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.
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