Feeder cattle futures led the gains in the livestock market Monday, trying to make up for last week's lost ground and struggling to keep up with the fed cattle market's continual trend of day-by-day fresh contract highs. Lean hog futures also explored fresh contract highs amid a heavy volume of pent-up trade Monday. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.86 with a weighted average of $98.08 on 3,437 head. This week's cash cattle trade will be referenced off last week's trade: mostly $190 in the North and $117 in the South. May corn closed down 6 1/2 cents per bushel at $5.53 1/2 and May soybean meal closed down $3.90 per ton at $406.30. The Dow Jones Industrial Average is up 373.98 points and NASDAQ is up 268.64 points.
Deferred live cattle futures closed up $1.875 in the June contract at $124.425 and up $1.775 in the August contract at $123.30. New contract highs were hit right near the end of Monday's session amid exuberant futures trading volume. We are heading into a season when strength in beef prices typically translates into strong cattle prices as well. Boxed beef prices were considerably higher again Monday afternoon: choice up $5.82 ($258.67) and select up $2.89 ($249.86) with a movement of 105 loads (53.36 loads of choice, 12.87 loads of select, 20.62 loads of trim and 18.37 loads of ground beef). Monday's slaughter was seen at 108,000 head, which due to holiday time at slaughter facilities is 11,000 head fewer than a week ago. For benchmarking purposes, last week's cash cattle business took place in the North mostly at $190 for dressed deals (a $5 weekly gain) and in the South mostly at $117 for live deals (a $2 weekly gain).
TUESDAY'S CASH CATTLE CALL: $1 to $3 higher. Actual cash business is unlikely Tuesday, but as feedlots offer showlists later this week, they know they have the trend on their side, and they know packers are penciling rich profits these days.
In a world where beef prices and fed cattle prices keep trending higher and October live cattle futures, for instance, are hitting prices like $126 per cwt, it's reasonable to see the feeder cattle market experiencing bullish demand too. The April feeder cattle futures contract closed up $2.575 at $146.45, the May contract closed up $2.55 at $151.775, and the August contract closed up $2.15 at $160.15. In regions where sale barns are offering up stocker calves this time of year, demand is good or very good. 500-lb steers in Tama, Iowa, Monday brought an average price of $180.43 per cwt. A large sale (5,500 head) at the Joplin Regional Stockyards in Missouri saw feeder steers and heifers trading steady to $2 lower. The CME Feeder Cattle Index for April 2: down $0.83 at $139.80.
A positive jobs report Friday was released during the markets' three-day weekend, so on Monday all the pent-up bullishness sparked fresh all-time highs in stock markets and various other financial assets, including ag futures like the lean hog contracts, which also explored fresh contract highs in heavy trading volume. The April contract traded as high as $103 per cwt but closed up $0.625 at $102.40. The June contract traded as high as $107.40 but closed down $0.725 at $105.60. Of course, improved employment in the U.S. can be directly tied to American grocery shopping trends, and grilling season is coming right up, with vaccinated Americans feeling ready to celebrate. Pork cutouts Monday afternoon total 288.78 with 260.31 loads of pork cuts and 28.46 loads of trim. Pork cutout values: down $0.22, $109.29. Monday's hog slaughter was seen at 331,000 head, which due to holiday time at the slaughter facilities is 152,000 head fewer than a week ago. The CME Lean Hog Index for April 1: up $0.41, $99.38, and the projected lean hog index for April 2: up $0.72, $100.10.
TUESDAY'S CASH HOG CALL: Steady to $1 higher. While pork cutouts continue to explore seasonal values, and the international markets remain hungry, packers could continue to be aggressive in the cash hog market.