Monday, March 18, 2024

Monday Closing Livestock Market Update - Traders Start Week Off Strong

GENERAL COMMENTS:

It was an impressive start to the week as most of the livestock contracts closed higher, and once again boxed beef prices closed higher, too. No cash cattle trade developed throughout the day and trade will likely be delayed until Thursday, if not even potentially Friday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.28 with a weighted average price of $79.66 on 3,425 head. May corn is down 3/4 cent per bushel and May soybean meal is down $2.80. The Dow Jones Industrial Average is up 75.66 points.

LIVE CATTLE:

The live cattle complex charged into the new week nd hit the ground running. With boxed beef prices continuing to see support, feedlots are hoping they'll get cash cattle traded higher again this week. The market is eager to take out the highs established in 2023 but hasn't quite been able to do so yet in the cash complex. The cash cattle market won't likely trade until late this week, but feedlots will price cattle higher again this week. April live cattle closed $1.32 higher at $188.57, June live cattle closed $1.80 higher at $185.40 and August live cattle closed $1.72 higher at $184.35. New showlists appear to be mixed, higher in Texas, but lower in Kansas, and Nebraska/Colorado. 

Monday's slaughter is estimated at 120,000 head -- 9,000 head more than a week ago and 4,000 head less than a year ago.

Last week, northern dressed cattle traded for $294 to $301, but mostly at $298, $4 higher than the previous week's weighted average. Southern live cattle traded from $181 to mostly $186, which is steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 82,876 head. Of that, 80% (66,655 head) were committed to the nearby delivery and the remaining 20% (16,221 head) were committed to the deferred delivery.

Boxed beef prices closed higher: choice up $1.43 ($313.33) and select up $0.65 ($303.05) with a movement of 114 loads (49.92 loads of choice, 18.95 loads of select, 8.62 loads of trim and 36.14 loads of ground beef).

TUESDAY'S CATTLE CALL: Higher. With consumers feeling spring creeping into the air, beef demand has continued to impress the market and may be strong enough to keep packers engaged in the cash sector despite that meaning that cash prices may trend higher, too.

FEEDER CATTLE:

The feeder cattle complex closed substantially higher as the market capitalized on support from the live cattle complex. With the live cattle contracts closing higher again this afternoon and cash cattle expected to be priced even higher again this week, it was an easy decision for the feeder cattle market to trade higher while fundamental demand continues to encourage the market to do so.

April feeders closed $2.97 higher at $255.10, May feeders closed $3.12 higher at $259.12 and August feeders closed $2.35 higher at $269.72. At Joplin Regional Stockyards in Carthage, Missouri, compared to last week and at its midsession point, feeder steers are trading steady to $8 higher while feeder heifers trade anywhere from $4 lower to $5 higher. Feeder cattle supply over 600 pounds was 54%. The CME feeder cattle index March 15: Up $1.86, $250.86.

LEAN HOGS:

The lean hog complex closed higher in the futures market, but the market's fundamentals weren't overly supportive as cash prices and pork cutout values both closed lower. If the futures complex continues to trend higher, the resistance at $88 will become a hurdle that challenges traders. Unless consumer demand keeps pork cutout values higher throughout the week and Thursday's export report is strong again, I'm not certain the market will be able to take out that long-term resistance.

April lean hogs closed $0.10 lower at $86.82, June lean hogs closed $0.55 higher at $103.02 and July lean hogs closed $0.80 higher at $105.30. Pork cutouts total 256.87 loads with 232.60 loads of pork cuts and 24.27 loads of trim. Pork cutout values: down $0.31, $93.16. Monday's slaughter is estimated at 486,000 head -- 31,000 head more than a week ago and 26,000 more than a year ago. The CME lean hog index March 14: Up $0.15, $82.34.

TUESDAY'S HOG CALL: Lower. With pork cutout values lower Monday afternoon, I don't expect packers to be overly aggressive in Tuesday's cash market.




Monday Midday Livestock Market Summary - Trader Interest Sends Contracts Higher

GENERAL COMMENTS:

The livestock complex is off to a strong start as all three of the markets trade higher into Monday's noon hour. New showlists appear to be mixed, higher in Texas, but lower in Kansas, and Nebraska/Colorado. May corn is up 1 cent per bushel and May soybean meal is down $0.20. The Dow Jones Industrial Average is up 142.71 points.

LIVE CATTLE:

The live cattle complex is trading higher as the week gets off to a positive start. It's once again supportive to see boxed beef prices higher, but packers aren't anticipated to increase processing speeds any time soon to slowly back up supplies so they don't have to continue paying more money in the cash market.

April live cattle are up $0.70 at $187.95, June live cattle are up $1 at $184.57 and August live cattle are up $0.97 at $183.60. The cash cattle market won't likely trade until late in the week, and steady prices could be the market's theme as packers have been able to steadily commit more and more cattle to the deferred delivery option. Not to mention, Friday's Cattle on Feed report is expected to showcase higher placements which packers will try to use as a bearish factor for the immediate market. New showlists appear to be mixed, higher in Texas, but lower in Kansas, and Nebraska/Colorado.

Last week, northern dressed cattle traded for $294 to $301, but mostly at $298, $4 higher than the previous week's weighted average. Southern live cattle traded from $181 to mostly $186, which is steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 82,876 head. Of that, 80% (66,655 head) were committed to the nearby delivery and the remaining 20% (16,221 head) were committed to the deferred delivery.

Boxed beef prices are higher: Choice up $1.43 ($313.33) and select up $1.40 ($303.80) with a movement of 43 loads (20.09 loads of choice, 9.85 loads of select, 4.56 loads of trim and 8.85 loads of ground beef).

FEEDER CATTLE:

The feeder cattle market is trading substantially higher as Monday's market nears the noon hour. With the market being far enough away from immediate resistance, traders have only seen a green light through Monday's trade as the live cattle complex is lending support. Don't be surprised if the market faces some pushback later this week, however, as another Cattle on Feed report will be released and higher placements are fully expected. April feeders are up $2.60 at $254.72, May feeders are up $2.60 at $258.60 and August feeders are up $1.85 at $269.22.

LEAN HOGS:

The lean hog market is following in the cattle complex's shadow as it trades mostly higher. Midday pork cutout values are up considerably which helps propel the market higher, but afternoon values are more crucial. Last Thursday's export report was lukewarm, so hog enthusiasts will be carefully watching for this week's export data and hoping that demand is more aggressive. April lean hogs are down $0.42 at $86.50, June lean hogs are up $0.02 at $102.50 and July lean hogs are up $0.40 at $104.90.

The projected lean hog index for March 15 is up $0.20 at $82.54, and the actual lean hog index for March 14 is up $0.15 at $82.34. Hog prices are lower in the Daily Direct Morning Hog Report, down $1.82 with a weighted average price of $78.92, ranging from $76 to $80 on 730 head and a five-day rolling average of $79.61. Pork cutouts total 122.96 loads with 109.21 loads of pork cuts and 13.75 loads of trim. Pork cutout values: Up $1.76, $95.23.




Monday Morning Livestock Market Update - Two-Sided Trading Activity Expected

GENERAL COMMENTS:

Cattle traded higher for the week with Southern cattle up $1.00 and Northern dressed cattle gaining $4.00. This was impressive after higher cash the previous week. The packers have been trying to hold the line by slowing slaughter, but they have not been able to back up cattle in the country. Consumer demand continues to remain strong with boxed beef up again Friday: choice gaining $1.12 and select gaining $0.71. It will be an interesting week with feedlots likely holding for higher prices, but another week of higher cash may be difficult to obtain. Feeder cattle futures are in a downtrend and will need to find support to stabilize or reverse the trend. Feeders are still trading higher at auctions, which should help futures find support. The Commitments of Traders report showed funds increasing their long futures positions in live cattle by 3,299 contracts to a net long of 67,347 contracts. Funds sold 1,144 contracts in feeder cattle reducing their net-long positions to 9,335 futures contracts.

Hog futures had a strong Friday with July and August contracts making new contract highs. The nearby April contract closed at the highest price since March 1. June is knocking on the door of price resistance from two weeks ago. Cash and cutouts provided support to the market Friday. The National Direct Afternoon Hog report showed a gain of $0.24 with a weighted average of $79.94 closing out a nice week of cash strength. Cutouts gained $0.22, indicating growing consumer demand with the cutout value reaching $93.47. This seems to provide further evidence that hog numbers may be tightening. The Commitment of Traders report showed funds selling 2,354 hog contracts, reducing their net-long position to 63,048 futures contracts.

BULL SIDE BEAR SIDE
1)

Higher cash cattle last week should continue to provide overall support to the market.

1)

The trading activity during the second half of last week pushed live cattle futures back into the sideways trading range.

2)

Boxed beef has been increasing steadily, indicating demand remains strong even with the higher prices. Prices have not reached consumer resistance.

2)

Traders will be cautious over the ability of cash to gain again this week after two consecutive weeks of strength.

3)

Cash hogs were consistently higher last week as the packers remained aggressive. There does not seem to be an overabundance of market-ready hogs at present.

3)

Weekly hog weights gained 0.3 pounds to an average of 287.6 pounds. This remained 0.5 pounds above a year ago.

4)

The June contract reached back to its previous high and chart resistance Friday. A break above that level could bring in more buying interest.

4)

Packers may wait to see the weekend pork movement before becoming too aggressive with purchases. Cash may be weaker to begin the week.




Friday, March 15, 2024

Friday Closing Livestock Market Update - Contracts Charge Higher

GENERAL COMMENTS:

The livestock complex charged through Friday's end as the market capitalized on the strength it had before heading into the weekend. Southern live cattle traded at $186 which is $1.00 higher than last week's weighted average, and Northern dressed cattle traded for $298 which is $4.00 higher than last week's weighted average. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $0.24 with a weighted average price of $79.94 on 3,035 head. May corn is up 3 cents per bushel and May soybean meal is down $2.70. The Dow Jones Industrial Average is down 190.10 points.

From Friday to Friday livestock futures scored the following changes: April live cattle down $0.35, June live cattle up $0.17; March feeder cattle up $0.08, April feeder cattle down $1.97; April lean hogs up $2.55, June lean hogs up $0.65; May corn down $0.03, July corn own $0.03.

LIVE CATTLE:

With the cash cattle market trading higher and the market now eased away from current resistance thanks to Thursday's plunge, the live cattle complex didn't struggle at all to close higher by Friday's end. April live cattle closed $0.30 higher at $187.25, June live cattle closed $0.22 higher at $183.60 and August live cattle closed $0.52 higher at $182.62. The cash cattle market saw trade develop early Friday morning in the South at $186 which is $1.00 higher than last week's weighted average. And some more trade developed in the North at $298, which is $4.00 higher than last week's weighted average. It's impressive that feedlots were able to move the cash market higher again this past week, but at some point, these higher carcass weights and reduced processing speeds are going to catch up to feedlot's showlists if feedlot managers aren't careful.

Friday's slaughter is estimated at 113,000 head -- 16,000 head more than a week ago and steady with a year ago. Saturday's slaughter is projected to be around 15,000 head. The week's total estimated slaughter amounts to 601,000 head -- 18,000 head more than a week ago but 27,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.12 ($311.90) and select up $0.71 ($302.40) with a movement of 88 loads (69.55 loads of choice, 10.54 loads of select, zero loads of trim and 7.95 loads of ground beef).

MONDAY'S CATTLE CALL: Steady. It's a coin toss on trying to determine whether or not cash prices will advance next week or hold steady. On one hand with boxed beef prices continuing to trade higher, packers may need more cattle to supply the demand. On the other hand, cash prices could trade lower as carcass weights are increasing, and packers have dramatically cut throughput.

FEEDER CATTLE:

Following Thursday's sharp decline, the feeder cattle complex was able to regain some of what the market had lost ahead of the week's end. Thankfully with both the live cattle and cash cattle markets trading higher, and the continued support of buyers in the countryside -- the feeder cattle market saw steady gains through Friday's end. March feeders closed $1.80 higher at $249.27, April feeders closed $0.95 higher at $252.12 and May feeders closed $1.17 higher at $256.00. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week and throughout the entire state, feeder steers sold steady, but feeder heifers traded steady to $5.00 higher with instances of $10.00 higher on six weights. Steer calves sold $5.00 to $10.00 higher and heifer calves traded $2.00 to $8.00 higher, but four weights held mostly steady. Slaughter cows traded $1.00 to $5.00 higher and slaughter bulls sold $2.00 to $3.00 higher. Feeder cattle supply over 600 pounds was 64%. The CME feeder cattle index 3/14/2024: $0.54, $249.00.

LEAN HOGS:

The lean hog complex was able to round the week out on a stronger foot as the market saw trader interest pour into the complex ahead of Friday's close. April lean hogs closed $1.90 higher at $86.92, June lean hogs closed $1.05 higher at $102.47 and July lean hogs closed $1.00 higher at $104.50. With the spot April contract closing at $86.92, the market is once again closing in on resistance, which traders will be pressured next week to either take out resistance or continue to trade sideways. Pork cutouts totaled 303.72 loads with 280.29 loads of pork cuts and 23.43 loads of trim. Pork cutout values: up $0.22, $93.47. It was interesting to note the carcass price's biggest support stemmed from the butt which gained $4.11, and the loin also gained $1.92. Friday's slaughter is estimated at 444,000 head -- 2,000 head more than a week ago and 21,000 head less than a year ago. Saturday's slaughter is projected to be around 129,000 head. The CME lean hog index 3/13/2024: up $0.17, $82.19.

MONDAY'S HOG CALL: Steady. Packers seem in short supply of hogs, so cash prices could be higher or potentially even steady early next week.