Thursday Closing Livestock Market Update - Cattle Trade Lower while Hogs use Strong Export Support as Means to Trade Higher

GENERAL COMMENTS:

It was a mixed day for the livestock complex as the cattle complex struggled to must up any technical support, but the lean hog complex thrived on the unveiling of yet another strong export report. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.02 with a weighted average price of $75.49 on 1,645 head. May corn is up 1 cent per bushel and May soybean meal is up $1.70. The Dow Jones Industrial Average is up 39.84 points.

Thursday's weekly Export Sales and Shipments report shared that beef net sales of 12,200 metric tons (mt) for 2024 were down 3% from the previous week and 26% from the prior four-week average. The three largest buyers were Japan (4,300 mt), South Korea (2,000 mt) and Mexico (1,300 mt). Pork net sales of 32,400 mt for 2024 were up 12% from the previous week but down 11% from the prior four-week average. The three largest buyers were Mexico (14,500 mt), South Korea (5,200 mt) and Canada (3,500 mt).

LIVE CATTLE:

The live cattle complex had a bah-humbug attitude all throughout the day as traders seemed annoyed with the fact that the cash cattle market is trading steady. Trading steady isn't a defeat but when news started to surface that cattle were being bought with time (delivery for the week of March 11th) pressure really started to build in the minds of cattlemen. Packers have made it a goal to keep the cash cattle market in check and the two ways that they'll go about doing that is by running slower chain speeds and building up inventory around them. They were able to successfully do that this week with getting cattle bought with time. April live cattle closed $0.77 lower at $185.35, June live cattle closed $0.95 lower at $181.22 and August live cattle closed $0.60 lower at $180.70. Trade was mostly steady in the cash market with live prices marked at $183 and dressed cattle selling for $290. 

Thursday's slaughter is estimated at 123,000 head -- steady with a week ago and 1,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.17 ($304.20) and select up $1.24 ($294.18) with a movement of 130 loads (78.02 loads of choice, 23.04 loads of select, 15.20 loads of trim and 13.53 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady. Given that trade has developed in both regions, it's likely that prices remain steady with the week's trend at this point.

FEEDER CATTLE:

The feeder cattle complex closed lower as the market struggled to find substantial technical support throughout Thursday's trade. Demand continues to be strong in the countryside for calves and feeders, but with the live cattle contracts also trading lower -- the market stood little chance of closing higher. March feeders closed $0.60 lower at $249.00, April feeders closed $1.37 lower at $253.72 and May feeders closed $1.85 lower at $256.12. At La Junta Livestock Commission in La Junta, Colorado compared to last week feeder steers under 550 pounds sold $8.00 to $17.00 higher with instances of prices even higher than that. Steers over 550 pounds traded $3.00 to $15.00 lower on a light test. Feeder heifers under 350 pounds sold $4.00 to $10.00 higher, heifers between 350 and 500 pounds traded $1.00 to $7.00 lower but heifers over 500 pounds traded $1.00 to $20.00 higher. The CME feeder cattle index for 2/28/2024: down $0.54, $246.26.

LEAN HOGS:

The lean hog complex was hopeful that Thursday's export report would show strong international pork demand and thankfully hog enthusiasts were granted a support report. Pork cutout values here in the US still remain somewhat unstable as big swings in the belly are gravely affecting carcass prices. Yes, cash hog prices did close higher, but with the day's total volume less than 2,000 head – it's hard to say that the market did much of anything. April lean hogs closed $0.62 higher at $86.62, June lean hogs closed $0.65 higher at $100.20, and July lean hogs closed $0.67 higher at $101.47. Pork cutouts totaled 283.22 loads with 258.03 loads of pork cuts and 25.19 loads of trim. Pork cutout values: down $0.12, $90.22. Thursday's slaughter is estimated at 491,000 head -- 1,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index 2/27/2024: up $0.13, $79.91.

FRIDAY'S CASH CALL: Lower. It's likely that packers have already secured the hogs they need from the cash market this week.

Thursday Midday Livestock Market Update - Strong Pork Exports Help Trade

GENERAL COMMENTS:

The lean hog complex is trading higher as the market is thankful to see plentiful pork interest. Meanwhile, the cattle contracts are lower as the cash market's steady trade isn't lighting traders' spark. May corn is down 1/2 cent per bushel and May soybean meal is up $3.80. The Dow Jones Industrial Average is down 72.89 points.

Thursday's weekly Export Sales and Shipments report shared that beef net sales of 12,200 metric tons (mt) for 2024 were down 3% from the previous week and 26% from the prior four-week average. The three largest buyers were Japan (4,300 mt), South Korea (2,000 mt) and Mexico (1,300 mt). Pork net sales of 32,400 mt for 2024 were up 12% from the previous week but down 11% from the prior four-week average. The three largest buyers were Mexico (14,500 mt), South Korea (5,200 mt) and Canada (3,500 mt).

LIVE CATTLE:

Live cattle futures are reacting poorly to cash cattle trading at steady prices as traders have grown accustomed to hearing about higher cash prices. One would think that with the regression in chain speeds, traders would be thankful cash prices aren't lower and find additional comfort in the fact that beef prices are continuing to show support. But as the market nears Thursday's noon hour, the trend is lower throughout all the live cattle contracts. April live cattle are down $0.40 at $185.75, June live cattle are down $0.52 at $181.65 and August live cattle are down $0.50 at $180.80. A few more cash cattle sales have been reported in the North at $183 -- in Western Nebraska to be specific. These prices are steady with last week's business and a couple of bids are currently being offered for dressed at $290 in Nebraska as well. A few more sales have been reported in Texas at $183, which is steady with last week's business.

Boxed beef prices are higher: choice up $0.40 ($303.43) and select up $2.01 ($294.95) with a movement of 70 loads (34.97 loads of choice, 11.52 loads of select, 12.46 loads of trim and 10.86 loads of ground beef).

FEEDER CATTLE:

The cash cattle market's steady trade has left a sour taste in traders' mouths and is affecting both the live cattle and feeder cattle markets. Demand out in the countryside remains incredibly strong, but from a technical standpoint the market is lagging this week and showing signs of exhaustion. March feeders are down $0.62 at $248.97, April feeders are down $1.57 at $253.52 and May feeders are down $1.85 at $256.10.

LEAN HOGS:

The lean hog complex is continuing to trade higher as the market is thankful for strong pork interest which has been dually noted Thursday in the morning's export sales report and midday pork cutout values that are slightly higher. April lean hogs are up $0.55 at $86.55, June lean hogs are up $0.97 at $100.52 and July lean hogs are up $0.85 at $101.65. It's likely packers have virtually boughten up all the hogs they're going to this week as there were no new sales reported Thursday morning and given that sales were more numerous at higher prices on Tuesday and Wednesday.

The projected CME Lean Hog Index for 2/28/2024 is up $0.24 at $80.15, and the actual index for 2/27/2024 is up $0.13 at $79.91. Hog prices are unavailable on the Daily Direct Morning Hog Report because no hogs have traded. Pork cutouts total 170.16 loads with 154.20 loads of pork cuts and 15.97 loads of trim. Pork cutout values: up $0.16, $90.50.

Thursday Morning Livestock Market Update - Cattle Futures May Show Further Weakness

GENERAL COMMENTS:

Cattle had a tough Wednesday with futures generally opening lower and remaining that way most of the day. Some cash cattle traded in the South at even money with last week. Hopefully, cash will not trade lower, or futures could see further pressure. Thursday is the last trading day for February live cattle and it does not look as if it will close the chart gap, which it was so close to accomplishing the past few days. Boxed beef is providing some support as choice was up $1.29 with select up $2.54 on Wednesday. This indicates demand is holding for now. Feeder cattle futures had a larger price correction with contracts through May more than $3.00 lower. Feeder cattle and calves continue to command higher prices at auctions as supplies are tight.

Hog futures were able to close slightly higher Wednesday, but could not hold the strength of the day. However, this continues to provide support to the market, keeping the uptrend intact. The weekly export sales report Thursday morning needs to show strong exports to keep the bullish sentiment alive. The National Daily Direct Afternoon Hog report showed a gain of $1.77, moving the weighted average to $74.47. Cash may likely trade higher Thursday as packers need to finish up purchases for the week to maintain the strong slaughter pace. Cutouts took a hit Wednesday with values down $1.53. Trading in futures could be mixed as traders assess stronger cash with weaker cutouts.

	BULL SIDE		BEAR SIDE
1)	Steady cash cattle trade should provide support under the market with the April contract maintaining a premium.	1)	If cash cattle trade is steady this week, the upside price potential of futures may be limited.
2)	Feeder cattle remain in demand at auctions with tight supplies and optimism over higher beef prices.	2)	A greater market correction is possible to relieve the overbought technical condition of futures. Further liquidation could take place Thursday.
3)	Hog futures continue to trend higher with fundamentals friendly to the market for the time being. Traders continue to add to their long positions.	3)	Hog futures could reach a plateau and begin to develop a sideways trading pattern for a time.
4)	Export sales have been supportive with good export sales expected in Thursday's report.	4)	If export sales slow, it could begin to change trader sentiment as more international demand provides some support to the market. If prices become too high, export demand may decline.

Wednesday Closing Livestock Market Update - Cattle Close Slightly Lower; Southern Cattle Sell Steady

GENERAL COMMENTS:

It was a slow and lethargic day for the cattle contracts as little excitement developed. Some cash cattle sales were reported in the South at $183, which is steady with last week's weighted average. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.77 with a weighted average price of $74.47 on 1,668 head. May corn is up 5 cents per bushel and May soybean meal is up $2.60. The Dow Jones Industrial Average is down 23.39 points.

LIVE CATTLE:

Live cattle futures closed lower as the market anticipated steady cash cattle trade and was proven right when trade started to slowly develop this afternoon. It didn't look like trade was going to really develop until later in the week, but as the afternoon began to play out, packers and feedlots settled on steady prices in the South and cattle began to lightly trade.

Of the few head of cattle traded, Southern cattle have been marked at $183, which is steady with last week's business, but Northern cattle have yet to sell. Yes, boxed beef prices did close higher and choice cuts are up to $303.03 now, but traders seem more concerned with cash trade than the strong nature of the boxes right now. April live cattle closed $1.60 lower at $186.12, June live cattle closed $1.40 lower at $182.17 and August live cattle closed $1.37 lower at $181.30. Wednesday's slaughter is estimated at 125,000 head -- 5,000 head more than a week ago and steady with a year ago.

Boxed beef prices closed higher: Choice up $1.29 ($303.03) and select up $2.54 ($292.94) with a movement of 149 loads (84.16 loads of choice, 21.10 loads of select, 16.86 loads of trim and 27.04 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. Given that Southern cattle have begun to trade for steady prices, the week's trend is likely set.

FEEDER CATTLE:

The feeder cattle complex grew weary as the market had little technical support backing its market throughout Wednesday's trade. Between seeing the live cattle contracts trade tiredly and the corn complex trading $0.04 to $0.05 higher in its nearby contracts, the contracts ultimately closed lower despite the market still seeing tremendous demand in the countryside. March feeders closed $3.40 lower at $249.60, April feeders closed $3.85 lower at $255.10 and May feeders closed $3.35 lower at $257.97. At Winter Livestock Auction in Dodge City, Kansas, compared to last week and at its midsession point, feeder heifers weighing over 600 pounds sold for $7 to $12 higher, while eight-weight steers were selling for $5 to $9 more. Feeder cattle supply over 600 pounds was 88%. The CME feeder cattle index for Feb. 27: Down $0.09, $91.23.

LEAN HOGS:

The lean hog complex closed higher as the market found some technical strength after closing lower earlier in the week. April lean hogs closed $0.10 higher at $86, June lean hogs closed $0.22 higher at $99.55 and July lean hogs closed $0.35 higher at $100.80. It was disappointing, however, to see pork cutout values end the day lower. With a $7.99 drop in the belly, the carcass price stood little chance of seeing a positive ending value. Thursday's export report will hopefully continue to encourage the market. Pork cutouts totaled 276.22 loads with 226.37 loads of pork cuts and 49.85 loads of trim. Pork cutout values: Down $1.53, $90.34. Wednesday's slaughter is estimated at 491,000 head, 1,000 head more than a week ago and 21,000 head more than a year ago. The CME lean hog index Feb. 26: Up $0.32, $79.78.

THURSDAY'S HOG CALL: Steady to somewhat lower. Given that cash prices have closed higher two days in a row, it likely means that Thursday's market won't see as much interest and prices could be lower.

Wednesday Midday Livestock Market Summary - Cattle Futures See Mild Technical Pressure

GENERAL COMMENTS:

The livestock complex is a mixed playing field for the futures as the cattle contracts are enduring some pressure, but the lean hog market is continuing to trade higher. No cash cattle trade has developed yet and it's likely trade will be delayed until Thursday. May corn is up 4 3/4 cents per bushel and May soybean meal is up $5.10. The Dow Jones Industrial Average is down 65.28 points.

LIVE CATTLE:

The live cattle complex is trading lower as traders are seeming to hit the pause button on the market's technical ambitions. April live cattle are down $1.05 at $186.67, June live cattle are down $1.15 at $182.42 and August live cattle are down $1.30 at $181.37. It is positive, however, that midday boxed beef prices are stronger and, as long as the afternoon prices round out the day higher as well, Thursday's market could see slightly more interest and support. The cash cattle market hasn't seen any interest develop as packers know feedlots will again be after more money this week. This week's cash cattle market will again be a battle of wills between packers and feedlots. No bids are currently offered and it's likely trade will be delayed until Thursday. Southern asking prices are noted at $185 to $186 and continue unestablished in the North.

Boxed beef prices are higher: choice up $0.67 ($302.41) and select up $2.50 ($292.90) with a movement of 82 loads (47.34 loads of choice, 11.88 loads of select, 14.06 loads of trim and 8.83 loads of ground beef).

FEEDER CATTLE:

It's a tough technical day for the feeder cattle futures as the market is trading $1.00 to $2.00 lower. The market's weakness mostly stems from traders' hesitancy as the live cattle complex isn't trading higher either and countryside demand remains plentiful. March feeders are down $2.37 at $250.62, April feeders are down $2.75 at $256.20 and May feeders are down $2.60 at $258.72. At this point, without any cash cattle trade having developed, it's likely the market keeps this lower tone through the afternoon and closing.

LEAN HOGS:

After closing lower Tuesday afternoon, lean hog futures are back to trading higher. Midday pork cutout values are lower, but we know better than to put much clout in midday pork cutout values; what really matters is the afternoon carcass price. The market is hoping to see another strong export sales report Thursday and if traders do indeed see substantial export interest, the market's higher trend could continue. Cash prices are sharply higher, but only on mere 581 head. April lean hogs are up $0.92 at $86.80, June lean hogs are up $0.80 at $100.12 and July lean hogs are up $0.87 at $101.30.

The projected CME Lean Hog Index for 2/27/2024 is up $0.13 at $79.91, and the actual index for 2/26/2024 is up $0.32 at $79.78. Hog prices are higher on the Daily Direct Afternoon Hog Report, up $3.40 with a weighted average price of $74.10, ranging from $71.00 to $75.00 on 581 head and a five-day rolling average of $72.34. Pork cutouts total 184.66 loads with 152.64 loads of pork cuts and 32.03 loads of trim. Pork cutout values are down $1.28, $90.59.

Wednesday Morning Livestock Market Update - Traders Uncertain About Price Strength

GENERAL COMMENTS:

Cattle still felt uncertainty about price direction after the Cattle on Feed report Friday. Placements in January being higher than expected do not change the tight supply of cattle the market continues to face. It will be up to continued strong demand to maintain and improve prices. There was some weakness in choice boxed beef Tuesday, but it was negligible with a loss of $0.05. However, select cuts were strong, posting a gain of $2.41. The price increase in cash cattle last week will be difficult to duplicate this week with packers likely holding the line with steady cash at best.

Both cash and cutouts showed some life Tuesday. Packers were more aggressive with the National Daily Direct Afternoon hog report showing a gain of $1.79, moving the weighted average to $72.70. Further strength could unfold Wednesday as packers look to procure the hogs they need for the week. Cutouts increased by $0.88. The June through December contracts established new highs again but could not hold at those levels. The uptrend remains intact.

	BULL SIDE		BEAR SIDE
1)	The chart gaps in the February and April contracts have yet to be filled. Prices are hovering just below the gaps with only two days remaining in February to accomplish the task.	1)	Cattle futures have not been able to push higher so far this week, which may indicate price resistance is building. Higher prices may cause consumer resistance.
2)	Cash cattle trade at steady money this week should continue to provide strong support under the market.	2)	The February live cattle contract goes off the board Thursday with April already holding a premium. This may limit further upside unless cash increases.
3)	Higher cash hogs and the increase in cutouts should support the market Wednesday. The packers should remain aggressive as they look to purchase hogs to maintain the strong slaughter pace.	3)	Hog futures are overbought and ripe for a technical price correction.
4)	Hog futures continue to push higher with contracts making higher highs and higher lows for the past four days, keeping the uptrend intact.	4)	Demand for pork needs to remain strong or packers may pull back the slaughter pace and be less aggressive in buying hogs.

Tuesday Closing Livestock Market Update - Lackadaisical Tones Dominate

GENERAL COMMENTS:

It was a lackadaisical day for the livestock complex as traders only paid the market minimal attention. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.79 with a weighted average price of $72.70 on 5,422 head. May corn is up 2 cents per bushel and May soybean meal is down $3.70. The Dow Jones Industrial Average is down 96.82 points.

LIVE CATTLE:

The live cattle complex wasn't able to round out the day on a stronger note -- but the day's biggest takeaway was that choice cuts endured a little pressure. It's been invigorating for the market to see beef demand push choice cuts above $300.00 (which hasn't been a price point achieved since last October), but now that choice cuts have closed slightly lower -- market participants will be carefully watching to see what trend develops later throughout the week. Still no cash cattle trade has developed, but asking prices are noted in the South at $185 to $186, while the North's asking prices remain unestablished. Trade isn't expected to develop until Thursday or Friday and prices are expected to hold at least steady. April live cattle closed $0.37 lower at $187.72, June live cattle closed $0.52 lower at $183.57 and August live cattle closed $0.52 lower at $182.67. 

Tuesday's slaughter is estimated at 125,000 head -- steady with a week ago and 1,000 head less than a year ago.

Boxed beef prices closed mixed: choice down $0.05 ($301.74) and select up $2.41 ($290.40) with a total movement of 100 loads (59.29 loads of choice, 14.38 loads of select, 13.26 loads of trim and 12.92 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Steady. It's unlikely that trade will develop as early as Wednesday, but when trade does develop, feedlots are expected to price cattle higher while packers try to keep prices no better than steady following last week's $3.00 to $4.00 advancement.

FEEDER CATTLE:

The feeder cattle complex was able to close mixed even though corn prices closed slightly higher and even though the live cattle complex didn't lend much support. Feeder cattle sales and buyer demand continue to remain extremely strong in the countryside which is helping the market maintain its confidence. March feeders closed $0.05 lower at $253.00, April feeders closed $0.05 higher at $258.95 and May feeders closed $0.25 lower at $261.32. At Sioux Falls Regional Cattle Auction in Worthing, South Dakota compared to last week steers weighing 500 to 550 pounds sold $4.00 higher, steers weighing 600 to 650 pounds traded $2.00 to $4.00 lower and steers weighing 700 to 750 pounds traded $6.00 higher. A large offering of steers weighing 800 to 850 pounds sold $5.00 to $10.00 higher. Heifers weighing 450 to 500 pounds sold $4.00 to $8.00 stronger, and heifers weighing 550 to 700 pounds sold $2.00 to $5.00 lower. Feeder cattle supply over 600 pounds was 83%. The CME feeder cattle index 2/26/2024: down $0.18, $246.46.

LEAN HOGS:

The lean hog complex closed mixed as the market's nearby contracts closed lower while the deferred contracts closed slightly higher. Thankfully pork cutout values ended stronger as both the loin (up $3.47) and the rib (up $4.61) saw substantial gains. The added support of stronger pork cutout values and slightly better cash interest could lend Wednesday's market more strength. April lean hogs closed $0.37 lower at $85.90, June lean hogs closed $0.52 lower at $99.32 and July lean hogs closed $0.10 lower at $100.45. Pork cutouts totaled 319.53 loads with 271.53 loads and 48.00 loads of trim. Pork cutout values: up $0.88, $91.87. Tuesday's slaughter is estimated at 491,000 head -- 1,000 head more than a week ago and 4,000 head more than a year ago. The CME lean hog index 2/23/2024: up $0.36, $79.46.

WEDNEDSAY'S HOG CALL: Steady. Given that cash prices closed stronger today, prices could be steady on Wednesday as packers may still need to buy some more hogs but won't likely do so to the degree in which cash prices turn much higher.

Tuesday Midday Livestock Market Summary - Holding Tones Summarize Livestock Business

GENERAL COMMENTS:

The livestock complex is trading lower as the market finds little interest from traders. No cash cattle trade has developed and it's likely that trade will be delayed until later in the week. May corn is up 3 cents per bushel and May soybean meal is down $2.30. The Dow Jones Industrial Average is down 171.84 points.

LIVE CATTLE:

The live cattle complex is trading mildly lower as the market is in a holding spell like the rest of the livestock contracts. Traders have noted however that boxed beef prices are higher again and that the choice cut is well above $300.00. The additional strength of the boxed beef market could pressure packers to up chain speeds as they'd like to capitalize on good beef prices – but if they do so they'll likely have to pay slightly higher prices in this week's cash market again. No cash cattle trade has developed yet and it's likely that trade is delayed until Thursday or Friday. Asking prices in the South are noted at $185 to $186 but remain unestablished in the North. April live cattle are down $0.62 at $187.45, June live cattle are down $0.77 at $183.32 and August live cattle are down $0.77 at $182.42.

Boxed beef prices are higher: choice up $0.45 ($302.24) and select up $2.73 ($290.72) with a movement of 58 loads (33.05 loads of choice, 6.31 loads of select, 8.99 loads of trim and 9.69 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is trading lower again as the market seems to be waiting for something -- whether that's a weaker tone in corn prices, some action in the cash cattle market, or a positive move in the live cattle contracts -- the market seems to be at a stalemate at this point in time. March feeders are down $0.95 at $252.10, April feeders are down $0.75 at $258.15 and May feeders are down $1.10 at $260.47.

LEAN HOGS:

The lean hog complex hasn't found much support in Tuesday's market as traders simply seem uninterested in doing much trading in the hog sector. April lean hogs are down $0.32 at $85.95, June elan hogs are down $0.47 at $99.37 and July lean hogs are down $0.10 at $100.45. With pork cutout values higher the market could see trader interest improve, but traders could also wait until later in the week when they see how export sales fair before they do much trading.

The projected lean hog index for 2/26/2024 is up $0.32 at $79.78, and the actual index for 2/23/2024 is up $0.36 at $79.46. Hog prices are higher on the Daily Direct Morning Hog Report, up $0.61 with a weighted average price of $70.70, ranging from $67.00 to $72.50 on 1,614 head and a five-day rolling average of $72.29. Pork cutouts total 170.69 loads with 148.44 loads of pork cuts and 22.25 loads of trim. Pork cutout values: up $1.85, $92.84.

Tuesday Morning Livestock Market Update - Traders Wait for Cash Direction

GENERAL COMMENTS:

Live cattle futures did not share the sentiment of the bearishness of the placement number on the Cattle on Feed report. Early lower futures provided the opportunity for traders to buy into the market for the long term. The winter storm in some of cattle country may increase buying interest in futures as it takes place when there is some calving happening. The January Cold Storage report showed total beef in inventory decreased by 4.9 million pounds from December and was 11% below January 2023. Boxed beef was higher Monday with choice up $1.18 and select up $1.68. Feeder cattle remained under pressure Monday, but that is expected to be short-lived. The demand for feeder cattle and calves remains strong.

Hog futures held well Monday, even though there was cash weakness. Spread trading resulted in weakness in the April and May contracts, while later contracts were higher. Cash was lower to begin the week with the National Direct Afternoon Hog report showing a loss of $0.58, moving the weighted average to $70.91. In the past few weeks, packers have been more aggressive at the beginning of the week. This may limit upside movement unless cash moves higher. Cutouts finished the day lower with values down $0.17. The January Cold Storage report showed pork inventory at 468.0 million pounds, up 40.6 million pounds from December, a gain of 10%. However, inventory was down 10% from a year earlier. Bellies were down 8% from a year earlier.

	BULL SIDE		BEAR SIDE
1)	The February live cattle contract has three days remaining to close the chart gap before the contract ends. There is a strong possibility this may be accomplished.	1)	Beef demand may reach a plateau where consumers slow down purchases due to escalating prices.
2)	Even though placements on the Cattle on Feed report were higher than expected, they were 7% below a year ago, which should continue to provide support in the market.	2)	Cattle futures have increased substantially since December and may be ripe for a price retracement once the nearby contracts close the chart gaps.
3)	New highs were again made in the June through October hog futures contracts Monday, keeping the uptrend intact. Traders remain optimistic about demand.	3)	The recent weakness of pork cutouts may indicate prices have reached a level at which consumers may slow purchases.
4)	The packers may step up more aggressively to procure the hogs they need this week. Slaughter continues to remain brisk.	4)	Hog futures are overbought and could retrace at any time as the market corrects itself.

Monday Closing Livestock Market Update - Feeders React to the Corn Market's Higher Close

GENERAL COMMENTS:

The livestock complex rounded out Monday's trade mixed as the feeder cattle market shot lower in reaction to the corn market's higher trend, but both the live cattle and lean hog contracts closed mostly higher. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.58 with a weighted average price of $70.91 on 4,016 head. March corn is up 7 1/4 cents per bushel and May soybean meal is up $0.60. The Dow Jones Industrial Average is down 28.34 points.

Monday's Cold Storage Report shared that total red meat supplies in freezers were up 4% from the previous month but down 11% from last year. Total pounds of beef in freezers were down 1% from last month but down 11% from a year ago. Frozen pork supplies were up 10% from the previous month but down 10% from last year. Stocks of pork bellies were up 14% from last month but down 8% from a year ago.

LIVE CATTLE:

The live cattle complex closed slightly higher as the market elected to bypass fretting over Friday's Cattle on Feed report and focused on the strength that it's currently seeing in the boxed beef market along with the phenomenal strength that came from last week's cash market where prices traded $3.00 to $4.00 higher. April live cattle closed $0.20 higher at $188.10, June live cattle closed $0.22 higher at $184.10, and August live cattle closed $0.20 higher at $183.20. It will be especially interesting to track processing speeds over the next couple of weeks if choice cuts are able to stay above $300.00 as packers will be pressured to either keep processing speeds low to limit their need of the cash market, or they'll be incentivized by the added money in boxed beef prices to allow processing speeds to run a little faster. The latter obviously fairs better for feedlots as it will ensure that fed cattle supplies remain current. New showlists appear to be mixed, higher in Kansas and Nebraska/Colorado, but lower in Texas. Monday's slaughter is estimated at 122,000 head -- 18,000 head more than a week ago but 1,000 head less than a year ago.

Last week Southern live cattle traded at $183, $3 higher than last week's weighted average, while Northern dressed cattle traded for mostly $292, $4 higher than last week's weighted average. Last week's negotiated cash cattle trade totaled 72,872 head. Of that, 90% (65,774 head) were committed to nearby delivery while the remaining 10% (7,098 head) were committed for deferred delivery.

Boxed beef prices closed higher: choice up $1.18 ($301.79) and select up $1.68 ($287.99) with a movement of 82 loads (50.73 loads of choice, 9.87 loads of select, 9.96 loads of trim and 11.70 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady. Given that last week's market saw $3.00 to $4.00 added, packers could be less aggressive this week simply to ensure that prices don't creep any higher.

FEEDER CATTLE:

The feeder cattle complex traded all over the place throughout Monday's market as the report dodged the pressure of last week's bearish Cattle on Feed report, but still closed lower thanks to the $0.07 to $0.08 gain in the corn complex. The live cattle market did however round out the day higher which will likely be the same direction that feeders take later in the week so long as sales continue to report strong feeder cattle interest -- which is nearly inevitable with how thin supplies currently are. March feeders closed $1.52 lower at $253.05, April feeders closed $1.07 lower at $258.90 and May feeders closed $0.50 lower at $261.57. At Oklahoma National Stockyards in Oklahoma City, Oklahoma compared to last week and at their midsession point, feeder steers were trading steady to $2.00 higher, but steers over 850 pounds were trading $5.00 higher. Feeder heifers were trading $2.00 to $4.00 higher. Steer and heifer calves were selling mostly steady. Feeder cattle supply over 600 pounds was 54%. The CME feeder cattle index 2/23/2024: up $1.96, $246.64.

LEAN HOGS:

The lean hog complex closed mostly higher other than in its spot April contract, which could have closed lower simply because pork cutout values ended the day weaker. April lean hogs closed $0.92 lower at $86.27, June lean hogs closed $0.47 higher at $99.85 and July lean hogs closed $0.35 higher at $100.55. If pork cutout values were to close lower I would have naturally guessed that it was because the belly closed lower -- but that wasn't the case today. The cuts closed mixed all across the board but the biggest day-over-day loss was seen in the ham which fell $2.76. Pork cutouts totaled 296.46 loads with 258.41 loads of pork cuts and 38.06 loads of trim. Pork cutout values: down $0.17, $90.99. Monday's slaughter is estimated at 492,000 head -- 2,000 head more than a week ago and 9,000 head more than a year ago. The CME lean hog index 2/22/2024: up $0.32, $79.10.

TUESDAY'S HOG CALL: Steady/somewhat higher. Given that packers weren't aggressive in Monday's market, they'll have to get more aggressive at some point this week.

Monday Midday Livestock Market Summary - Cattle Turn Higher, Forget Friday's Cattle on Feed

GENERAL COMMENTS:

Cattle contracts are continuing to trade higher as traders aren't too concerned with Friday's bearish Cattle on Feed report. The lean hog market is trading mixed but if pork demand remains strong, the market could turn fully higher. March corn is steady and May soybean meal is steady. The Dow Jones Industrial Average is up 28.27 points.

LIVE CATTLE:

The live cattle market is trading fully higher into Monday's noon hour as the complex has elected to shake Friday's Cattle on Feed report and rather focus on the $3 to $4 gain seen last week in the cash market. April live cattle are up $0.67 at $188.57, June live cattle are up $0.22 at $184.10 and August live cattle are up $0.10 at $183.07. It's powerful to see that choice cuts are continuing to trade above $300 as that's been a price point the market has struggled to maintain. The increased price in boxed beef values could incentivize packers to run faster chain speeds, too.

Last week Southern live cattle traded at $183, $3 higher than last week's weighted average, while Northern dressed cattle traded for mostly $292, $4 higher than last week's weighted average. Last week's negotiated cash cattle trade totaled 72,872 head. Of that, 90% (65,774 head) were committed to nearby delivery while the remaining 10% (7,098 head) were committed for deferred delivery.

Boxed beef prices are higher: Choice up $1.45 ($302.06) and select up $1.81 ($288.12) with a movement of 48 loads (28.57 loads of choice, 4.38 loads of select, 8.67 loads of trim and 5.96 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex started the day out slightly lower as traders noted the findings of Friday's Cattle on Feed report, but given the strong fundamental footing of the market, traders have elected to ignore the report's bearish take and move on. March feeders are down $0.42 at $254.15, April feeders are up $0.12 at $260.10 and May feeders are up $0.55 at $262.62. With the strength seen last week in the fat cattle market, feeders are expected to maintain these prices, if not trade even a little higher, as demand continues to be an unwavering force in this year's cattle complex.

LEAN HOGS:

The lean hog complex is trading mixed as the market sees some pushback in its nearby contracts while most of the deferred months are trading slightly higher. April lean hogs are down $0.55 at $86.65, June lean hogs are up $0.55 at $99.92 and July lean hogs are up $0.30 at 100.57. The most encouraging factor that's surfaced in Monday's trade is that pork cutout values are higher to start the week but that is stemming from a $18.99 jump in the belly, which could be an unreliable source given that the cut saw a lot of pressure just last week.

The projected lean hog index for Feb. 23 is up $0.36 at $79.46, and the actual index for Feb. 22 is up $0.32 at $79.10. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.50 with a weighted average price of $70.09, ranging from $69 to $72 on 679 head and a five-day rolling average of $72.56. Pork cutouts total 171.09 loads with 154.24 loads of pork cuts and 16.85 loads of trim. Pork cutout values: Up $2.32, $93.48.

Monday Morning Livestock Market Update - Cattle Futures Expected to Open Lower

GENERAL COMMENTS:

Cattle futures received a boost from higher cash trade to close out last week. Southern cattle traded $3 higher with Northern dressed trading $4 higher. Traders had been preparing for the Cattle on Feed report but the jump in cash trumped the cautiousness over the report. Boxed beef was higher with choice up $0.82 and select up $0.50. These prices continue to reflect the tightness of the market and strong consumer demand. The Cattle on Feed report was negative in the placement category as USDA reported placements in January were 93% of a year ago. That was friendly due to placements being 7% lower. However, the number is 4.8% higher than the average trade estimate. On feed numbers as of Feb. 1 were 102% and slightly higher than the trade estimate. Marketings in January were 100% and right in line with the estimates. The reaction will likely push futures lower to begin the week. The Commitments of Traders report showed funds adding 7,565 futures contracts, moving their net-long position to 54,203 contracts. Feeder cattle showed funds adding 844 long futures positions, moving their net-long total to 7,398 contracts.

Hogs closed higher in all but the April contract. Contracts moved to new highs but did not hold at those levels. The July contract was able to push higher and close above $100 for the first time since March 1, 2023, when trading first began for the contract. The National Direct Afternoon Hog report showed cash down $1.71 with a weighted average price of $71.49. Cutouts closed lower with a loss of $0.73. If the recent pattern holds, packers may be somewhat aggressive Monday as they step up to purchase hogs to fill the strong slaughter pace. That would keep the uptrend intact. It is uncertain whether a potential bearish reaction to the Cattle on Feed report could spill over into hogs as it sometimes does. The Commitment of Traders report showed funds adding 13,514 futures contracts, bringing their net-long positions to 48,052 contracts.

	BULL SIDE		BEAR SIDE
1)	Cattle placements in feedlots were 7% below a year ago, indicating numbers will continue to remain tight.	1)	The placement number on the Cattle on Feed report was higher than the average trade expectations. This may result in selling as a kneejerk reaction to the report.
2)	Higher cash paid for cattle last week will keep feedlots bullish, looking for more this week.	2)	The last time choice cutouts were above $300, demand was affected, which resulted in lower prices as demand slowed.
3)	Demand for pork has been improving, keeping packers aggressive and the slaughter pace strong.	3)	Lower cash and cutouts Friday could impact the trade negatively Monday as prices may have reached a threshold.
4)	New highs again Friday should keep traders willing to add to the long positions they are already holding as the trend is up.	4)	Hog futures are overbought and could see a price correction if cash stabilizes.

Friday Closing Livestock Market Update - Higher Closes Secure Big Weekly Gains For Feeder, Hog Prices

GENERAL COMMENTS:

Livestock futures traded higher Friday and received further support after cash cattle trade was reported higher later Friday morning. Lean hog futures also had a good week with improving signs of demand.

From Friday to Friday, livestock futures scored the following changes: April live cattle up $0.35; June live cattle up $1.05; April feeder cattle up $6.42; May feeder cattle up $6.45; April lean hogs up $1.97, June lean hogs up $1.62; March corn down $0.16 3/4, May corn down $0.16.

LIVE CATTLE:

April live cattle closed up $1.35 at $187.90 Friday, erasing Thursday's $1.15 loss with help from higher cash trade. Late Friday morning, DTN reported trade starting to appear near $183 in the South, $3 higher on the week. Northern trade was reported near $292, $4 higher than a week ago. At 2 p.m. CST, USDA said there were 11.797 million head of cattle on feed as of Feb. 1 -- 133,000 less than a month ago, but 0.4% higher than a year ago and slightly more than expected. January placements totaled 1.792 million, down 7.4% from a year ago, but were more than expected. Marketings at 1.844 million head were nearly even with a year ago and as expected. Among the states, it was interesting to see a monthly decline of 90,000 head on feed in Kansas and a decline of 40,000 in Texas.

On the demand side, choice boxed beef finished at $300.61 Friday afternoon, up $4.41 on the week, while selects were down 35 cents at $286.31. USDA estimated this week's slaughter at 593,000, down 15,000 from the previous week, but that is not much of a concern in a week where cash cattle are trading higher. As long as the available supply of cattle remains limited and retail demand holds up, the price outlook remains bullish for live cattle and outweighs the bearish warning from Thursday's reversal.

MONDAY'S CATTLE CALL: Steady to lower Monday after Friday afternoon's on-feed report was only slightly bearish.

FEEDER CATTLE:

April feeder cattle closed up $3.27 at $259.97 Friday, the highest close in four months. The contract also showed the largest weekly percentage gain for the livestock sector, climbing $6.42. Ever since USDA counted 13.28 million calves in January, the lowest total since 1941, there has been little doubt that more calves will be needed in 2024.

The CME Feeder Index was $245.00 for Thursday, February 22, $14.97 below the April futures price a steep discount, but not out of line for a market with tight supplies. Technically speaking, April feeder cattle have closed up 10 of the past 11 weeks and prices show no sign of turning around yet.

LEAN HOGS:

April lean hogs were unchanged Friday, but finished up $1.97 on the week and posted their highest weekly close in seven months, thanks to increasing demand for cash hogs since the start of the new year. Friday afternoon's cut-outs ended the week at $91.16, a 59-cent gain from last Friday. Cut-outs remain well above cash hog prices, a good situation for packers still benefiting from active retail demand. The new twist is that since 2024 began, cash hog prices are also climbing.

Negotiated national cash hog prices ended at $71.49 Friday, $6.87 below the swine formula price of $78.27. Negotiated prices are up $25 since the first of the year, a significant improvement and a strong indication of how much packer demand has improved for pork, in general.

USDA estimated 2.578 million hogs were slaughtered this week, up slightly from the previous week. Thursday's report of average weights showed barrows and gilts down a pound on the week at 214 pounds, while sows gained 2 pounds to 300 pounds. The CME Hog Index was projected at $79.10 as of Thursday, Feb. 22, $8.10 below the April close.

Earlier Friday, USDA said 28,900 mt of pork were sold for export last week, thanks to leading purchases from Mexico and Japan. USDA also revised the previous week of pork sales from 71,900 mt to 33,736 mt, explaining that 38,164 mt of sales reported for China and Mexico were incorrectly reported last week.

MONDAY'S HOG CALL: Steady to lower in April hogs with traders possibly leery about prices near seven-month highs and some early bearish influence possible from cattle.

Friday Midday Livestock Market Summary - Prices Higher Early

GENERAL COMMENTS:

April live cattle, feeders and lean hog prices were all trading higher early Friday with feeders showing the strongest percentage gains. Friday's USDA report is expected to show 11.72 million head of cattle on feed.

LIVE CATTLE:

Back from Thursday's lower close, April live cattle futures are trading up $.95 at $187.50, still near their highest prices in four months, while the outlook for available cattle supplies remains limited in 2024 and everyone knows it. No significant cash trade has been reported yet as bids remain cautious ahead of Friday afternoon's on-feed report. Dow Jones' survey is expecting January placements to be down 13% from a year ago and 11.72 million head of cattle on feed on February 11, up slightly from a year ago, but down 214,000 from a month ago.

So far in 2024, the demand for beef appears to be going well as boxed beef prices have improved significantly since early January. Friday morning's USDA report showed choice boxed beef at $301.21, up over $5 on the week, while selects were up at $287.42 with a total load count of 79. Dow Jones estimated Friday's slaughter at 117,000, up from 116,000 a week ago. Thursday's dressed weights averaged 912 pounds for steers, up $3 on the week, and 830 pounds for heifers, down 3 pounds on the week. Friday's temperatures will range from the low 40s in South Dakota to the 70s in Texas with even warmer temperatures expected early next week. On Friday, USDA said 12,600 metric tons (mt) of beef were sold for export last week with Japan and South Korea named as top buyers. Early in 2024, beef exports are down 7% from a year ago.

FEEDER CATTLE:

April feeder cattle are trading up $2.02 at $258.72, staying near their highest prices in four months while waiting to hear more about this week's cash trade. The rebound from early December continues to push prices higher as everyone knows calves are in short supply in 2024. So far, there hasn't been much evidence that beef cows are being held back from slaughter yet. Thursday's U.S. Drought Monitor shows much less drought throughout the western Plains than a year ago and pastures should have better conditions in early 2024. There are some dry conditions in western Montana and smaller parts of the Plains, but overall, conditions look favorable for new calves and DTN is expecting more precipitation in March. The latest CME feeder index price of $244.49 is from Wednesday and is down 44 cents from a week ago. Technically speaking, April feeders have recovered much of their fourth-quarter loss and are trending higher again with noncommercials net long 3,333 contracts as of Feb. 13.

LEAN HOGS:

April lean hogs are trading up $0.62 at $87.82, extending Thursday's new seven-month high with ongoing signs of increased demand coming back to the pork market. In the last six months of 2023, negotiated cash hog prices collapsed from over $100 to just below $44 and they trailed formula prices by as much as $21 at the end of the year. As of Friday morning, USDA reported negotiated cash hogs at $71.59, down from Thursday and $7.08 below the swine formula quote of $78.68. Even so, packers are clearly more interested in bidding for negotiated supply than they were in late 2023 and that is a bullish sign of increased demand for hogs.

Friday morning's report of pork cutout values was up 37 cents at $92.26 on 209.90 loads. Cutouts were also up $1.69 for the week with one afternoon report to go. Friday morning's slightly higher cutout included a $10.03 drop in bellies and a $9.80 gain on picnics. CME's most recent lean hog index was projected at $79.10 for Feb. 22. Technically speaking, April hog prices are clearly trending higher and it will be interesting to see if prices eventually challenge major resistance at $91.60, the 2023 high.

Earlier Friday, USDA said 28,900 mt of pork were sold for export last week, thanks to leading purchases from Mexico and Japan. USDA also revised the previous week's pork sales from 71,900 mt to 33,736 mt, explaining that 38,164 mt of sales reported for China and Mexico were in error. So far in 2024, pork exports are up 10% from a year ago. Dow Jones estimated Friday's hog slaughter at 485,000, down 1,000 from last week. Thursday's average weights showed barrows and gilts down 1 pound at 214 pounds, while sows gained 2 pounds to 300 pounds.

Friday Morning Livestock Market Update - Traders Will Position Ahead of Report

GENERAL COMMNETS:

Technical traders seem to be trying their hardest to close the chart gaps in the February and April live cattle contracts but have failed so far. The February contract is running out of time with the last trading day Feb. 29. Cash cattle have not yet traded, other than the few earlier this week. The focus of both packers and traders is the Cattle on Feed report Friday afternoon. The estimates for the report are cattle on feed on Feb. 1 to be 100.1% with the trade estimates ranging from 99.4% to 101.1%. Placements are estimated at 88.2% with the estimates ranging from 81.6% to 94.9%. If the estimated placement number is correct, it would be the lowest placement number for January since 2007. January marketings are estimated at 100.0% with a range of 98.6% to 100.3%. Boxed beef was higher with choice up $1.99 and select up $1.35. Weekly export sales will be released Friday morning but are not expected to have an impact on the market.

Hog futures continued to push higher with April leading the way, posting a triple-digit gain. Futures nearly matched the high of June 26, 2023. It has been an impressive increase since the beginning of the year. Unfortunately, futures were not able to push through resistance. However, such was not the case with June as it moved above and closed above short resistance. Cash remained strong Thursday with the National Direct Afternoon Hog report up $0.58 to a weighted average of $73.20. Cutouts posted another nice gain with an increase of $1.72. Weekly export sales will be released Friday morning with USDA correcting inaccurate numbers in the previous report. Saturday hog slaughter is estimated at 133,000 head. The January Cold Storage report will be released Friday afternoon.

	BULL SIDE		BEAR SIDE
1)	February and April live cattle futures continue to move ever so much closer to closing the chart gaps with February having until Thursday to accomplish the task.	1)	Cattle futures falling back from the gains Thursday may indicate a friendly Cattle on Feed report is already be factored in.
2)	Placements are expected to be down substantially from a year ago, which should continue to support the market.	2)	If placements in January are reported to be higher than trade expectations, live cattle futures may fall back in reaction.
3)	May and later hog futures contracts closed at the highest level since March with strong support underpinning the market.	3)	Hog futures were unable to hold earlier gains Thursday, which could indicate price resistance may have been reached.
4)	Weekly hog weights declined 0.7 pound, averaging 288 pounds. The packers have been aggressive and are finding less tonnage available.	4)	The average weekly hog weights remain 2 pounds above a year ago, leaving more pork available for processing.

Thursday Closing Livestock Market Update - Bullish Morning Results in Mixed Closes

GENERAL COMMENTS:

What looked like a bullish day for livestock early Thursday ended with April hogs at a new seven-month high, April cattle lower and feeders modestly higher.

LIVE CATTLE:

April live cattle traded $1.50 higher early but turned lower at about 11 a.m. CST and finished down $1.15 at $186.55 Thursday. There was nothing in the morning data to worry the market as choice boxed beef prices were up $1.39 and selects were up $1.23. The lower close completed a bearish outside reversal near the contract's highest prices in four months with cattle on-feed report due out at 2 p.m. Friday. Dow Jones' survey of eight analysts expects USDA to report 11.72 million head of cattle on-feed as of February 1, up slightly from a year ago, but down 214,000 from the previous month. January placements are expected to be down 13% from a year ago. Cash cattle trade has been too light so far to establish a trend for the week.

Even though Thursday's reversal is possibly a bearish warning from a technical perspective, the fundamental price outlook remains bullish for cattle in 2024. Limited numbers of cattle and calves are well-known and boxed beef prices reflect active retail demand. On Thursday afternoon, USDA quoted choice boxed beef up $1.99 at $299.79 and selects up $1.35 at $285.81. Both prices are up roughly $25 from early January. Also Thursday afternoon, USDA said beef production totaled 2.28 billion pounds in January, down 2% from a year ago. Slaughter was down 3% and the average live weight was up 9 pounds from a year ago, at 1,389 pounds. Thursday's cattle slaughter totaled 123,000 head, the same as a week ago.

FRIDAY'S CATTLE CALL: Steady early Friday with traders cautious ahead of Friday afternoon's on-feed report.

FEEDER CATTLE:

Similar to live cattle, April feeders were trading $3.00 higher at one point Thursday and also turned lower around 11 a.m., but finished up $0.77 on the day at $256.70, a new four-month high. It was just over three weeks ago USDA estimated 13.28 million calves in the U.S., the smallest start to a year since 1941. With beef cow numbers also down and heifers showing up in the on-feed report as recently as January, the supply of feeder cattle is tight and that is not an easy problem to solve in the short run.

The CME Feeder Index was $244.49 for Wednesday, February 21, $7.56 below the April futures price. The feeder/live cattle ratio for April contracts is 1.38, 8% above the five-year average, but not out of line for a market with tight supplies. Technically speaking, April feeder cattle have closed up 8 of the past 9 weeks and are in good shape for 9 out of 10. The market has been trending higher since early December and shows no sign of reversing yet.

LEAN HOGS:

It has been almost one month since April lean hogs closed above both, their 100-day average and one-month high on January 23 and prices have followed through higher since, largely due to improved demand for cash hogs. Thursday afternoon's cut-outs were up $1.72 at $91.89 with help from a $6.01 gain in bellies and a $4.67 boost in hams, based on 230.97 loads. Cut-outs remain well above cash hog prices, a good sign of retail demand, but cash prices are also climbing. Negotiated national cash hog prices ended at $73.20 Thursday, just $4.87 below the swine formula price of $78.07. Negotiated prices are up $28 since the first of the year, no small improvement and a strong indication of how much packer demand has improved, not only for negotiated trade but for all hogs in less than two months.

Thursday afternoon, USDA said 2.47 billion pounds of pork was produced in January, 2% more than a year ago. Hog slaughter was also up 2% in January from a year ago, totaling 11.4 million head. The average live weight of 292 pounds was 1 pound lighter than a year ago. USDA estimated Thursday's hog slaughter at 490,000, up slightly from last week. The CME Hog Index was projected at $78.78 as of Wednesday, February 21, $8.42 below the April close.

There will be attention on Friday morning's pork export sales report from USDA. Last week, USDA said there were 71,900 metric tons (mt) of U.S. pork sold for export the previous week. On Tuesday, USDA said the amounts of 19,286 mt to China and 18,878 to Mexico were incorrect and new amounts will be issued in Friday's 7:30 a.m. CST report.

FRIDAY'S HOG CALL: Steady to higher in April hogs with support from improving cash demand.

Thursday Midday Livestock Market Summary - Lean Hog Prices Push New Highs Early

GENERAL COMMENTS:

April live cattle, feeders and lean hog prices were all trading higher earlier Thursday with hogs still pushing to new high ground. Live cattle and feeder cattle, however, have fallen back from earlier highs, showing caution ahead of Friday's on-feed report.

LIVE CATTLE:

April live cattle futures are trading down $.75 at $186.9 after challenging their highest prices in four months earlier Thursday morning. The outlook for supplies of available cattle remains limited in 2024. Monday's report of weighted averages left off with live steers at $180.35 and dressed steers at $286.61 for the five-state area, leaving room for higher cash trade this week. No significant trade has been reported yet and bids may be cautious ahead of Friday's on-feed report. So far in 2024, cattle slaughter is down 5.6% from a year ago, partly due to fewer cattle as well as a tough stretch of cold weather in January. On Thursday, USDA reported last week's actual slaughter at 617,013, more than the 608,000 estimated earlier.

USDA's report on Thursday morning showed choice boxed beef up $1.39 at $299.19, while selects were up $1.23 at $285.69 with a total load count of 69. Overall, the U.S. economy has been supportive of continued beef demand at the retail counter as boxed beef prices have rebounded since early January. This week's forecast is mostly dry for the central Plains with uncommonly warm temperatures, especially in the southern Plains.

FEEDER CATTLE:

April feeder cattle are trading up $0.27 at $256.20 after an earlier challenge of their highest prices in four months. The rebound from early December continues to push prices higher as calves are in short supply in 2024 and there isn't much evidence of beef cows being held back from slaughter yet, extending last week's loss to their lowest prices since February. The latest CME feeder index price of $242.66 is from Tuesday and is down $4 from a week ago.

LEAN HOGS:

April lean hogs are trading up $2.67 at $88.65, the highest prices seen in over seven months and a dramatic turnaround from the experience producers suffered through in 2023. The good news for producers is that we continue to see signs of firmer demand for cash prices of both negotiated and formula hogs. Thursday morning's USDA quotes showed negotiated cash hogs at $73.30 and the swine formula base at $78.56. Since the end of 2023, negotiated prices have gained from a $21 deficit to formula to a $5.26 deficit Thursday, a much better sign of packer interest for negotiated supply and for hogs overall. We have also seen a consistent gain in prices of early-weaned pigs since June 2023, ending last week above $51.

On Thursday, USDA said last week's actual slaughter totaled 2.634 million head, more than the 2.559 million head originally estimated and still an active pace. Thursday morning's report of pork cutout values was also encouraging for demand, showing the cutout at $93.07, up $2.90 on 113.69 loads and still well above the prices packers are paying for cash hogs. Thurday's higher cutout was supported by a $13.59 gain in bellies. CME's most recent lean hog index was projected at $77.97 for Nov. 20. Technically speaking, April hog prices are clearly trending higher and may eventually challenge the 2023 high of $91.60.

Thursday Morning Livestock Market Update - Pre-Report Positioning Expected Ahead of Friday's Cattle on Feed

GENERAL COMMENTS:

Cattle futures tried to run higher with February and April live cattle bumping the bottom of the chart gap, but that is where traders sold more aggressively. At least contracts were able to maintain the uptrend. Not much upside is expected ahead of Friday's Cattle on Feed report. There is much expectation for significantly lower placements, but that has failed to push futures substantially higher, which may indicate it is already factored in. The estimates for the report are for cattle on feed Feb. 1 100.1% with the trade estimates ranging from 99.4% to 101.1%. Placements are estimated at 88.2% with the estimates ranging from 81.6% to 94.9%. If the estimated placement number is correct, it would be the lowest placement number for January since 2007. January marketings are estimated at 100.0% with a range of 98.6% to 100.3%. A few cash cattle traded in Iowa for $288 Wednesday, but this is not sufficient to indicate prices for the week. Boxed prices were mixed with choice up $0.43 and select down $3.36.

Hog futures drifted in a narrow range Wednesday, posting a mixed close. Traders like the fact that cash hogs continue to advance with the National Daily Direct Afternoon Hog report showing a gain of $2.37, pushing the weighted average to $72.62. However, concern remains over the weakness of cutouts, which posted a decline of $2.27. It seems one is cancelling out the other, leaving traders guessing. The expectation is for packers to be less aggressive Thursday due to their aggressive buying so far this week. Saturday slaughter is estimated at 133,000 head.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report is expected to show low placements, which would continue to support the market.	1)	Slaughter numbers are decreasing, which may leave packers less aggressive in the cash market this week.
2)	February and April futures are knocking the bottom of the chart gaps and may fill those gaps ahead of the close Friday.	2)	Cash cattle trade may be delayed until late Friday as it usually is when there is a Cattle on Feed report. Futures may drift Thursday and Friday.
3)	Hog futures continue to hold the gains of last week with April futures closing at a new high again and the highest price since June 30, 2024.	3)	If pork cutouts remain weak and packers pull back the rest of the week, futures may show a price retracement as market prices find a balance.
4)	Strong cash is being paid for hogs, which may suggest tighter numbers and increased export demand.	4)	Caution may be exercised ahead of the weekly export sales report as USDA will revise last week's numbers.

Wednesday Closing Livestock Market Update - Strong Fundamentals Keep Cattle Trending Higher

GENERAL COMMENTS:

It was another strong day for the cattle complex as the market continued to trade steady or somewhat higher, thanks to its strong fundamental footing, but the hog market wasn't as supported. March corn is down 7 3/4 cents per bushel and May soybean meal is down $5. The Dow Jones Industrial Average is up 48.44 points. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $2.37 with a weighted average price of $72.62 on 5,440 head.

LIVE CATTLE:

The live cattle complex rounded out the day with another higher close, although traders did so in a conservative manner. Without knowing how this week's cash cattle trade would pan out, trades seemed to hold the market steady. Not to mention, it is a week when another Cattle on Feed report will be shared, and even though it's expected to be extremely favorable to the market with sharply lower placements, traders don't want to be caught putting the cart before the horse.

February live cattle closed $0.42 lower at $183.97, April live cattle closed $0.37 higher at $187.70 and June live cattle closed $0.35 higher at $183.30. No cash cattle trade developed throughout the day as packers hope to keep the market steady. They've already dialed back processing speeds to slow up throughput and lessen their need to support the cash market, but feedlots are also current and willing to go toe-to-toe in this market. Asking prices are noted in the South at $184 to $185 and in the North at $292-plus. 

Wednesday's slaughter is estimated at 120,000 head -- 3,000 head less than a week ago and 5,000 head less than a year ago.

Boxed beef prices closed mixed: Choice up $0.43 ($297.80) and select down $3.36 ($284.46) with a movement of 105 loads (54.45 loads of choice, 19.70 loads of select, 12.17 loads of trim and 18.74 loads of ground beef).

THURSDAY'S CATTLE CALL: Steady. Packers have been relatively aggressive the past two weeks in the cash market which lessens their need to be aggressive this week.

FEEDER CATTLE:

Wednesday was another impressive day for the feeder cattle complex as the market continued to climb higher and higher as the fundamental outlook for the marketplace remained incredibly strong and technical support was ample.

March feeders closed $0.02 lower at $251.35, April feeders closed $0.57 higher at $255.92 and May feeders closed $1 higher at $259.12. The feeder cattle market continues to patiently wait for Friday's Cattle on Feed report as a sharp decline in placements should bode extremely well for feeders. The real question to be answered next Monday is whether the understanding that feeders were lightly placed in January is already built into the market or if there's still more upward space to trade. Time will tell.

At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week feeder steers and heifers sold $2 to $3 stronger, but the biggest gains continue to be on steer and heifer calves as they traded $4 to $8 higher. Calves continue to be highly sought at markets across the country as order buyers are concerned that grass calves may be in short supply come May. The CME feeder cattle index Feb. 20: Up $0.01, $242.66.

LEAN HOGS:

It was a mixed day for the lean hog complex as the day's summary was hit-and-miss across the whole market. Yes, the futures complex did close mixed and cash prices did close higher, but pork cutout values closed lower this afternoon and traders are desperate to see higher pork cutout values. With the belly closing $10.11 lower and the rib dropping $4.99, the carcass price stood little chance of closing higher. This week's export report won't be shared until Frida, but hog enthusiasts are hopeful they'll see another strong report this week.

April lean hogs closed $0.30 higher a $85.97, June lean hogs closed $0.20 lower at $97.97 and July lean hogs closed $0.05 lower at $98.97. Pork cutouts totaled 254.61 loads with 198.97 loads of pork cuts and 55.64 loads of trim. Pork cutout values: Down $2.27, $90.17. Wednesday's slaughter is estimated at 490,000 head -- 1,000 head more than a week ago and 88,000 head more than a year ago. The CME lean hog index Feb. 19: Up $1.05, $76.80.

THURSDAY'S HOG CALL: Lower. Given that packers were more aggressive in today's cash market, it's likely they'll pull back and show less interest on Thursday.