Thursday, February 11, 2021

Thursday Midday Livestock Market Summary - Contracts Veer Higher

GENERAL COMMENTS:

Thursday morning trade has been a battle in the cattle contracts as both live and feeder futures have danced on both sides of steady. Feeder cattle contracts continue to monitor the corn market thoroughly and live cattle contracts are looking for confidence in the cash cattle market. March corn is up 3 cents per bushel and March soybean meal is up $5.40. The Dow Jones Industrial Average is down 135.50 points and NASDAQ is down 25.95 points.

LIVE CATTLE

Live cattle futures are modestly higher, waiting patiently to see what trade is going to develop in the cash cattle market. February live cattle are down $0.55 at $115.57, April live cattle are up $0.50 at $123.20 and June live cattle are up $0.10 at $119.22. With the drastically cold temperatures the country has faced this week, the cash cattle market sits in the fine position to demand higher prices, although packers are scrambling to find an out as opposed to paying more again this week. Thus far in Thursday's business the cash cattle market has been mostly quiet with just a small trade developing in Nebraska for $113, which is $1.00 lower than Wednesday's business but steady with last week. Bids of $180 as also offered in Nebraska but feedlots have yet to accept that offer. The market still needs to trade a considerable number of cattle and with the plant in Dodge City expected to be back up and in production next week, faster slaughter speeds will demand more cattle. Asking prices in the South are at $115 to $116 and in the North at $185-plus.

Beef net sales of 17,500 metric tons (mt) reported for 2021, increases were primarily for Japan (5,100 mt, including decreases of 500 mt), South Korea (4,300 mt, including decreases of 500 mt) and Mexico (3,200 mt, including decreases of 100 mt).

The special Fed Cattle Exchange Auction was uneventful. It listed a total of 634 head (487 head in Texas, 41 head in Kansas and 106 head in Oklahoma) all of which went unsold as they did not meet the reserve prices, which ranged from $114 to $114.50. Opening prices were at $113, high bids ranged from $113 to $114. Meanwhile the countryside still sits idly with bids surfacing.

Boxed beef prices are higher: choice up $0.06 ($233.08) and select up $0.29 ($221.25) with a movement of 48 loads (25.91 loads of choice, 5.14 loads of select, 3.46 loads of trim and 13.17 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures have jumped back and forth, uncertain how to take the corn market's slight rally. With corn prices securing a 5-cent rally in the nearby contracts at the noon hour, the feeder cattle contracts aren't necessarily concerned, but are monitoring the complex intensely as even a slight upward swing can cut into feedlots' profitability when prices are as elevated as they are. March feeders are up $0.40 at $139.92, April feeders are up $0.25 at $143.75 and May feeders are up $0.22 at $145.65. With temperatures as bitterly cold as they are, across the nation cattle stress indexes have spiked as cattle go from using their rations to digest and convert feed into extra pounds to now using their feed as a heat resource and are trying to simply maintain condition through the adverse conditions.

LEAN HOGS:

Lean hog futures are celebrating another day of modest gains thankfully supported by another healthy export report. February lean hogs are up $0.47 at $74.02, April lean hogs ae up $1.22 at $83.05 and June lean hogs are up $0.07 at $90.27. Not only is the day relishing in the fact that China continues to seek more product, but domestic demand is strong with cutout values up over $6.00 on the midday report.

Pork net sales of 36,900 mt reported for 2021, increases were primarily for China (9,700 mt, including decreases of 1,200 mt), South Korea (8,200 mt, including decreases of 200 mt) and Mexico (5,100 mt, including decreases of 400 mt).

The projected lean hog index for 2/10/2021 is up $0.62 at $72.36, and the actual index for 2/9/2021 is up $0.67 at $71.74. Hog prices are not available on the National Direct Morning Hog Report. Pork cutouts total 145.92 loads with 122.61 loads of pork cuts and 23.31 loads of trim. Pork cutout values: up $6.02, $92.88.




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