GENERAL COMMENTS:
The lean hog and feeder cattle contracts had excellent days as the lean hog market continues to be met with exception fundamental support and the break in the corn market's higher surge allowed for the feeder cattle contracts to regain some positioning. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.16 with a weighted average of $65.26 on 6,202 head. March corn is down 21 3/4 cents per bushel and March soybean meal is down $16.40. The Dow Jones Industrial Average is up 61.97 points and NASDAQ is down 35.17 points.
LIVE CATTLE:
The live cattle contracts closed with pressure mostly affecting the spot February contract and the nearby April contract, though the entire complex closed lower. As traders look at the market and the lavish success that the complex has had over the last two weeks, they grow skeptical of the overbought environment. February live cattle closed $1.32 lower at $116.12, April live cattle closed $1.12 lower at $122.70 and June live cattle closed $0.52 lower at $119.12. Meanwhile, the battle in the countryside is still ripe for the taking with very little interest having developed from packers. There were some cattle that sold in Kansas at $114, which is fully steady with last week, and some in Nebraska for $180, which is $1.00 higher than last week, but both movements were so light that it's hard to say the market has established a trend. Of the cattle that have sold this week, they have been bought with delivery for the week of Feb. 22, 2021. Wednesday's slaughter is estimated at 116,000 head, 3,000 head less than a week ago and 5,000 head less than a year ago.
The Fed Cattle Exchange Auction listed a total of 1,251 head, of which 518 actually sold, 733 head were listed as unsold, as they did not meet the reserve prices, that ranged from $114 to $115. Opening prices were at $113, high bids ranged from $113 to $114. The state-by-state breakdown looks like this: Texas 1,104 total head, with 518 head sold at $114.00, 586 head went unsold; Kansas 41 total head, all went unsold; Oklahoma 106 total head, all went unsold.
Boxed beef prices closed mixed: choice down $1.27 ($233.02) and select up $0.23 ($220.96) with a movement of 136 loads (62.99 loads of choice, 10.72 loads of select, 42.35 loads of trim and 20.03 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady to $1.00 higher. Packers aren't keen to paying $1.00 higher this week and are going to fight tooth and nail to avoid doing so. This week's cash cattle trade is going to be a battle, and if feedlots can push the market higher, they deserve a healthy applause! It is important to remember that this week the plant in Dodge City is down, which is limiting slaughter capacity; next week the plant is anticipated to be back up and running, which means packers will be in the hunt for cattle again.
FEEDER CATTLE:
With a large percentage of row-crop farmers also having stakes in the feeder cattle market it's hard to say it was a "good" day for the feeder cattle contracts because the corn market tumbled lower. But, truth be told, the pressure of rising corn prices added immense stress to the feeder cattle contracts and kept the contracts from trading higher. Nearby corn contracts dipped as much as $0.18 to $0.21 lower and gave the feeder cattle contracts as easy green light to trade higher through Wednesday's close. March feeders closed $0.85 higher at $139.50, April feeders closed $0.32 higher at $143.50 and May feeders closed $0.35 higher at $145.42. At Huss Livestock Market in Kearney, Nebraska, compared to a week ago, steers sold steady and heifers sold $1.00 to $3.00 higher. Demand was moderate to good with buyers still coming to the sale despite bitter cold temperatures. Most of the offering sold in medium flesh with some fleshy cattle in the mix. Buyers didn't bulk at the fleshier cattle as their quality was good. The CME Feeder Cattle Index for Feb. 9: up $0.02, $135.65.
LEAN HOGS:
The accomplishments this past week of the lean hog market haven't gone unnoticed and Wednesday's market added to that success. February lean hogs closed $0.95 higher at $73.55, April lean hogs closed $1.45 higher at $81.82 and June live cattle closed $0.42 higher at $90.20. Gearing up for Thursday's export report, the hog market is hopeful that once again the demand will be seen from other countries and support strong slaughter speeds. Pork cutouts totaled 278.01 loads with 246.15 loads of pork cuts and 31.86 loads of trim. Pork cutout values: up $1.50, $86.86. Wednesday's slaughter is estimated at 490,000 head, 5,000 head less than a week ago and 2,000 head less than a year ago. The CME Lean Hog Index for Feb. 8: up $0.67, $71.07.
THURSDAY'S CASH HOG CALL: Steady. The lean hog market has been met with significant support this past week and the cash market has seen significant gains. At some point, packers are going to have their needs filled and draw back.
No comments:
Post a Comment