GENERAL COMMENTS:
The livestock complex closed lower but couldn't have had a better day throughout the countryside, and in respect to the market's fundamentals! Feeder cattle sold higher, the lean hog market blew through all expectations (again) and cash cattle even traded higher in the North. It was a good day to strengthen the market's core fundamentals! Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.42 with a weighted average $88.26 on 12,161 head. May corn is down 11 1/2 cents per bushel and May soybean meal is down $6.70. The Dow Jones Industrial Average is down 153.07 points and NASDAQ is down 409.03 points.
LIVE CATTLE:
Someone please call in the mariachi band, pop the top off a bottle champagne or do whatever your happy dance entails because, believe it or not, the cash cattle market saw higher trade Thursday afternoon! It's amazing what can happen with a little bit of patience and Thursday afternoon, feedlots were rewarded by waiting to trade their cattle instead of letting them go Wednesday afternoon. It's been a long, long six weeks of steady trade and seeing this advancement throughout the Northern Plains is just what the cattle market needed. There was a light trade reported in the Northern with dressed deals ranging from $0.50 to $2.50 higher than last week's average. Kansas saw a few more head trade at $114, but it was on an extremely light movement.
The futures market wasn't nearly as exciting as the cash cattle trade that developed, as the live cattle contracts sank lower as the day progressed. April live cattle closed $0.85 lower at $118.57, June live cattle closed $2.37 lower at $119.65 and August live cattle closed $2.65 lower at $119.02. Thursday's slaughter is estimated at 111,000 head, 7,000 head less than a week ago and 6,000 head less than a year ago. Wednesday's slaughter was revised to 114,000 head.
Thursday's actual slaughter data shared that, for the week ending March 6, steer carcass weights gained a pound from the previous week to average 900 pounds, while heifers lost a pound to average 833 pounds.
Boxed beef prices closed higher: choice up $0.14 ($228.61) and select up $0.52 ($218.11) with a movement of 121 loads (57.94 loads of choice, 18.34 loads of select, 21.52 loads of trim and 23.47 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady with the week's business. Seeing that there's been a healthy movement of cattle already this week, business will most likely trade within the ranges already set.
FEEDER CATTLE:
The feeder cattle contracts fell sharply lower at the day's end, even though the corn market closed lower right alongside the complex. With both the live cattle and lean hog contracts trading lower, the market grew skeptical of its higher surge and traders backed away quickly from the market. March feeders closed $1.40 lower at $135.52, April feeders closed $3.22 lower at $141.42 and May feeders closed $3.55 lower at $146.62. But thankfully the board's fear of the market's lower trade didn't hinder the countryside's ability to market feeders and calves Thursday afternoon. At Winter Livestock Auction in Pratt, Kansas, compared to last week, feeder steers weighing 800 to 975 pounds sold $1.00 to $2.00 higher. Steers weighing 600 to 800 pounds sold steady and steer calves weighing 375 to 600 pounds sold $6.00 to $8.00 higher. Feeder heifers weighing 700 to 950 pounds sold $2.00 to $3.00 higher, heifers weighing 500 to 700 pounds sold steady and heifer calves weighing 300 to 500 pounds sold $2.00 to $5.00 stronger. The CME Feeder Cattle Index for March 17: up $0.33, $133.95.
LEAN HOGS:
Even though the lean hog contracts traded lower throughout the day -- other than in the spot April contract -- the market's fundamentals couldn't have cared less. I was skeptical of the midday's stout advancements in the pork cutout value, but low and behold the market's demand carried through the day's closing report and pushed pork cutout prices up $6.00! The cash hog market was on board with the day's rally as well, as packers dove into the market and bought 12,161 head at higher prices yet again. Thankfully, slaughter speeds continue to favor and fuel this bullish market and hog producers are keeping like they are on top of the world -- and truth be told, they kind of are! April hogs closed $0.62 higher at $94.30, June lean hogs closed $2.30 lower at $100.02 and July lean hogs closed $2.20 lower at $99.90. Pork cutouts totaled 244.25 loads with 214.00 loads of pork cuts and 30.25 loads of trim. Pork cutouts values: sharply higher, up $6.00, $106.80. Thursday's slaughter is estimated at 492,000 head, 4,000 head less than a week ago and 3,000 head less than a year ago. The CME Lean Hog Index for March 16: up $0.65, $90.56.
Pork net sales of 39,700 mt reported for 2021 were up 23% from the previous week and 5% from the prior four-week average. The three biggest buyers were Mexico (18,200 mt), China (5,800 mt) and Japan (4,900 mt).
Thursday's actual slaughter data shared uneventful news for the hold industry as hog weights continue to hold steady. For the week ending March 6, live weights were unchanged at 291 pounds and dressed weights were unchanged at 217 pounds.
FRIDAY'S CASH HOG CALL: Steady. At this point, what can I say!? This hog market is crazy! Heading into the weekend, I lean cautiously and think the market could trade steady, even after a strong export report and lavish pork demand.
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