GENERAL COMMENTS:
Monday's slight regression in the corn markets has lent a hand to the feeder cattle contracts, allowing them to trade mildly higher. The live cattle and lean hog contracts are keeping with their upward progression as traders are ready to start the new week optimistically. March corn is down 4 3/4 cents per bushel and March soybean meal is down $4.00. The Dow Jones Industrial Average is up 247.59 points and NASDAQ is up 310.07 points.
LIVE CATTLE:
Looking forward to the week ahead, the live cattle complex is fueled with positive energy following last week's trade. February live cattle are up $0.22 at $115.27, April live cattle are up $0.12 at $121.97 and June live cattle are up $0.55 at $118.15. Friday's regression set the contracts back, but it also grants Monday's trade a little more ease in moving higher. Fundamentally, the live cattle market is prime with boxed beef prices continuing to scale higher and the cash cattle market finally able to push prices to higher levels. Last week's live cattle in the Southern Plains traded $3.00 higher at mostly $113 and Northern dressed cattle sold on average $5.00 higher at $178. Showlists this week are mixed with slightly higher numbers in Texas, but fewer cattle in Kansas, Nebraska and Colorado. Some plants are expected to perform maintenance over the next two weeks, which will put a slight damper on slaughter speeds. Nevertheless, feedlots are still expected to price their cattle higher again this week as the market is invigorated with support.
Last week's negotiated cash cattle purchases totaled 92,524 head. Of that 80,103 head are committed for delivery in the next two weeks and the remaining 12,421 head are committed for delivery in the following 15 to 30 days.
Boxed beef prices are higher: choice up $1.82 ($235.77) and select up $2.98 ($225.68) with a movement of 32 loads (16.35 loads of choice, 7.04 loads of select, zero loads of trim and 8.13 loads of ground beef).
FEEDER CATTLE:
Early Monday, feeder cattle contracts were leery to trade higher, even though corn futures were lower. But, upon giving the market some more time, the feeder cattle contracts now seem comfortable in trading higher into Monday afternoon. March feeders are down $0.12 at $137.60, April feeders are up $0.17 at $140.92 and May feeders are up $0.32 at $142.70. Along with slightly weaker corn prices, it helps that the cash cattle market was able to make leaps and bounds worth of progress last week and if the market can keep scaling higher, feeder cattle contracts should see some upside as well.
LEAN HOGS:
Breaking into the new week with continued support from cutout values is a positive sign for the hog market. February lean hogs are up $0.10 at $69.90, April lean hogs are down $0.45 at $76.20 and June lean hogs are up $0.30 at $87.60. Cash prices are lower Monday morning, but following last week's aggressive buying, packers could be sitting comfortably on the inventory they have. Monday's slaughter is anticipated to be slightly weaker at around 481,000 head, which could slow their buying quest.
The projected lean hog index is delayed from the source. Hog prices are lower on the National Direct Morning Hog Report, down $0.55 with a weighted average of $55.93, ranging from $51.00 to $57.00 on 4,500 head and a five-day rolling average of $56.12. Pork cutouts total 122.15 loads with 114.55 loads of pork cuts and 7.60 loads of trim. Pork cutout values: up $1.14, $86.50.
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