
FRIDAY'S HOG CALL: Steady to $1 Higher. Follow through fundamental support in both pork cutout values and cash hog values is expected to lead to firming cash hog bids at the end of the week.
No comments:
Post a Comment