GENERAL COMMENTS:
The livestock complex is rallying into Monday's afternoon as traders set out to accomplish much in the first full week of trade for 2023. The feeder cattle and live cattle markets are expected to continue to trade higher as the market is undeniably strong fundamentally. March corn is down 3/4 cent per bushel and March soybean meal is down $7.30. The Dow Jones Industrial Average is up 207.73 points.
LIVE CATTLE:
It would appear as though the live cattle market has found support in Friday's weaker close as the market is again trading higher. The cash cattle market and boxed beef prices continue to encourage traders to push the complex higher as the fundamental windshield of the market is extremely strong. It will be important to monitor processing speeds this week as it's the first full week of trade since the new year. Hopefully boxed beef prices either maintain these price points or scale somewhat higher and continue to incentivize packers to run fast kill schedules. This will allow feedlots to maintain their current position and consequently push cash cattle prices higher. February live cattle are up $0.80 at $157.57, April live cattle are up $0.87 at $161.55 and June live cattle are up $0.95 at $157.47.
Last week Southern live deals were marked at $157, which is steady with last week's weighted average, and Northern dressed cattle traded for mostly $252, which is $0.50 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 73,664 head. Of that, 77% (56,636 head) were committed to the nearby delivery, while the remaining 23% (17,028 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $2.53 ($285.52) and select up $0.76 ($260.10) with a movement of 60 loads (39.71 loads of choice, 6.84 loads of select, 10.71 loads of trim and 2.55 loads of ground beef).
FEEDER CATTLE:
The feeder cattle complex is again trading higher, and if buyers show up to sales like they did last week, the complex could trend higher throughout the majority of the week. Much of the feeder cattle market's success is tied directly to what corn prices do and how the live cattle/cash cattle market performs. Right now, corn prices are trending mostly steady, and with last week's sharp deterioration, feeders are likely the onset of cheaper corn. January feeders are up $0.90 at $183.60, March feeders are up $0.65 at $186.30 and April feeders are up $0.82 at $190.65. It continues to be interesting to watch the deferred feeder cattle contracts as all the months from August 2023 through the year's end are trading well above $200.00.
LEAN HOGS:
The lean hog market is trading higher into Monday's afternoon as the market may have potentially found support in last week's decline. The biggest fear of the market right now is: where is demand going to come from? As of late, pork demand has been scarce and with pork cutout values seeing a steady decline, packers have been lax in the cash market. This upcoming Thursday the market will see the latest WASDE report released which could give the market more perspective on the demand scenario. February lean hogs are up $0.40 at $80.67, April lean hogs are up $1.17 at $90.82 and June lean hogs are up $1.77 at $106.35.
The projected lean hog index for Jan. 6 is down $0.70 at $76.79, and the actual index for Jan. 5 is down $0.77 at $77.49. Hog prices are lower on the Daily Direct Morning Hog Report, down $0.25 with a weighted average of $73.87, ranging from $71.50 to $75.00 on 3,722 head and a five-day rolling average of $73.83. Pork cutouts total 194.12 loads with 165.00 loads of pork cuts and 29.12 loads of trim. Pork cutout values: up $1.06, $85.06.
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