There were some anxious people in the cattle market that sold fats for $121 (which is $4.00 higher than a week ago), but hopefully the rest of the market sees the week through and feedlots push even harder as the market has more to offer. The excitement and strong bullish push in the live cattle market helped rally the feeder cattle contracts and allowed for skeptical nearby feeder cattle contracts to close higher too. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.27 with a weighted average of $97.81 on 10,347 head. May corn is up 1 cent per bushel and May soybean meal is up $0.10. The Dow Jones Industrial Average is down 96.95 points and NASDAQ is down 7.21 points.
You can honestly feel the momentum building in the cattle market! The futures market closed higher Tuesday afternoon and was successfully accompanied by a higher close in boxed beef prices too. April live cattle closed $1.35 higher at $122.72, June live cattle closed $0.20 higher at $124.62 and August live cattle closed $0.12 higher at $123.42. It was disappointing to see some cattle trade Tuesday afternoon in Kansas. Sure, the market was able to jump $4.00 higher and trade at $121, but the bigger question is if packers are willing to offer $121 today (Tuesday) what do you think they'll be willing to offer come Thursday? Or even better yet, come Friday? The market stands a chance at making significant leaps and bounds, but the biggest mistake would be short coming the victory by selling the market out to a $4.00 advancement when the market could possibly trade $6.00 to $8.00 higher. Tuesday's slaughter is estimated at 120,000 head, steady with a week ago and 15,000 head more than a year ago. Monday's cattle slaughter was revised to 105,000 head. The Texas Cash Pool had no trade due to lack of competitive bids. Packers offered $118.25, $116.48 $119.20, and $118.12.
Boxed beef prices closed higher: choice up $4.10 ($262.77) and select up $1.44 ($251.30) with a movement of 124 loads (64.72 loads of choice, 18.77 loads of select, 23.93 loads of trim and 16.39 loads of trim).
WEDNESDAY'S CASH CATTLE CALL: HIGHER. Pinpointing exactly how much higher this week's market will trade is touchy. I'm elated to see the market trade above $120 as the market hasn't seen cattle bought for those prices in over a year! If $4.00 higher was accomplished Tuesday afternoon, you know that, by Thursday afternoon/Friday morning, $6.00 to $8.00 higher isn't out of the question and that this market has more to give. The fact remains that packers are seeing their margins expand due to rallying boxed beef prices and their need of cattle is only growing as they plan to ramp up slaughter speeds to keep up with demand and to make up for the shortened holiday week last week.
The feeder cattle contracts kept on rallying throughout the day, feeling fully supported by the weaker trade seen in the corn contracts and by the strength backing the live cattle market. April feeders closed $0.02 higher at $146.47, May feeders closed steady at $151.77 and August feeders closed $0.80 higher at $160.95. So long as the momentum can continue to support a rallying cash cattle market and corn prices continue to trade steady to lower, the feeder cattle contracts have a chance continuing their upward quest. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to a week ago, feeder steers sold $2.00 to $4.00 higher and feeder heifers sold steady to $3.00 higher. Steer calves traded steady and heifer calves traded $3.00 to $8.00 stronger. The CME Feeder Cattle Index for April 5: down $0.10, $139.70.
The lean hog market rounded out Tuesday's trade with mostly positive signals. The board closed mostly higher, pork cutouts closed modestly higher, and even though the cash market was down slightly, it was still on 10,347 head, which is noteworthy. April lean hogs closed $0.30 lower at $102.10, June lean hogs closed $0.0.2 higher at $105.62 and July lean hogs closed $0.37 higher at $104.60. The next big thing the market will anxiously look for is Thursday's export report. Last week's report shared a marketing year high for the market where 61,000 metric tons were sold. Pork cutouts totaled 414.14 loads with 374.77 loads of pork cuts and 39.38 loads of trim. Pork cutout value: up $0.10 at $109.39. Tuesday's slaughter is estimated at 492,000 head, 2,000 head more than a week ago and 9,000 head more than a year ago. Monday's hog slaughter was revised to 325,000 head. The CME Lean Hog Index for April 2: up $0.72, $100.10.
WEDNESDAY'S CASH HOG CALL: Steady to somewhat higher. Coming back to the market after the Easter holiday, packers could be looking to restock coolers as cold storage supplies are low and demand is pulling pork from the retail market like crazy. This could help push cash prices slightly higher.