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.
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