Friday, February 19, 2021

Friday Midday Livestock Market Summary - Packers Hope to Pay Steady Money While Board Trades Higher

GENERAL COMMENTS:

Right from the day's start the livestock contracts jumped into Friday ambitious and ready to round out the week's trade on a strong note. The warmer weather has helped change the attitude surrounding the marketplace from its distressed state earlier this week to a reassured state. Look to this afternoon, the big matters of business that need tended to before the day's end are Friday afternoon's Cattle on Feed Report and the market still needs to see more cash cattle trade. March corn is down 8 cents per bushel and March soybean meal is down $1.10. The Dow Jones Industrial Average is up 108.47 points and NASDAQ is up 72.58 points.

LIVE CATTLE:

Packers are getting more aggressive as the day plays on and have thus far offered steady bids with last week's trade in the North and South. Light trade developed Thursday afternoon in the Southern Plains live for $114 (steady with last week) and in the Northern Plains for $113 to $114, which was steady as well. Now that packers know they can get cattle bought at steady prices, their willingness to offer up more money is going to be less. Only a light movement of cattle this past week still leaves the market an opportunity to see higher prices as next week's slaughter should be notably more aggressive as packers need to try to make up for the lost tonnage this week. Feedlot aspirations of higher prices are favored by futures positive trade. With a commendable export report and lower corn prices, the contracts trade fully higher all throughout the sector. February live cattle are up $1.02 at $116.15, April live cattle are up $0.65 at $123.57 and June live cattle are up $0.70 at $120.50. Later Friday afternoon the industry will see another Cattle on Feed Report unveiled, with all eyes closely watching the placement and marketing figures; both are expected to be lighter than a year ago.

Beef net sales of 22,900 metric tons (mt) were reported for 2021, primarily for South Korea (9,600 mt, including decreases of 600 mt), Japan (3,500 mt, including decreases of 600 mt) and Canada (3,100 mt, including decreases of 100 mt).

Boxed beef prices are mixed: choice up $0.36 ($239.21) and select down $0.02 ($227.45) with a movement of 61 loads (39.26 loads of choice, 5.83 loads of select, 6.45 loads of trim and 9.70 loads of ground beef).

FEEDER CATTLE:

As the corn market continues to tilt lower, feeder cattle contracts are soaking up every ounce of opportunity to trade higher and aren't thinking twice about doing so. March feeders are up $1.25 at $139.45, April feeders are up $1.10 at $142.85 and May feeders are up $1.10 at $145.72. Even though challenges still persist throughout the countryside, we are thankfully getting to the point in the weather forecast where warmer days are in the near future. The sale barns that have been able to host sales this past week have been met with moderate to considerable demand. As Thursday afternoon's CME Feeder Cattle Index showed a higher close, and as the futures market scaled upward of $1.00 stronger in the nearby contracts, there's moderate support encouraging the market to keep with its strong trade.

LEAN HOGS:

Mostly higher, other than the June contract, lean hog futures aim to roll into Friday afternoon with enough gusto to close the week fully higher. April lean hogs are up $0.07 at $85.00, June lean hogs are down $0.20 at $92.45 and July lean hogs are steady at $92.57. Friday morning's export report was slightly lower than the weeks past and it was interesting to see that China wasn't one of the most aggressive buyers this past week as they came in fourth in line, buying 2,500 mt with decreases of 1,300 mt.

The projected lean hog index for 2/18/2021 is up $0.23 at $77.43 and the actual index for 2/17/2021 is up $0.67 at $77.20. Hog prices are unavailable due to confidentiality on the National Direct Morning Hog Report. Pork cutouts total 150.24 loads with 131.71 loads of pork cuts and 18.52 loads of trim. Pork cutout values: up $2.95, $93.76.

Pork net sales of 33,300 mt reported for 2021 were down 10% from the previous week and 27% from the prior four-week average. Increases were primarily for Japan (9,500 mt, including decreases of 100 mt), Mexico (8,400 mt, including decreases of 600 mt), South Korea (3,000 mt, including decreases of 200 mt) and China (2,500 mt, including decreases of 1,300 mt).




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