GENERAL COMMENTS:
It's a peculiar week for the livestock market as the countryside sits idly trying to assess the damage done by the recent storm in the form of lighter carcass weights, calves lost, the total amount of lost tonnage due to slower processing speeds and the list goes on. For the most part, the cattle contracts are trading doggishly as traders are leery of jumping into the market until further clarity is known. The lean hog contracts are keeping with the modest progression like they've continued to do for the past month. March corn is down 1 1/4 cents per bushel and March soybean meal is up $1.30. The Dow Jones Industrial Average is down 31.90 points and NASDAQ is down 174.82 points.
LIVE CATTLE:
The cold hasn't completely broken and alleviated cattlemen of their all-hands-on-deck, 24/7 regimen, but by the end of the week we can see some light at the end of the tunnel with the weather forecast showing warmer temperatures. But, like with all things, the warmer weather comes with a consequence. For those regions that got large accumulations of snow, warm temperatures mean wet, sloppy conditions and from cow-calf operations to the processing plants, everyone hates sloppy conditions. Snow and ice conditions are still expected to hit parts of Texas, where unfortunately they are already suffering immensely.
While the countryside tries to manage minute-by-minute, the live cattle contracts continue to trade doggishly without any true trader interest helping rally the complex. February live cattle are down $0.45 at $115.70, April live cattle are down $1.45 at $124.37 and June live cattle are down $0.90 at $120.80. Thus far there's been no interest in the cash cattle market as packers are running slower processing schedules and have a plethora of cattle already secured for this time. These slower processing speeds are working in their favor as they can pull cattle from their committed inventory and avoid having to jump into the cash market where feedlots are determined to move the market higher yet again this week.
The Fed Cattle Exchange Auction on Wednesday listed a total of 1,444 head (Texas 1,194 head, Kansas 250 head), of which all were listed as unsold as they did not meet the reserve prices, which ranged from $113.50 to $114.50. Opening prices ranged from $108 to $111; high bids ranged from $110 to $113.
Boxed beef prices are higher: choice up $1.59 ($236.36) and select up $3.55 ($225.58) with a movement of 43 loads (24.38 loads of choice, 6.30 loads of select, 5.54 loads of trim and 6.69 loads of ground beef).
FEEDER CATTLE:
The corn market isn't pressuring the feeder cattle contracts, but the lack of trader interest and support has left the contracts no other option but to flop sharply lower. March feeders are down $2.40 at $138.37, April feeders are down $1.87 at $142.72 and May feeders are down $1.05 at $145.15. The market's lack of interest is multifaceted this week as numerous sales have been canceled because of weather or because of power outages. Corn-belt states aren't wanting to receive new cattle in these conditions. The week's theme is to simply weather the storm and catch back up with the market's importance late this week or early next week when things get back to normal.
LEAN HOGS:
The spot April lean hog contract is struggling to trade higher while the rest of the complex adds modestly to Tuesday's advancement. April lean hogs are down $0.42 at $85.75, June lean hogs are up $0.35 at $93.22 and July lean hogs are up $0.37 at $92.82. The cash hog market is much like the cash cattle market this week as slaughter speeds are reduced thanks to the hinderances of the recent storm. But packers know recouping the loss in production this week will be vital to keep up with demand. Though packers will have to make up for the tonnage lost this week due to slower processing speeds, it's a balancing act to try to manage just how deep they should dive into the market before the week's losses are fully assessed.
The projected lean hog index for 2/15/2021 is up $0.97 with a weighted average of $75.51, and the actual index for 2/12/2021 is up $1.39 at $74.54. Hog prices are higher on the National Direct Morning Hog Report, up $2.37 with a weighted average of $67.30, ranging from $62.00 to $72.00 on 8,805 head and a five-day rolling average of $66.61. Pork cutouts total 155.32 loads with 141.72 loads of pork cuts and 13.60 loads of trim. Pork cutout values: up $3.29, $93.00.
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