Optimism and support are creeping into the livestock contracts heading into Thursday's afternoon trade, which couldn't come at a better time for the cash cattle market. With the market's cash cattle trade largely undeveloped still, the support from the futures complex could help feedlots get the extra $1.00 to $2.00 higher that they were hoping for this week. March corn is down 2 cents per bushel and March soybean meal is down $6.90. The Dow Jones Industrial Average is up 211.10 points and NASDAQ is up 275.17 points.
The live cattle contracts are hopping on the band wagon and not missing out on the opportunity to trade mildly higher into Thursday's afternoon trade. February live cattle are down $0.17 at $114.82, April live cattle are steady at $119.27 and June live cattle are up $0.17 at $115.12. Even though the market's support is only a sparking a modest rally, it comes at a critical time for the cash cattle market. With this week's cash cattle trade largely undeveloped and feedlots willing to wait until the week's end for the prices they desire, the market's small support comes as a hopeful sign of encouragement and helps feedlots stick to their plan. So far there's only one bid on the table at $175 in Nebraska and Northern feedlots are firm in their asking prices of $180-plus and Southern feedlots are asking $114 to $115. The fact remains that packers need cattle and in order for them to keep their brisk slaughter speeds, they will need to buy more cattle. Trade could develop sometime Thursday afternoon or wait until Friday to develop.
Beef net sales reductions of 1,200 mt for 2020 resulting in increases for South Korea (100 mt), were more than offset by reductions primarily for Japan (1,100 mt). Outstanding sales on December 31 totaled 98,000 MT and were carried over to 2021. Exports of 12,100 mt were primarily to Japan (3,700 mt), South Korea (3,200 mt), Mexico (1,400 mt), China (1,200 mt), and Taiwan (800 mt). Accumulated exports for 2020 totaled 851,800 mt, up 3 percent from the 823,500 mt exported in 2019.
Boxed beef prices are mixed: choice up $0.27 ($205.54) and select down $0.74 ($195.34) with a movement of 95 loads (53.50 loads of choice, 9.83 loads of select, 9.77 loads of trim and 21.57 loads of ground beef).
The corn market's slight regression is allowing feeder cattle contracts to trade $1.00 higher after a mostly depressing week for the contracts. January feeders are up $1.00 at $136.67, March feeders are up $0.97 at $137.55 and April feeders are up $1.07 at $139.70. Thankfully as trade continues to progress into the year and we start to get a grasp on where the market could potentially head versus being bombarded with jittery trade following the holidays, the feeder cattle contracts could stand to trade higher especially if the corn market doesn't run higher and if live cattle can secure steady gains.
The lean hog market is trading mildly higher throughout most of the complex as fundamental support is strongly encouraging the contracts to trade higher Thursday morning. February lean hogs are down $0.20 at $69.57, April lean hogs are up $0.35 at $73.35 and June lean hogs are up $0.72 at $84.35. With the help of a robust cash market and a strong midday cutout prices, the contracts are wanting to trade higher despite contracts coming up against some strong resistance levels.
Pork net sales reductions of 8,600 mt for 2020, resulting in increases for Mexico (3,500 mt) and South Korea (500 mt), were more than offset by reductions primarily for China (11,300 mt) and Japan (700 mt). Outstanding sales on December 31 totaled 158,000 mt and were carried over to 2021. Exports of 26,700 mt were primarily to China (9,400 mt), Mexico (7,000 mt), Japan (3,500 mt), South Korea (1,700 mt), and Australia (1,100 mt). Accumulated exports for 2020 totaled 1,938,000 mt, up 16 percent from the 1,624,000 mt exported in 2019.
The projected lean hog index for 1/6/2020 is up $0.54 at $62.96, and the actual index for 1/5/2020 is up $0.95 at $62.42. Hog prices are sharply higher on the National Direct Morning Hog Report, up $3.57 with a weighted average of $56.42, ranging from $51.00 to $57.40 on 4,190 head and a five-day rolling average of $54.65. Pork cutouts total 200.43 loads with 176.21 loads of pork cuts and 24.22 loads of trim. Pork cutout values: up $2.78, $80.43.