Wednesday presented some challenges to the livestock complex, but both the live cattle and lean hog contracts handled them beautifully. Meanwhile, the feeder cattle contracts tumbled lower as corn prices jumped $0.25 higher. Looking to Thursday's trade, the market looks primed and ready to capitalize on a stronger cash cattle front! Feedlots have passed up any and all bids as of this point and are ready to see strong advancements in the cash market in Thursday's trade. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.18 with a weighted average of $95.65 on 8,845 head. May corn is up 25 cents per bushel and May soybean meal is up $25.00. The Dow Jones Industrial Average is down 85.41 points and NASDAQ is up 201.48 points.
The futures market closed higher (that's a win), the only cash cattle that sold were those on the online auction (that's a win) and boxed beef prices jumped significantly higher again Wednesday afternoon (that too is a win)! Even though corn prices shot higher, the live cattle market kept it's cool and feedlots are unwilling to squander this week's opportunity at higher cash cattle prices. The simple fact that the only cattle that have traded thus far in the week were those on the Fed Cattle Exchange is applause worthy, as feedlots are rallying together and sending strong signals to packers that steady prices aren't going to cut it this week. April live cattle closed steady at $120.97, June live cattle closed $0.67 higher at $122.90 and August live cattle closed $0.72 higher at $121.97. Wednesday's slaughter is estimated at 119,000 head, 2,000 head less than a week ago and 2,000 head more than a year ago.
The Fed Cattle Exchange Auction listed a total of 4,489 head, of which 1,160 actually sold, 3,329 head were listed as unsold, as they did not meet the reserve prices, that ranged from $116 to $120. Opening prices ranged from $115 to $118, high bids ranged from $115.50 to $118. The state by state breakdown looks like this: Kansas 110 total head, with 36 head sold at $116, 74 head went unsold; Nebraska 3,032 total head, with 951 head sold at $118, 1,943 head went unsold; Texas 1,347 total head, with 173 head sold at $116.50, 1,174 went head unsold.
Boxed beef prices are higher: choice up $2.29 ($247.12) and select up $2.21 ($238.13) with a movement of 116 loads (64.59 loads of choice, 19.16 loads of select, 16.55 loads of trim and 15.69 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: $3.00 to $4.00 higher. Feedlots have done a phenomenal job waiting the market out and pushing the bulk of this week's trade to late in the week. With boxed beef prices rallying and packers running swift chain speeds, their need for cattle is substantial and feedlots intend to move this week's market higher.
When corn prices jump limit high, the feeder cattle contracts are bound to take a beating. April feeders closed $2.95 lower at $143.87, May feeders closed $2.80 lower at $149.40 and August feeders closed $3.02 lower at $157.27. Thankfully, the live cattle market weathered the storm of Wednesday's volatile corn market well and will hopefully continue to trade higher into Thursday and Friday. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers and heifers sold $2.00 to $4.00 higher. Steer calves sold $4.00 to $8.00 higher, with the exception of those weighing 300 to 400 pounds. Heifer calves traded $5.00 to $10.00 higher. Demand was called excellent throughout the sale as buyers are realizing that grazing season is right around the corner. The CME Feeder Cattle Index for March 30: up $0.16, $139.91.
The lean hog contracts changed their tune Wednesday afternoon and were able to close mostly higher other than in a few of the nearby contracts that are still trading above $100.00. April lean hogs closed $0.12 higher at $101.05, June lean hogs closed $0.72 lower at $105.30 and July lean hogs closed $0.22 lower at $104.67. Heading into Thursday's trade, the lean hog market will be up early looking forward to the market's weekly export report. If the report can yield favorable news, then the market should have no trouble trading higher. If the report shows sharply lower sales, then questions about demand will be the mutter heard throughout the day, even though domestic demand continues to be unpresented. Pork cutouts totaled 306.24 loads with 251.64 loads of pork cuts and 54.60 loads of trim. Pork cutouts closed higher: up $2.08, $108.97. Wednesday's slaughter is estimated at 492,000 head, 6,000 head more than a week ago and 16,000 head more than a year ago. The CME Lean Hog Index for March 29: up $0.66, $98.04.
THURSDAY'S CASH HOG CALL: Lower. As the market moves one day closer to the long Easter holiday, it's unlikely that packers will be overly active in the cash hog market before the three-day weekend.