The pressures continue to weigh on the cattle contracts while the lean hog market was met with considerable support through Monday's trade. Tuesday will be a big day for the feeder cattle contracts as more insight into the long-term trend of corn is hoped to be obtained through the USDA reports released Tuesday. Hog prices were higher on the National Direct Afternoon Hog Report, up $0.58 with a weighted average of $55.52 on 3,040 head. March corn is down 4 cents per bushel and March soybean meal is up $7.20. The Dow Jones Industrial Average is down 89.28 points and NASDAQ is down 165.55 points.
Monday's live cattle contracts didn't fare all too well and closed mostly lower. February live cattle closed $1.07 lower at $113.40, April live cattle closed $0.95 lower at $118.35 and June live cattle closed $0.32 lower at $114.95. The pressure that the future market's seen and the pressure that the cash cattle market is up against this week is going to be burdensome. As packers face a seasonally weaker boxed beef market, their ambition to support the cash cattle market will grow even more grim. Monday's cash cattle trade was anticipated with the countryside being at an utter standstill seeing that both bids and asking prices remain elusive. Feedlots would like to see the cash market higher but know that this week is going to be lucky to even obtain steady prices. Monday's slaughter is estimated at 119,000 head, 7,000 head more than a week ago and 3,000 head less than a year ago.
Last week's negotiated trade totaled 80,439 head. Of that, 53,524 head are committed for delivery in the next upcoming two weeks while the remaining 26,915 head are for delivery in the following 15 to 30 days.
Boxed beef prices closed mixed: choice up $0.89 ($207.69) and select down $0.95 ($195.74) with a movement of 123 loads (75.74 loads of choice, 22.07 loads of select, 5.83 loads of trim and 19.61 loads of ground beef).
TUESDAY'S CASH CATTLE CALL: Steady. Depending on how willing feedlots are to work this week's market, steady prices may be able to be obtained but it won't be easy.
Nearby corn prices closed $0.03 to $0.04 weaker ahead of Tuesday's USDA report of next round supply and demand estimates, which will affect the commodities trade in the weeks to come. The feeder cattle contracts are going to be watching the report closely as high corn prices affect feeding costs immensely. January feeders closed $0.17 higher at $136.00, March feeders closed $0.07 stronger at $136.90 and April feeders closed $0.05 lower at $139.02. The market will be on edge until Tuesday's report is shared and a clear direction is obtained for the corn market. Last Friday at St. Onge, South Dakota, compared to their last sale in December, feeder heifers were sharply higher selling $2.00 to $7.00 stronger. Feeder steers weighing in the high 400 weights and the high 600 weights were $2.00 to $5.00 higher, while the lower 400 and 500 weight calves sold $5.00 to $10.00 lower. Steers weighing in the low 600 weight and all the calves weighing in the 700-weight bracket sold steady. The buyer presence was light but those that were there were willing to pay for the calves they wanted. The CME feeder cattle index for Jan. 8: up $0.53, $136.16.
Monday ended up being a pretty strong day for the lean hog market as cash prices closed higher, pork cutout values closed higher and for the most part the futures complex closed with modest gains as well. February lean hogs closed $0.22 lower at $68.47, April lean hogs closed $0.12 higher at $72.95 and June lean hogs closed $0.25 higher at $84.00. Last week the lean hog contracts traded lower away from resistance levels as the market's support was shaky. If the market can continue to support a strong cash market and most importantly continue to see strong closed in the pork cutout sector, the market may try to break resistance levels, though they will be difficult to surpass. Pork cutouts totaled 377.17 loads with 335.72 loads of pork cuts and 41.45 loads of trim. Pork cutout values: up $2.38, $83.38. Monday's slaughter is estimated at 498,000 head, 8,000 head more than a week ago and 2,000 head more than a year ago. The CME lean hog index for Jan. 7: up $0.38, $63.34.
TUESDAY'S CASH HOG CALL: Higher. With slaughter speeds as aggressive as they are and if packers continue to see support in the cutout value, packers may decide that they want to purchase more hogs in order to meet demand.