Thursday, February 16, 2023

Thursday Morning Livestock Market Update - Weekly Export Sales to Influence Direction

GENERAL COMMENTS:

Traders are torn between the potential for higher live cattle prices this week due to reduced showlists with trading activity again being pushed until the end of the week and some expectation cash may not be better than steady with last week. Boxed beef has been performing well lately with gains nearly every day. Prices Wednesday were $3.66 higher for choice and $2.83 higher for select. Beef demand continues to remain strong and packers will need cattle to meet that demand. They will try to purchase their needs for this week as well as some for deferred delivery to maintain some bargaining power, which they lacked for a number of weeks. Weekly export sales will influence the market Thursday morning.

Hogs settled back Wednesday but thankfully rebounded from their lows, posting minor losses at the close. The National Direct Afternoon Hog report showed a gain of $1.17 with the potential for further cash gain Thursday as packers may need more to fulfill the amount they need for the week. Hog weights were slightly lower at an average of 285.6 pounds, down 0.3 pounds from last week and three pounds lower than a year ago. Cutout values declined $0.94, which may keep some pressure on futures Thursday Weekly export sales need to be strong or futures could settle back further. Saturday slaughter is estimated at 98,000 head.

BULL SIDE BEAR SIDE
1)

With feedlots holding to the end of the week along with lighter showlists, there is a strong chance of higher cash again.

1)

Packers may not be as aggressive this week as they have some already purchased ahead.

2)

Strong boxed beef prices indicate continued strong consumer demand. Packers will want to fill that demand and will pay up for cattle to do it.

2)

If weekly export sales are lower, that may set the stage for a price retracement.

3)

Hog futures have made a nice rebound from the lows and may move higher on positive cash and if export sales are good.

3)

Pork cutouts have yet to find solid support. This hinders futures from trending higher.

4)

Hog slaughter has been running a little lighter with packers attempting to improve margins and hog numbers potentially tightening.

4)

Market-ready hogs continue to remain available to packers. They bid up when they need to cover needs and pull back the rest of the week.




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