GENERAL COMMENTS
As time passed by, the day got better and better for the cattle complex and, with just a handful of cash cattle traded in the North, it's likely that Friday's market is eventful for both the live cattle and feeder cattle markets. Hog prices closed lower on the Daily Direct Afternoon, down $0.25 with a weighted average of $77.33 on 9,822 head. March corn is down 7 3/4 cents per bushel and March soybean meal is up $13.60. The Dow Jones Industrial Average is down 249.13 points.
LIVE CATTLE:
Traders searched and scanned the live cattle market for support ahead of the day's final bell, ultimately coming up short just before closing. But as the afternoon traded on past the contract's close, the market's outlook got sweeter and sweeter. For starters, there has been a light trade reported in the North for $254, which is $4.00 higher than last week's weighted average. Secondly, both choice and select cuts closed the day higher on Thursday's afternoon boxed beef report. It's splendid to see cash cattle prices finally trading higher after the long and painful years since 2014-15. Feedlots are wise to the market's environment and don't intend to let this opportunity to run cash cattle prices higher pass them by. February live cattle closed $0.02 higher at $160.82, April live cattle closed $0.07 lower at $163.62 and June live cattle closed $0.25 lower at $159.52.
Thursday's slaughter is estimated at 124,000 head, 1,000 head less than a week and year ago.
Thursday's actual slaughter data for the week ending Jan. 28 shared that steers average 910 pounds, which is 5 pounds less than the previous week and is 18 pounds less than a year ago. For the same week, heifers averaged 830 pounds, which is 6 pounds lighter than the previous week and 24 pounds lighter than a year ago.
Beef net sales of 16,400 mt for 2023 were primarily for South Korea (4,400 mt), Japan (3,500 mt) and Mexico (2,700 mt).
Boxed beef prices closed higher: choice up $2.09 ($269.29) and select up $0.85 ($254.01) with a movement of 103 loads (71.10 loads of choice, 12.49 loads of select, 4.03 loads of trim and 15.53 loads of ground beef). The choice/select spread now sits at $15.28.
FRIDAY'S CATTLE CALL: Higher. The market has proved to us that prices will likely be higher, as Northern cattle have begun to trade for $4.00 higher, but that's not to say that even higher price points can't be achieved.
FEEDER CATTLE:
Thursday's market treated the feeder cattle complex extremely well. For starters, the feeder cattle market loved the onset of corn falling $0.06 to $0.07 cheaper and noting that cash cattle are beginning to trade in the North for $254, which is $4.00 higher is plum glorious. March feeders closed $0.37 higher at $186.82, April feeders closed steady at $190.72 and May feeders closed $0.25 higher at $194.67. So long as the corn complex doesn't post a significant rebound in Friday's market, the feeder cattle contracts should be able to continue their upward run. At Winter Livestock Auction in Pratt, Kansas, compared to last week, there wasn't a large enough test to accurately portray a trend on steers, but feeder heifers weighing 700 to 900 pounds sold $2.00 higher, and heifer calves weighing 400 to 700 pounds sold $5.00 to $8.00 higher. Feeder cattle supply over 600 pounds was 80%. The CME Feeder Cattle Index for Feb. 8: up $0.24, $182.53.
LEAN HOGS:
The lean hog contracts didn't achieve much throughout Thursday's market as the contracts all closed lower, but some wins were had in the fundamental realm. April lean hogs closed $0.75 lower at $83.32, June lean hogs closed $0.35 lower at $101.65 and July lean hogs closed $0.25 lower at $103.87. The futures market's lower attitude largely stemmed from the day's lukewarm export report, but it is worth noting still that China was an active buyer in Thursday's report. Nevertheless, the cash market did close slightly lower, but the day did see almost 10,000 head trade which is significant. It was good to see pork cutout values close higher as demand is steadily supporting the market. The market saw steady support across most of the cuts, but the biggest day or day gains were seen in the belly (up $4.94) and in the rib (up $3.08). Pork cutouts total 318.20 loads with 289.98 loads of pork cuts and 28.23 loads of trim. Pork cutout values: up $1.10, $80.39. Pork net sales of 28,800 mt for 2023 were primarily for Mexico (12,700 mt), South Korea (4,700 mt) and China (3,400 mt). Thursday's slaughter is estimated at 483,000 head, 7,000 head less than a week ago and 9,000 head more than a year ago. The CME Lean Hog Index for Feb. 7: up $0.24, $73.75.
FRIDAY'S HOG CALL: Lower. It's likely that, at this point, packers have bought all the hogs they need.
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