GENERAL COMMENTS:
It was a supportive day for the livestock industry as all three markets closed higher, thanks to strong demand. Both the pork and beef markets see opportunities in 2024 and traders were confident based on that narrative. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.81 with a weighted average price of $47.34 on 3,895 head. March corn is up 3/4 cent per bushel and March soybean meal is up $5.30. The Dow Jones Industrial Average is down 96.36 points.
LIVE CATTLE:
The live cattle complex didn't lage through Tuesday's market as all the contracts closed higher, thanks to tremendous support from stronger box prices. It was especially interesting to note that choice boxes closed $2.99 higher, pushing prices over $300, which hasn't been a price point seen since last November. There may be plenty of cattle in feedlots for packers to sort through. The brutal storms that came and went through most of January have come as a cost in efficiency to yard managers and with some of their cattle losing 30 to 50 pounds in the last storm, but showlist pressure isn't an immediate issue.
No cash cattle trade developed throughout the day and trade will likely be delayed until late Wednesday or even later. February live cattle closed $0.87 higher at $174.65, April live cattle closed $0.92 higher at $177.82 and June live cattle closed $0.67 higher at $174.95.
Tuesday's slaughter is estimated at 125,000 head -- 14,000 head more than a week ago and steady from a year ago.
Boxed beef prices closed higher: Choice up $2.99 ($301.66) and select up $1.80 ($288.38) with a movement of 100 loads (63.28 loads of choice, 14.26 loads of select, 6.67 loads of trim and 15.29 loads of ground beef).
WEDNESDAY'S CATTLE CALL: Steady. Given that packers had less than 40,000 head in last week's cash market likely means that they'll need to step up and buy more cattle this week.
FEEDER CATTLE:
The feeder cattle complex ran higher through Tuesday's close as the market was elated to see widespread support across the cattle complex. The combination of futures market support amid aggressive buying in the countryside for feeders is just what traders needed to see to consider taking on long-term resistance. Wednesday will likely be a challenging day for the feeder cattle market as traders are going to have to determine if they're serious about advancing this market or if they need to see more support to fully commit and do so.
March feeders closed $2.37 higher at $233.65, April feeders closed $2.45 higher at $239.55 and May feeders closed $2.40 higher at $244.75. Compared to sale two weeks ago at Oklahoma National Stockyards in Oklahoma City, Oklahoma, feeder steers and heifers sold $3 to $6 higher and steer and heifer calves traded steady to $4 higher. Sale receipts were still low for the auction house as another ice storm blew across the area and made travel extremely dangerous. Feeder cattle supply over 600 pounds was 51%. The CME feeder cattle index 1/22/2024: Down $0.04, $228.47.
LEAN HOGS:
The lean hog market had a stellar day as rumors that Chinese pork producers have been encouraged to scale back their operations lended more opportunity for the U.S. hog market. Whenever there's an opportunity for more export business on the horizon, traders grow encouraged by the news and today's futures market reaction is a direct result of that.
February lean hogs closed $2.37 higher at $73.30, April lean hogs closed $2.70 higher at $80.32 and June lean hogs closed $1.57 higher at $93.35. The afternoon's pork cutout value didn't perform as well as hoped as slight reductions were seen across most of the cuts, but the butt and ham saw the steepest regression day over day. Pork cutouts totaled 356.85 loads with 325.95 loads of pork cuts and 30.90 loads of trim. Pork cutout values: Down $2.14, $88.03.
Tuesday's slaughter is estimated at 487,000 head -- 33,000 head more than a week ago and 6,000 head less than a year ago. The CME lean hog index 1/19/2024: Up $0.34, $68.40.
WEDNESDAY'S HOG CALL: Steady. Given that pork cutout values closed lower, packers are likely cautious in their buying come Wednesday.
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