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Thursday, April 1, 2021

Thursday Closing Livestock Market Update - Export Bullishness Boosts Hog Prices

GENERAL COMMENTS:

Lean hog futures led the gains in the livestock market Thursday, boosted by a massive weekly export-sales report and consistent willingness from pork customers to meet ever-higher price tags. This is true for beef customers, too, and although live cattle and feeder cattle futures ended the day mixed, these markets remain bullishly supported. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.05 with a weighted average of $96.70 on 5,500 head. The week's cash cattle trade hasn't been fully figured out yet Thursday afternoon, although some cattle traded in the South (Kansas) at $117, which was $2 higher than last week's weighted average. May corn closed down 4 1/2 cents per bushel at $5.59 3/4 and May soybean meal closed down $13 per ton at $410.20. The Dow Jones Industrial Average is up 171.66 points and NASDAQ is up 238.08 points.

From Friday (3/26) to Thursday (4/1), livestock futures scored the following changes: April live cattle off $0.075, June live cattle up $0.775, April feeder cattle off $1.25, May feeder cattle off $0.65, April lean hogs up $0.975, May lean hogs up $1.325.

LIVE CATTLE:

After being nudged to a fresh contract high on Thursday morning, the June live cattle contract closed down $0.35 at $122.55 per cwt. The nearby April live cattle contract closed down $0.95 at $120.025. Boxed beef prices were considerably higher again Thursday afternoon: choice up $2.85 ($249.97) and select up $6.57 ($244.70) with a movement of 125 loads (72.52 loads of choice, 13.46 loads of select, 19.64 loads of trim and 19.09 loads of ground beef). Awesome grocery store beef features have been noted, with ground beef advertised at $2 per pound, for instance, which suggests the beef market ought to expect a huge volume of business between now and Memorial Day, with money in peoples' pockets and a willingness to spend it on great grilling experiences, and perhaps even restaurant meals for the vaccinated. That means the packers are penciling huge profits over the next few weeks and will want to get their hands on ready fat cattle. A light trade developed Thursday in parts of the South at $117, which is $2 higher than last week's weighted average. The North continues to hold out for more money. Asking prices are around $190 to $192 in the North, and $118 to $120 in the South.

FRIDAY'S CASH CATTLE CALL: $2 to $3 higher. Thursday's $117 trade in Kansas may provide a pattern, and feedlots might decide to accept nothing less, in an environment where packers' volume and profitability is undeniable.

FEEDER CATTLE:

The livestock futures markets will be closed April 2 for Good Friday, so the nearby feeder cattle contract's Thursday close at $143.875 represents a $1.25 weekly loss. Still, with calves born today destined for a fall market near $160 per cwt (the October contract closed Thursday up $0.90 at $159.15), the trend has lately been favorable for cow-calf producers. That is true only if they will have the grass and feed to keep their critters alive through the spring and summer -- expanding drought conditions in the High Plains are a reminder of that threat, and feed prices continue to churn higher, with the DTN National Corn Index (an average of cash bids across the countryside) rising above $5.50 per bushel this week. The CME Feeder Cattle Index for March 31: up $0.44 at $140.35.

LEAN HOGS:

A rollicking weekly export-sales report Thursday showed why pork cutout prices have been able to explore such lofty prices in recent weeks. Almost half of the 61,000 metric tons (a marketing year high) of pork sales listed in the report are bound for China, so it's still the same story underpinning the upward trend in U.S. prices. After hitting a fresh contract high of $101.975, the April lean hog futures contract closed Thursday up $0.725 at $101.775. The May contract closed up $1.325 at $102.825, and the June contract closed up $1.025 at $106.325. Pork cutouts total 319.83 with 286.60 loads of pork cuts and 33.23 loads of trim. Pork cutout values: down $0.11, $108.86. Thursday's slaughter was seen at 491,000 head, which is 1,000 head more than a week ago and 3,000 head more than a year ago. The CME Lean Hog Index for March 30: up $0.46, $98.50, and the projected lean hog index for March 31: up $0.47, $98.97.

MONDAY'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.




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