GENERAL COMMENTS:
The livestock complex is seeing live cattle and lean hog contracts trade higher into Monday's noon hour, while the feeder cattle market ventures lower because of slightly higher corn prices. The feeder cattle contracts will likely trade higher later in the week if cash cattle prices again move higher and if the corn complex doesn't advance wildly. March corn is up 5 cents per bushel and March soybean meal is up $6.00. The Dow Jones Industrial Average is up 309.68 points.
LIVE CATTLE:
The live cattle market saw many of its nearby contracts move to new contract highs Monday morning and even though the market has since regressed some, it's still trading higher into Monday afternoon. April live cattle are up $0.90 at $165.85, June live cattle are up $0.40 at $160.15 and August live cattle are up $0.47 at $159.17. It's incredibly supportive to see boxed beef prices higher again as this simply isn't a time in which the market expects to see as strong of beef demand as we are. Nevertheless, the market's incredible support is undoubtedly comforting traders and helping the contracts advance. Cash cattle prices are expected to be higher again this week as supplies are thin, but given that packers bought 108,000 head last week, they may not be up as aggressively as they have been in recent weeks.
Last week's trade developed late in the week again as feedlots were pressuring packers and wanted to get more money. Northern dressed cattle traded for $245 to $256, but mostly at $254, which is $4.00 higher than the previous week's weighted average. Southern live cattle deals traded on Friday at a range of $159 to $161, but mostly at $160 to $161 which is $1.50 to $2.50 higher than the previous week.
Last week's negotiated cash cattle trade totaled 108,421 head. Of that 75% (81,474 head) were committed for nearby delivery while the remaining 25% (26,947 head) were committed for deferred delivery.
Boxed beef prices are higher: choice up $0.64 ($270.30) and select up $1.90 ($256.19) with a movement of 54 loads (32.16 loads of choice, 4.41 loads of select, zero loads of trim and 17.62 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts are lower as the market notes the modest rally in corn prices heading into Monday's noon hour. March feeders are down $0.80 at $185.60, April feeders are down $0.52 at $190.15 and May feeders are down $0.20 at $194.35. It is encouraging that the live cattle contracts are trading higher, and it is assumed that cash prices will again trade higher this week -- both of which are strong factors that could encourage the feeder cattle complex to trade higher if the pressure from the corn market subsides.
LEAN HOGS:
The lean hog complex has run aggressively all throughout Monday's trade as traders are noting the support seen in early pork cutout prices and hope it's a trend that continues throughout the rest of the week. We know pork demand is supposed to increase during the third quarter as supplies tighten, but even throughout last week's trade better demand was seen. February lean hogs are down $0.07 at $75.80, April lean hogs are down $1.17 at $84.50 and June lean hogs are down $1.70 at $103.35. With pork cutout values higher at Monday's midday point, it makes one wonder if packers will begin buying in the cash market earlier too.
The projected CME Lean Hog Index for 2/10/2023 is up $0.63 at $74.64, and the actual index for 2/9/2023 is up $0.21 at $74.01. Hog prices are lower on the Daily Direct Morning Hog Report, down $2.07 with a weighted average of $74.05, ranging from $67.00 to $77.00 on 3,322 head. Pork cutouts total 130.07 loads with 110.18 loads of pork cuts and 19.89 loads of trim. Pork cutout values: up $2.02, $83.07.
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