GENERAL COMMENTS:
The market moved slowly ahead of the afternoon's Cattle Inventory report, but the wait was worth the time as today's report showcased bullish findings for the cattle market. Still no cash cattle trade has developed but today's report should help feedlots secure higher prices as bullish attitudes summarize the market's demeanor. Hog prices closed higher on the Daily Direct Morning Hog Report, up $3.16 with a weighted average price of $62.56 on 5,677 head. March corn is up 1/2 cent per bushel and March soybean meal is up $5.30. The Dow Jones Industrial Average is down 317.01 points.
LIVE CATTLE:
Traders may have been apprehensive about overly supporting the market ahead of seeing what Wednesday's Cattle Inventory report amounted to, but thankfully the report was rather bullish for the industry and should merit higher trade on Thursday. February live cattle closed $0.67 lower at $177.35, April live cattle closed $1.05 lower at $180.70 and June live cattle closed $0.35 lower at $178.87. The only question that the market/traders have left to answer regarding nearby trading behavior is whether or not optimism surrounding the Inventory report has already been built into the market or if there's still more upward potential left in this move. Time will tell but the fact that supplies remain incredibly thin should garnish higher prices. The cash cattle market still hasn't traded this week but it's likely that by Thursday packer interest will increase. There were some light scattered sales reported in Kansas at $176 and in Iowa at $175 live and $275 dressed but those were only on a small sampling. Wednesday's slaughter is estimated at 127,000 head -- 1,000 head more than a week ago and 2,000 head more than a year ago.
Boxed beef prices closed lower: choice down $1.53 ($294.54) and select down $2.88 ($284.17) with a movement of 113 loads (68.06 loads of choice, 17.76 loads of select, 12.97 loads of trim and 14.28 loads of ground beef).
THURSAY'S CATTLE CALL: Higher. Given that slaughter speeds have been aggressive this week, it's likely that packers will have to become more aggressive in procuring cattle in order to ensure that they're not short bought moving forward.
FEEDER CATTLE:
Traders weren't willing to take much more risk ahead of seeing what Wednesday's Cattle Inventory report unveiled. To feeder's benefit, the report showed fewer cows in the market and a smaller calf crop as well.
It's likely that trade will be higher on Thursday as traders will then have an opportunity to react to the report's findings. March feeders closed $1.17 lower at $240.15, April feeders closed $0.85 lower at $246.15 and May feeders closed $0.42 lower at $251.80. At Kingsville Livestock Auction in Kingsville, Missouri compared to last week steer calves under 700 pounds sold $5.00 to $15.00 higher and the heavier calves and yearlings sold $5.00 to $8.00 stronger. Feeder sold $5.00 to $10.00 higher. The feeder cattle supply over 600 pounds was 61%. The CME feeder cattle index 1/30/2024: up $0.04, $236.32.
LEAN HOGS:
The spot April contract closed slightly lower but the rest of the lean hog market was able to rally on through the day's close. February lean hogs closed $0.50 higher at $76.35, April lean hogs closed $0.07 lower at $84.82 and June lean hogs closed $0.15 higher at $97.90. The pork cutout carcass price again fell lower as there were steady losses seen across all the cuts except the belly which dropped dramatically Tuesday afternoon. Slaughter has been more aggressive this past week, which has helped encourage packers to be slightly more active in the cash market. Pork cutouts totaled 310.86 loads with 272.33 loads of pork cuts and 38.53 loads of trim. Pork cutout values: down $0.99, $87.56. Wednesday's slaughter is estimated at 491,000 head – 2,000 head less than a week ago and 5,000 head more than a year ago. The CME lean hog index 1/29/2024: up $0.88, $71.48.
THURSDAY'S HOG CALL: Lower. Given that packers bought more hogs and saw prices increase throughout Wednesday's trade likely means that they'll be less aggressive in Thursday's market.
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