GENERAL COMMENTS:
It was another powerful day for the livestock complex as traders pushed all three of the livestock markets higher through closing. A few cattle traded in the South for $174, but the cash cattle market still needs to trade more before the week's end. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $5.76 with a weighted average price of $53.10 on 3,665 head. March corn is up 5 3/4 cents per bushel and March soybean meal is up $2.20. The Dow Jones Industrial Average is down 98.93 points.
Wednesday's Cold Storage report shared that total red meat supplies in freezers were up 4% from the previous month but down 9% from a year ago. Total pounds of beef in freezers were up 6% from the previous month but down 11% from last year. Frozen pork supplies were down 3% from last month but down 6% from last year. Stocks of pork bellies were up 16% from last month but down 11% from last year.
LIVE CATTLE:
The live cattle complex rounded out Wednesday's close with higher prices yet again. As the market moves into the later part of the week amid a weaker close in box prices, the question traders are pressed to answer is: how much higher, if higher at all? Thankfully the cash cattle market is lending some support as it's beginning to trade at $174 in the South, which is $1 higher than last week's weighted average, but the North has yet to trade. Asking prices in the North are firm at $276 plus and in the South at $176 plus. More cattle will need to trade before the week's over. February live cattle closed $0.70 higher at $175.35, April live cattle closed $0.52 higher at $178.35 and June live cattle closed $0.50 higher at $175.45. Wednesday's slaughter is estimated at 126,000 head -- 8,000 head more than a week ago and steady from a year ago.
Boxed beef prices closed lower: Choice down $2.16 ($299.50) and select down $1.14 ($287.24) with a movement of 126 loads (77.54 loads of choice, 26.42 loads of select, 4.93 loads of trim and 17.32 loads of ground beef).
THURSDAY'S CATTLE CALL: Steady to $1 higher. Given that higher notes have been already established in this week's market, cattle likely will continue to trade for at least $1 higher than last week's weighted average, but there is the chance they could trade even higher as packers bought very few cattle last week.
FEEDER CATTLE:
Even though the corn complex closed $0.04 to $0.05 higher in most contracts, the feeder cattle market was unfazed as it found strength in the demand for feeders in the countryside and continues to see excellent support from the live cattle market. The simple fact is that there aren't many calves/feeders to be had as so many cattle were marketed early this year and are already in feedlots. March feeders closed $0.12 higher at $233.77, April feeders closed $0.25 higher at $239.80 and May feeders closed $0.35 higher at $245.10.
At Winter Livestock Auction in La Junta, Colorado, feeder steers under 500 pounds traded unevenly steady but steers over 500 pounds sold $6 to $12 higher. Feeder heifers sold $5 to $14 higher in all weight divisions. Feeder cattle supply over 600 pounds was 47%. The CME feeder cattle index 1/23/2024: Up $1.74, $230.21.
LEAN HOGS:
The lean hog market hasn't slowed down whatsoever as the market charged through Wednesday's end even after Tuesday's big jump. The hog market's biggest excitement is that there could be more export opportunities soon given that China is cutting back on its domestic pork production. Pork cutout values closed higher this afternoon, but the cutout price was slightly skewed as the belly jumped over $7 higher. February lean hogs closed $0.60 higher at $73.90, April lean hogs closed $1.70 higher at $82.02 and June lean hogs closed $1.50 higher at $94.85.
Pork cutouts totaled 284.81 loads with 255.99 loads of pork cuts and 28.81 loads of trim. Pork cutout values: Up $0.83, $88.86. Wednesday's slaughter is estimated at 493,000 head -- 4,000 head more than a week ago and 5,000 head more than a year ago. The CME lean hog index 1/22/2023: up $0.35, $68.75.
THURSDAY'S HOG CALL: Higher. Given that packers haven't bought many hogs in this week's cash market, it's likely they'll be slightly more aggressive on Thursday.
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