GENERAL COMMENTS:
It's another winning day for the lean hog futures as traders continue to support the complex into the afternoon. Meanwhile, the environment surrounding the cattle market hasn't seen much improvement with corn prices as stout as they are and cash cattle continuing to be held captive in a five-week holding pattern. May corn is up 5 1/2 cents per bushel and May soybean meal is down $4.50. The Dow Jones Industrial Average is up 330.23 points and NASDAQ is up 334.52 points.
LIVE CATTLE:
It's a mixed day for live cattle futures as we haven't seen any improvement from cash cattle trade. But there is modest support trying to sift into some of the contracts. April live cattle are down $0.40 at $118.37, June live cattle are up $0.07 at $119.05 and August live cattle are up $0.17 at $118.10. As the afternoon nears, waiting and watching to see how the actual slaughter data comes in will be interesting as last week steer carcass weights fell 10 pounds and heifer carcass weights dropped nine. The cash cattle market is still quiet without any bids surfacing at this point. A little more clean-up trade should develop before the week's business is truly over, but prices will remain steady with the week's already established trend.
The special Fed Cattle Exchange Auction held Thursday listed a total of 1,002 head (Texas 909 head, Nebraska 53 head, Kansas 40 head), of which none actually sold as they did not meet the reserve prices, that ranged from $112 to $114 (1 lot in Kansas $95). Opening prices ranged from $112 to $113.50 (1 lot in Kansas $90), high bids ranged from $112.75 to $113.75.
Weekly beef net sales of 20,900 metric tons (mt) were down 8% from the previous week but up 17% from the prior four-week average. The three primary increases were for South Korea (6,600 mt), Japan (5,900 mt) and Mexico (2,100 mt).
Boxed beef prices are higher: choice up $0.18 ($227.47) and select up $0.40 ($220.22) with a movement of 76 loads (40.34 loads of choice, 7.49 loads of select, 20.42 loads of trim and 7.67 loads of ground beef).
FEEDER CATTLE:
The game of cat and mouse continues to consume the feeder cattle contracts as corn prices are higher, so the feeder cattle contracts dip lower. March feeders are down $1.42 at $134.87, April feeders are down $1.30 at $140.42 and May feeders are down $1.02 at $145.80. To go along with the higher corn prices, cash cattle prices haven't gotten any better, so the support for feeder cattle futures is really limited.
LEAN HOGS:
Even though pork sales were lower on Thursday's export report, the market was thankful to see China still aggressively buying pork products. Lean hog futures are having a fruitful day trading $1.00 to $2.00 higher in the nearby contracts as the news about a new strain of African swine fever could mean U.S. pork sees strong demand for quite some time. April lean hogs are up $2.30 at $91.02, June lean hogs are up $1.57 at $98.97 and July lean hogs are up $1.52 at $99.25. The spot April contract has traded positively over the last four consecutive days. As the contract trades upward of $91.07 it's once again breaking into new highs for the contract.
Weekly pork net sales of 32,400 mt were down 46% from the previous week and down 17% from the prior four-week average. The three primary increases were for China (10,700 mt), Mexico (6,900 mt) and Japan (3,100 mt).
The projected CME Lean Hog index for 3/10/2021 is up $0.89 at $87.65, and the actual index for 3/9/2021 is up $0.68 at $86.76. Hog prices are lower on the National Direct Morning Hog Report, down $0.29 with a weighted average of $84.84, ranging from $79.00 to $86.50 on 4,130 head and a five-day rolling average of $83.73. Pork cutouts total 158.59 loads with 130.59 loads of pork cuts and 28.00 loads of trim. Pork cutout values: up $1.88, $99.55.
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