GENERAL COMMENTS:
Thursday's trade throughout the futures market hasn't been as thrilling as Wednesday, but thankfully the gusto of support that swept into the complex hasn't left the cash cattle market. The weaker trade seen throughout the live cattle and lean hog contracts seems to be stemming from the fact that both markets want to see continued fundamental support. May corn is down 5 1/2 cents per bushel and May soybean meal is down $2.30. The Dow Jones Industrial Average is up 193.24 points and NASDAQ is down 154.30 points.
LIVE CATTLE:
Live cattle futures are trading mildly lower into Thursday afternoon. The support that rallied the market Wednesday afternoon hasn't disappeared, as bids are developing throughout the countryside slightly higher than Wednesday's trade and feedlots still feel empowered to push the week's trade out to fully achieve the higher marks. Bids of $114 have been renewed in Nebraska, which is steady with last week's trade, but dressed bids have now been placed at $180 up to $181 which would technically be $1.00 stronger if the market can secure the $181. There's still plenty of time left in the week to trade and it's a good sign that packers are realizing if they want the cattle, they are going to need to pay up. Slaughter levels could be slightly lower through the end of the week and into the beginning of next week as there is a plant in Nebraska performing regular maintenance.
Beef net sales of 25,900 metric tons (mt) reported for 2021 were up 24% from the previous week and 39% from the prior 4-week average. The three biggest buyers were Japan (8,100 mt), South Korea (5,400 mt) and China (5,300 mt).
Boxed beef prices are higher: choice up $0.15 ($228.62) and select up $0.21 ($217.80) with a movement of 74 loads (33.34 loads of choice, 12.65 loads of select, 7.25 loads of trim and 20.65 loads of ground beef).
FEEDER CATTLE:
While the lean hog and live cattle contracts are having a lower trending day, feeder cattle futures are more than happy to keep with their upward progression while corn prices are trading in their favor. March feeders are up $0.50 at $137.42, April feeders are up $0.40 at $145.10 and May feeders are up $0.05 at $150.22. The push in the feeder cattle complex really stems from the fact that corn prices are giving the complex a break. As we've mentioned time and time again, high input costs and lofty daily cost of gain has really hindered feedlots' ability to be aggressive in the cattle market. If the corn market is going to continue to trade sideways, there's hope that cash cattle prices will creep higher and feedlots will see greater profitability.
LEAN HOGS:
Even with a strong export report, the lean hog market is seeming to step back and take a minute after being extremely aggressive in the early part of the week. April lean hogs are up $0.37 at $94.05, June lean hogs are down $1.37 at $100.95 and July lean hogs are down $0.97 at $101.12. The futures market seems to be willing to carry the risk for the time being, but undoubtedly needs to continue to see excellent demand from market fundamentals. Slaughter continues to run at heightened speeds and pork cutout values continue to be supported, which are all good signs for the market's aspirations of higher trade.
Pork net sales of 39,700 mt reported for 2021 were up 23% from the previous week and 5% from the prior 4-week average. The three biggest buyers were Mexico (18,200 mt), China (5,800 mt) and Japan (4,900 mt).
The projected CME Lean Hog Index for 3/17/2021 is up $0.68 at $91.24, and the actual index for 3/16/2021 is up $0.65 at $90.56. Hog prices are unavailable on the National Direct Morning Hog Report due to packer submission problems. Pork cutouts total 156.13 loads with 139.86 loads of pork cuts and 16.27 loads of trim. Pork cutout values: up $8.14, $108.94.
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