GENERAL COMMENTS:
The market is feeling plenty of post-holiday jolts as cattle contracts bleed lower, cash cattle hold out, the lean hog market tries to move higher and some traders are back in the game, but some are taking the long weekend while they can. Cattle contracts were able to help mitigate some of the day's pain and closed higher than what earlier prices dipped to. Lean hog contracts all closed higher, but in a modest fashion as prices backed down from the morning's strong rally. Cash hog prices are lower on the National Direct Afternoon Hog Report, down $0.12 with a weighted average of $50.40. March corn is up 3 3/4 cents per bushel and March soybean meal is up $0.90. The Dow Jones Industrial Average is up 293.68 points and NASDAQ is up 109.76 points.
LIVE CATTLE:
Cattle feeders closed the day with a murmured sigh as they may have been hopeful for inspiring prices to lead off 2020 but are still thankful that the day didn't end as low as it could have. Although the holidays are mostly behind us now, it's still important to remember that the market is in a fickle holiday trading week. Once the market has had some time to iron out normal business in a standard trading week, and once market traders are back to work, the market will most likely level out and march to the beat of a usual first-quarter drum. Live cattle contracts closed lower throughout the entire sector; February was down $0.15 at $125.77, April live cattle were down $0.70 at $126.47 and June live cattle were down $0.20 at $118.70. Cash cattle action remains ghostly quiet as only one regional has bid in Nebraska and the rest of the country sits idle until Friday. Bids in Nebraska are at $198, and asking prices are still at $125 in the South and $200 to $202 in the North.
Boxed beef prices are mixed: choice down $1.17 ($208.25) and select is up $0.51 ($202.63) with a total movement of 118 loads (76.52 loads of choice, 11.33 loads of select, 14.39 loads of trim and 15.26 loads of ground beef). Wednesday's slaughter is estimated at 0 head, and Thursday's slaughter is estimated at 122,000 head.
FRIDAY'S CASH CATTLE CALL: $1.00 to $2.00 higher than last week's weighted average. The pressure sits on Friday to make all the fat cattle trade of the week happen. Thursday's lousy performance on the board doesn't leave feeders with warm, fuzzy feelings, but everyone knows that first-quarter supplies of fat cattle are the tightest, and cattle are usually tightest in the North. With that being said, it's not irrational to think that the prices will land somewhere between last week's weighted average and current asking prices.
FEEDER CATTLE:
Feeder cattle contracts led the surge lower and closed the livestock complex with the greatest losses for the day. January feeders closed $0.67 lower at $144.65, March feeders closed $0.50 lower at $143.72 and April feeders closed $0.25 lower at $146.50. The CME feeder cattle index for 12/31/19: $142.48, up $0.67.
LEAN HOGS:
A job well done to the lean hog contracts. Hog contracts traded on both sides of steady Thursday but closed the day $0.07 to $0.35 higher, when cattle contracts lost significant position. February lean hogs are up $0.12 at $71.55, April lean hogs are up $0.07 at $78.00 and May lean hogs are up $0.32 at $84.37. Pork cutouts totaled 283.61 loads with 250.55 loads of pork cuts and 33.06 loads of trim. Pork cutout values: up $0.83 at $73.85. Tuesday's hog slaughter has been revised to 406,000 head, Wednesday's slaughter is estimated at 0 head, and Thursday's slaughter is expected to be 494,000 head. The CME lean hog index 12/30/19: down $0.24, at $57.93.
FRIDAY'S CASH HOG CALL: Steady. As a lot of pressure sits on the cash cattle side of things, it's unlikely that a lot of attention will be paid to the hog market who has already had some wins earlier in the week on both the board and in the cash market.
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