While the cattle contracts have been on a violent ride the first couple days of 2021, the lean hog sector has been level-headed and steady with its momentum, continuing to trade higher. Hog prices were lower on the National Direct Afternoon Hog Report, down $0.41 with a weighted average of $54.69 on 9,380 head. March corn is up 8 cents per bushel and March soybean meal is up $8.10. The Dow Jones Industrial Average is up 167.71 points and NASDAQ is up 120.51 points.
Live cattle contracts fell down Monday to simply bounce back Tuesday. As the market opened Tuesday, support was ripe for the taking and traders willingly jumped back into the marketplace, which let the live cattle contracts regain most of what was lost throughout Monday's trade. With so many feedlots having stakes in the corn market, the industry doesn't mind seeing high corn prices - some even welcome high corn prices. But if corn is going to trade at stout levels, the price of fat cattle needs to follow. We've yet to see if the market's going to be able to pull off stronger cash cattle trade this week or not, but based on how Tuesday's contracts traded and given the fact that very few, hardly any, cattle have traded thus far this week, I'd say it is safe to bet feedlots are gunning for higher prices again this week, and rightfully so. Bids were illusive all throughout Tuesday's trade, though asking prices in the South have been noted at $114. Tuesday's slaughter is estimated at 118,000 head -- 2,000 head more than week ago and 5,000 head less than a year ago. Monday's slaughter was revised to 112,000 head.
Boxed beef prices closed lower: choice down $3.97 ($205.90) and select down $0.04 ($196.49) with a movement of 204 loads (135.48 loads of choice, 24.53 loads of select, 13.26 loads of trim and 31.21 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Higher. It wouldn't be surprising to see Wednesday begin to test the cash cattle market given that Wednesday morning the online sale will take place and the market will see how strong feedlots are and how anxious packers are about getting cattle bought. $1.00 to $2.00 higher is easily attainable this week.
With just a little support, the marketplace can be a whole new reality. Even while corn prices scaled higher all throughout Tuesday's trade, feeder cattle contracts jumped at the opportunity to trade higher and successfully regained some of what Monday lost. January feeders closed $1.72 higher at $136.67, March feeders closed $1.40 higher at $137.42 and April feeders closed $1.32 higher at $139.37. Thankfully the market's support seeped into the countryside and encouraged stronger trade throughout sales barns. At Russell Livestock Feeder Cattle Auction in Russell, Iowa, steers under 700 pounds were mostly $2.50 to $5.00 higher compared to two weeks ago at the last sale. Heifers weighing 400 to 500 pounds traded $3.00 to $5.00 lower while the 500- to 600-pound heifers sold $3.00 to $7.00 stronger. Demand was strong for weight groups that were heavier and it most certainly helped that Tuesday's futures market traded higher as oppose to dogging lower like it did Monday afternoon. The CME Feeder Cattle Index 1/4/2020: not available at this time.
Even though the spot February lean hog contract felt some pressure throughout Tuesday's trade, overall the marketplace was fully supported and was led to close fully higher Tuesday afternoon. February lean hogs closed $0.30 lower at $70.92, April lean hogs closed $0.47 higher at $74.10 and June lean hogs closed $0.32 stronger at $84.20. It was a little disappointing to see pork cutout values close weaker, but thankfully it wasn't to a sharp degree and didn't add enough pressure to sway the technical support that's helped keep the board trading higher. Pork cutouts total 458.33 loads with 415.05 loads of pork cuts and 43.28 loads of trim. Pork cutout values: down $0.14, $77.63. Tuesday's slaughter is estimated at 489,000 head -- 38,000 head more than a week ago and 8,000 head less than a year ago. The CME lean hog index 12/31/2020: up $0.55, $60.62.
WEDNESDAY'S CASH HOG CALL: Steady. Prices were down slightly Tuesday afternoon, but packers continue to process hogs at a vigorous rate and will need to keep hogs lined up to meet scheduling needs. If the market's pork cutout values could constantly trade higher, the cash market would really see some support.