GENERAL COMMENTS:
The livestock complex is trading lower as Monday's noon hour approaches and traders want to see how the market's fundamentals shape up this week. New showlists appear to be mixed: Lower in Texas, but higher in Kansas and Nebraska. March corn is down 1 1/4 cents per bushel and March soybean meal is up $3.80. The Dow Jones Industrial Average is down 285.74 points.
LIVE CATTLE:
Even though last week was a busy one for the live cattle/cash cattle market, the complex is trading lower this morning as traders want to see how the market's fundamentals shape up this week before they push contracts any higher.
February live cattle are down $0.10 at $180.45, April live cattle are down $0.77 at $182.95 and June live cattle are down $1.02 at $180.77. It was interesting to note that 90% of last week's negotiated cash cattle trade was committed to nearby delivery. This likely means packers are relatively short bought which is why they were willing to pay $3 to $5 more for the cattle.
Last week's negotiated cash cattle trade totaled 69,008 head. Of that, 90% (62,183 head) were committed to nearby delivery and the remaining 10% (6,825 head) were committed to deferred delivery.
Last week, northern cattle sold for $280, $3 higher than the previous week's weighted average. Trade in Texas was mostly marked at $178, which is $3 higher and Kansas cattle sold for $178 to $179, $4 to $5 higher than the previous week's weighted average.
Boxed beef prices are higher: Choice steady ($293.08) and select up $0.34 ($283.81) with a movement of 52 loads (31.05 loads of choice, 5.71 loads of select, zero loads of trim and 15.41 loads of ground beef).
FEEDER CATTLE:
Traders are letting the feeder cattle contracts drift lower as they want to see how sales fare early this week in the countryside and to see better support from the live cattle/cash cattle markets before they advance the market. Given that the spot March contract is trading at its highest price point seen in four months, the market is sitting in a strong position. It will likely continue to keep this steady/upward trend as feeder cattle supplies will be thin through 2024. However, even strong bullish markets have down days, down weeks and sometimes even lower months as traders try to balance the market's fundamental reality with the pressures of the futures complex. March feeders are down $1.85 at $242.95, April feeders are down $1.75 at $248.30 and May feeders are down $1.77 at $253.52.
LEAN HOGS:
The lean hog complex continues to trade lower as the market waits to see what develops for fundamental support. On Thursday, the market will see another USDA WASDE report that could share more insight into 2024 export expectations. It will be interesting to see if 2024 exports increase from a month ago as China is believed to need more pork. February lean hogs are down $0.55 at $74.90, April lean hogs are down $0.75 at $82.97 and June lean hogs are down $1.22 at $96.27.
The projected lean hog index for Feb. 2, 2024, is up $0.44 at $73.56, and the actual index for Feb. 1, 2024, is up $0.41 at $73.12. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.48 with a weighted average price of $62.01, ranging from $57 to $64.50 on 898 head and a five-day rolling average of $62.17.
Pork cutouts total 141.99 loads with 102.11 loads of pork cuts and 39.88 loads of trim. Pork cutout values: Down $0.68, $87.72.
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