GENERAL COMMENTS:
It was a great day for the livestock contracts as the market performed exceptionally well and allowed for advancements throughout the live cattle, feeder cattle and lean hog contracts. The biggest drivers for the market's upward surge is the demand for the pork market and the exciting feeling that there may be a cash cattle rally brewing if boxed beef prices keep scaling higher. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.20 with a weighted average of $91.47 on 7,654 head. May corn is up 2 1/4 cents per bushel and May soybean meal is up $2.20. The Dow Jones Industrial Average is down 308.05 points and NASDAQ is down 149.84 points.
LIVE CATTLE:
Boxed beef prices are making stout advancements, the futures market closed higher and cash cattle have yet to test the market -- it sounds like a perfect week to gain momentum to me! April live cattle closed $0.35 higher at $119.12, June live cattle closed $1.12 higher at $120.05 and August live cattle closed $0.97 higher at $119.10. Looking at the market from a feedlot perspective, they are sitting in a fine position to at least move the market $2.00 higher. Last week's slightly higher trade gave the market the confidence it needed to keep asking for more, and this week's higher boxed beef trend has solidified the fact that stronger cash cattle trade is a must. Thankfully, with boxed beef prices seeing an uptick, payers may be a little more willing to increase their cash bids.
Boxed beef prices closed higher: choice up $3.04 ($233.99) and select up $2.18 ($225.23) with a movement of 143 loads (76.43 loads of choice, 22.27 loads of select, 14.21 loads of trim and 29.99 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: $2.00 higher. It's silly to ask the market to trade $1.00 higher this week when boxed beef demand is seeing strong advancements and packers will always negotiate prices lower, but never higher. Feedlots would be best suited if they continue to press on and wait until potentially Thursday to move cattle versus jumping on the bids that are first noted come Wednesday.
FEEDER CATTLE:
Even though the corn contracts kept their momentum through the end of day, the feeder cattle contracts still closed fully higher, feeling supported by the stronger trade in the live cattle contracts and through the buying happening in sale barns this week. April feeders closed $0.32 higher at $139.75, May feeders closed $0.37 higher at $145.47 and August feeders closed $0.37 higher at $155.57. At Callaway Livestock Center in Kingdom City, Missouri, compared to last week, feeder steers under 600 pounds sold steady to firm compared to last week's light offering. Steers weighing 600 to 700 pounds sold $2.00 to $4.00 higher, steers weighing 700 to 750 pounds sold steady to $3.00 higher and those weighing over 750 pounds weren't tested enough to get an accurate trend. Feeder heifers weighing 400 to 700 pounds traded steady. Slaughter cows traded $2.00 to $5.00 higher. The CME Feeder Cattle Index for March 22: up $0.38, $134.64.
LEAN HOGS:
The lean hog contracts may have traded doggishly through Monday's trade, but traders felt confident in the complex after seeing heightened demand continue into this week. April lean hogs closed $1.42 higher at $96.47, June lean hogs closed $1.77 higher at $101.25 and July lean hogs closed $1.27 higher at $100.95. Monday's slaughter was revised lower and Tuesday's slaughter is marked lower than where we'd like to see the market clipping along at, but the reduced slaughter isn't coming from a lack of demand or pull back from packers (as evidenced by the cash market), rather from a sole plant that ran into processing issues the past two days. Pork cutouts total 362.32 loads with 228.13 loads of pork cuts and 24.18 loads of trim. Pork cutout values: up $2.52, $105.78. Tuesday's slaughter is estimated at 476,000 head, 17,000 head less than a week ago and 23,000 head less than a year ago. Monday's hog slaughter was revised to 481,000 head. The CME Lean Hog Index for March 19: up $1.00, $92.71.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. Seeing that pork demand is still phenomenally strong, packers may continue to support the cash market.
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