GENERAL COMMENTS:
It was a busy day for the livestock markets and Thursday's market isn't going to be any slower with export reports released early in the day and then Thursday afternoon debuting the Quarterly Hogs and Pigs report. Wednesday's cash cattle trade was exciting, as the South was able to secure $1.00 more than last week, but the North scored trade that was $3.50 higher than a week ago. Hog prices closed higher on the National Direct Afternoon Hog Report, up $0.71 with a weighted average of $92.18 on 12,625 head. May corn is up 2 cents per bushel and May soybean meal is up $2.20. The Dow Jones Industrial Average is down 3.09 points and NASDAQ is down 265.81 points.
LIVE CATTLE:
Corn prices are holding steady (check), slaughter is continuing to run aggressively (check) and cash cattle trade is developing higher (check, check and check!) There's been positivity laced throughout the market this week and it's been an absolute breath of fresh air. The market's fundamentals (slaughter, boxed beef prices and cash cattle trade) have set their sights on higher ground and have consequently led the futures market higher along with their rally. April live cattle closed steady at $119.12, June live cattle closed $0.25 higher at $120.30 and August live cattle closed $0.65 higher at $119.75. There was light trade that developed throughout the countryside Wednesday afternoon. Southern cattle sold for mostly $115 which is $1.00 higher than last week's business, and Northern cattle sold for $184 to $185 which is about $3.50 higher than last week. Wednesday's slaughter is estimated at 121,00 head, 7,000 head more than a week ago and 4,000 head less than a year ago.
The Fed Cattle Exchange Auction listed a total of 2,633 head, of which 1,550 actually sold, 1,083 head were listed as unsold, as they did not meet the reserve prices, that ranged from $115 to $116. Opening prices ranged from $112 to $116, high bids ranged from $114.25 to $116. The state by state breakdown looks like this: Texas 1,144 total head, with 173 head sold at $115.00, 971 head went unsold; Kansas 112 total head, all of which went unsold; Nebraska 1,377 total head, all sold at $116.00.
Boxed beef prices closed mixed: choice up $0.85 ($234.84) and select down $1.16 ($224.07) with a movement of 126 loads (63.83 loads of choice, 17.20 loads of select, 18.14 loads of trim and 26.68 loads of ground beef).
THURSDAY'S CASH CATTLE CALL: Steady. I'd like to be able to say that the Southern Plains should be able to score at least another $1.00 higher this week, but with their showlists being ample, it's a tough call. Seeing that the market has been tested in both the North and the South, the market will most likely continue to trade within those price ranges.
FEEDER CATTLE:
The nearby corn contracts may have been able to sneak by and close slightly higher before the day's end, but that didn't derail the excitement in the feeder cattle complex. April feeders closed $2.70 higher at $142.45, May feeders closed $1.85 higher at $147.32 and August feeders closed $1.30 higher at $156.87. Thankfully, the corn market's stronger trade didn't develop until later in the day when the feeder cattle contracts were confident in trading higher and the stronger cash cattle trade sure helped boost the feeder cattle market's confidence. At OKC West Livestock Auction in El Reno, Oklahoma, compared to last week, feeder steers sold fully steady. Feeder heifers, however, sold $2.00 to $3.00 higher with the exception of those weighing over 900 pounds, which sold steady. Steer calves sold $1.00 to $3.00 lower, and heifer calves traded steady to $2.00 lower when compared to last week's market. Demand was strong throughout most of the sale and with train expected to hit the surrounding area next week producers are hopeful that grass conditions will continue to only get better. The CME Feeder Cattle Index for March 24: up $0.22, $134.86.
LEAN HOGS:
Thankfully, the nearby lean hog contracts were able to close the day higher while the deferred contracts drew back throughout Wednesday's trade. April lean hogs closed $1.30 higher at $97.77, June lean hogs closed $0.80 higher at $102.05 and July lean hogs closed $0.57 higher at $101.52. It's truly amazing how strong this hog rally has been, and the market only continues to add more and more support behind the movement. Looking to Thursday's trade, the market has several different curveballs that could be thrown its way. Keeping a close tab on both Thursday's export report and the Quarterly Hogs and Pigs report will be key, but it's also important to keep a close eye on slaughter levels. There's been no sign of packer regression and no sign that plants are looking at slowing chain speeds, but the revised slaughter numbers for earlier in the week are stemming to processing troubles at one sole plant. Seeing that packers again moved the cash market higher, buying upward of 12,625 head, leads one to believe that they still see plenty of strength in this market and are wanting to secure as much product as available. Pork cutouts totaled 254.12 loads with 231.56 loads of pork cuts and 22.56 loads of trim. Pork cutout values: up $4.69, $110.47. Wednesday's slaughter is estimated at 491,000 head, 3,000 head less than a week ago and 12,000 head less than a year ago. Tuesday's hog slaughter was revised to 465,000 head. The CME Lean Hog Index for March 22: up $0.76, $93.47.
THURSDAY'S CASH HOG CALL: Steady. Packers could be a little gun shy to Thursday's market, simply given the fact that the day is heavily weighted with reports and they've already been aggressive earlier in the week.
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