It was a rather impressive day throughout the livestock sector, as nearly the entire complex closed higher, and the market's fundamentals are aligning for a strong trade later in the week as well. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.14 with a weighted average of $106.08 on 6,205 head. May corn is up 14 1/2 cents per bushel and July soybean meal is up $3.40. The Dow Jones Industrial Average is down 256.33 points and NASDAQ is down 128.50 points.
With the board closing fully higher, boxed beef prices higher again and slaughter running aggressively to hopefully process somewhere between 650,000 to 660,000 head this week, the cash cattle market has stars aligning in its favor if feedlots can wave by the week's early bids. April live cattle closed $0.22 higher at $120.57, June live cattle closed $0.60 higher at $119.20 and August live cattle closed $0.75 higher at $119.40. The June contract flirted with the idea of trading below the support plane at $118.00, but thankfully the market had a surge of support favor the market early in the day, which allowed for a successfully higher close. The deferred contracts fared the best as their gains were well over $1.00. The cash cattle market has yet to see any bids surface and asking prices are still unestablished. The Texas Cash Pool didn't sell any cattle this week as their highest bid was $120.55 with time -- the only other packer to offer a bid was at $119.02. Tuesday's slaughter is estimated at 121,000 head, 5,000 head more than a week ago and 36,000 head more than a year ago (year ago levels were greatly affected by COVID-19).
Boxed beef prices closed higher: choice up $2.09 ($278.26) and select up $1.34 ($270.47) with a movement of 91 loads (51.01 loads of choice, 11.01 loads of select, 11.37 loads of trim and 17.87 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady to $1.00 higher. This week's cash cattle market has a chance at trading higher, but it won't come easy as packers sit on supplies of cattle that they've bought with time. Packers knew that the cash market was going to continue to creep higher and that supplies were going to only become thinner as the spring continues to trade on, so they were wise and have been buying a significant volume of cattle with time. That's disheartening to this week's cash cattle market, but the fact remains that packers need cattle in order to push slaughter above 650,000 head and to keep up with consumer's demand. Bids will most likely begin to surface Wednesday.
Even though the nearby corn contracts closed $0.09 to $0.14 higher and the May corn contract closed above $6.00 -- the feeder cattle contracts were able to hold above the $142 support plane and rally on the momentum that stemmed throughout the livestock complex. April feeders closed $0.15 lower at $137.57, May feeders closed $0.30 higher at $142.77 and August feeders closed $1.75 higher at $154.52. With corn prices continuing their scorching rally, the cattle contracts need to see some upward progression to ensure profitability. At Callaway Livestock Center in Kingdom City, Missouri, compared to last week, steer calves weighing 450 to 500 pounds sold steady to $3.00 lower, steer calves weighing 500 to 550 pounds sold steady to $5.00 lower, and steers weighing 550 to 600 pounds sold $4.00 to $8.00 lower. Feeder heifers weighing 400 to 500 pounds sold steady to firm, heifers weighing 500 to 600 pounds sold $3.00 to $5.00 lower and heifers weighing 600 to 750 pounds sold mostly steady. The CME Feeder Cattle Index for April 19: down $1.65, $138.48.
The lean hog complex was elated to close mostly $1.00 to $2.00 higher Tuesday afternoon after last week's downward spiraling trade Thursday and Friday. The contracts were able to rally amid strong pork demand without worrying about a lack of technical support. Pork cutout values were able to close higher and cash prices saw a significant jump Tuesday afternoon as cash prices rose $1.14. Still, the cash hog movement for the day only totaled 6,205 head, which most likely stems from the fact supplies are so hard to come by, not that packers are only selectively buying. Pork cutouts totaled 353.13 loads with 330.99 loads of pork cuts and 22.14 loads of trim. Pork cutout values: up $0.95, $115.03. Tuesday's slaughter is estimated at 485,000 head, 1,000 head more than a week ago and 125,000 head more than a year ago (year ago levels were greatly affected by COVID-19). Monday's hog slaughter was revised to 485,000 head -- down 5,000 head from the originally stated 490,000 head. The CME Lean Hog Index for April 16: up $0.52, $103.76.
WEDNESDAY'S CASH HOG CALL: Steady. With pork prices jumping over $1.00 Tuesday afternoon, packers will most likely support a steady, if not somewhat higher market, as market-ready hog supplies are hard to come by. Yes, Monday's slaughter was revised lower but only by a mere 5,000 head, which won't hinder packer's buying quotas significantly this week if the market continues to process at that 485,000 head mark.