GENERAL COMMENTS:
It was another mixed day for the livestock complex as the cattle contracts rounded out the week lower while the hog complex closed mostly higher. Cash cattle trade did finally develop in the South at $185 which is $2.00 higher than last week's weighted average. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.99 with a weighted average price of $76.18 on 1,881 head. May corn is up 1 3/4 cents per bushel and May soybean meal is up $7.00. The Dow Jones Industrial Average is down 68.66 points.
From Friday to Friday livestock futures scored the following changes: April live cattle down $0.85, June live cattle down $0.57; March feeder cattle down $3.77, April feeder cattle down $3.90; April lean hogs closed $3.70, June lean hogs down $0.22; March corn up $0.14, May corn up $0.15.
LIVE CATTLE:
The live cattle market seemed unable to really light its own fire this past week in the futures complex as the market merely chopped sideways. The market had ample fundamental support backing it with strong boxed beef prices and with cash cattle prices trading $2.00 to $4.00 higher this past week. But even so, traders are reluctant to pressure the market's resistance threshold at this point in time. April live cattle closed $1.12 lower at $187.60, June live cattle closed $1.17 lower at $183.42 and August live cattle closed $1.25 lower at $182.25. Finally, some cash cattle trade developed in the South at $185 which is $2.00 higher than last week's weighted average. This week Northern sales were marked at mostly $294 which is $4.00 higher than last week's weighted average. Friday's slaughter is estimated at 97,000 head -- 3,000 head less than a week ago and 16,000 head less than a year ago. Saturday's slaughter is projected to be around 2,000 head. The week's total slaughter is estimated at 581,000 head -- 14,000 head less than a week ago and 34,000 head less than a year ago.
Friday's WASDE report was supportive of both the cattle and beef markets. Production for 2024 was increased by 140 million pounds as even though production in the first quarter was slim, the other three quarters in 2024 are expected to be more aggressive in slaughtering cattle. That bodes well for steer prices, and all four quarters of 2024 saw price increases from last month's WASDE report. For 2024, the first quarter is now expected to average $179 which is $3.00 more than last month's projection, the second quarter is now forecasted to average $183 which is $3.00 higher than last month's projection, the third quarter is expected to average $182 which is $2.00 more than last month's projection, and steer prices in the fourth quarter of 2024 are expected to average $186 which is $2.00 more than February's prediction. 2024 beef imports were increased by 50 million pounds from February's WASDE report, and 2024 beef exports remained unchanged from a month ago.
Boxed beef prices closed higher: choice up $0.43 ($307.04) and select up $1.17 ($297.43) with a movement of 80 loads (65.08 loads of choice, 10.48 loads of select, zero loads of trim and 4.77 loads of ground beef).
MONDAY'S CATTLE CALL: Steady. Given that chain speeds are still reduced, cash trade could be pressured next week.
FEEDER CATTLE:
The feeder cattle complex closely followed the live cattle market throughout the week and seemed to undervalue the strong demand that calves and feeders were bringing in the countryside. Friday's close was disappointing as all of the feeder cattle contracts closed lower -- but it was somewhat expected given that the live cattle market closed lower too. March feeders closed $1.82 lower at $249.20, April feeders closed $2.20 lower at $254.10 and May feeders closed $1.70 lower at $256.75. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week and throughout the entire state feeder steers traded $3.00 to $6.00 higher and feeder heifers sold steady to $3.00 higher. Stocker steers sold $6.00 to $10.00 higher. Steer calves sold $3.00 to $5.00 lower and heifer calves traded $3.00 to $5.00 higher. Slaughter cows sold $3.00 to $4.00 higher and slaughter bulls sold $4.00 to $5.00 higher. Feeder cattle supply over 600 pounds was 67%. The CME feeder cattle index 3/7/2024: not available at this time.
LEAN HOGS:
The lean hog market was able to round out the week on a mostly higher note although the spot April contract closed slightly lower. The market's late-week support stemmed from the strong WASDE report and from the fact that pork cutout values closed higher too. April lean hogs closed $0.15 lower at $84.37, June lean hogs closed $0.67 higher at $101.82 and July lean hogs closed $0.70 higher at $103.70. Pork cutout values were able to close higher as substantial gains were seen in the belly (up $5.48), the rib (up $4.28) and the picnic (up $2.18). Pork cutouts totaled 306.59 loads with 288.83 loads of pork cuts and 17.76 loads of trim. Pork cutout values: up $0.96, $92.11. Friday's slaughter is estimated at 442,000 head -- 42,000 head less than a week ago and 41,000 head less than a year ago. Saturday's slaughter is projected to be around 105,000 head. The CME lean hog index 3/6/2024: up $0.17, $81.48.
Friday's WASDE report was especially supportive to the hog and pork markets. 2024 production was increased by 30 million pounds as chain speeds have been running more aggressively than originally assumed. Hog prices saw some changes from last month's report as faster chain speeds are pushing packers to need more hogs. The first quarter of 2024 didn't see any change in its price forecast as hogs are expected to average $55, but the second quarter is now expected to average $65 which is $3.00 more than February's projection, the third quarter is now expected to average $67 which is $1.00 more than last month's forecast, and hog prices in the fourth quarter of 2024 remained unchanged at $56.00. Pork imports for 2024 fell by 10 million pounds, but exports grew by 50 million pounds.
MONDAY'S HOG CALL: Steady. Packers seem short bought in the cash market but it's still unlikely that they buy aggressively on Monday.
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