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Thursday, April 1, 2021

Thursday Midday Livestock Market Summary - Both Hogs, Cattle Play With Fresh Contract Highs


On Thursday, feeder cattle are recovering from their Wednesday stumble, when they were pushed lower by a huge surge in feed prices. Higher prices across the board for most livestock contracts in the middle of Thursday's trading session mean lean hog futures are exploring fresh contract highs, again. Even some of the deferred live cattle contracts are testing fresh contract highs. May corn is down 4 1/2 cents per bushel and May soybean meal is down $7.60 per ton. The Dow Jones Industrial Average is up 161 points and NASDAQ is up 201 points.


Futures trading volume for live cattle and other livestock contracts has been surprisingly light so far during the Thursday session, although perhaps everybody got it out of their system Wednesday when USDA released bullish (for feed prices) quarterly Grain Stocks numbers and annual Prospective Plantings numbers. The April live cattle contract is down $0.675 at $120.30; but the June contract is up $0.075 at $122.975 and other summer and fall contracts have similarly tiptoed higher Thursday morning, just into fresh contract highs. The export sales report showed relatively stable business this week, with net sales of beef reported at 18,700 metric tons (mt), mostly headed to Japan (6,000 mt), China (5,900 mt), and South Korea (2,600 mt).

Boxed beef prices are drastically higher: choice up $2.51 ($249.63) and select up $6.60 ($244.73) with a movement of 72 total loads (32.65 loads of choice, 9.63 loads of select, 17.86 loads of trim and 11.96 loads of ground beef).


Feeder cattle futures are clawing back some of Wednesday's steep losses, with the April contract up $0.025 at 143.90, the May contract up $0.15 at $149.55, and the August contract up $0.825 at $158.10. Elevated feed prices have been a known feature of the cattle feeding business in 2021 for several months already, so perhaps Wednesday's boost to corn prices wasn't such a surprise. Thursday's Drought Monitor update showed improvements in the Midwest, but cattle country in the High Plains continued to see an expansion of extreme drought, and the West continues to be covered by exceptional conditions.


Lean hog futures are experimenting with fresh contract highs Thursday and trading volume continues to pick up through the morning before the markets close for the long weekend (no trade on Good Friday, April 2). The April lean hog futures contract is up $0.675 at $101.725, the May contract is up $1.05 at $102.55, and the June contract is up $1.15 at $106.45. A pullback in the U.S. Dollar Index Thursday may be lifting the outlook for U.S. pork and hog price tags. The weekly export sales report showed a very impressive burst of business between March 19-25: net pork sales of 61,000 mt, with almost half of that headed to China (29,700 mt). The overall weekly figure is a marketing-year high, up 58% from the previous week and up 43% from the prior 4-week average.

The projected CME Lean Hog index for 3/31/2021 is up $0.47 at $98.97, and the actual index for 3/30/2021 was up $0.46 at $98.50. Pork cutouts Thursday morning total 188.79 loads with 161.98 loads of pork cuts and 26.81 loads of trim. Pork cutout values: up $2.27, $111.24.

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