GENERAL COMMENTS
Traders weren't overly aggressive through Wednesday's market as they wanted to see how pork demand fared through closing, and desperately want to see what the cash cattle market accomplishes this week. Because the markets were closed on Monday, this week's export report won't be shared until Friday. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.32 with a weighted average of $77.80 on 5,033 head. March corn is down 6 1/2 cents per bushel and May soybean meal is down $4.10. The Dow Jones Industrial Average is down 173.76 points.
LIVE CATTLE:
The live cattle complex closed mixed but a vast majority of the contracts closed higher. The spot April contract closed a mere $0.02 lower ahead of the day's end as traders seemed to stall out ahead of closing, as they want to see how cash cattle prices fare this week. There was a thin test that developed late Tuesday afternoon in Nebraska, where cattle sold live for $160 to $161 (which is steady to $1.00 higher than the previous week's weighted average) and in Iowa cattle traded for $164, which is $3.00 higher than the previous week's weighted average. Beside that small volume, which accumulated late Tuesday afternoon, the market has yet to see any more cattle trade. Currently bids of $162 live and $259 dressed are being offered in Nebraska but otherwise the market is quiet and no more cattle have traded. On Friday, the newest Cattle on Feed report will be released, which could be another strong driver of the live cattle/cash cattle market as on feed numbers and placements are expected to be lower with extremely aggressive marketings. It wouldn't be surprising to see trade hold off until that report is shared as feedlots want to drive prices higher. April live cattle closed $0.02 lower at $165.07, June live cattle closed $0.22 higher at $161.10 and August live cattle closed $0.22 higher at $159.90.
Wednesday's slaughter is estimated at 126,000 head, 1,000 head more than a week and year ago.
Boxed beef prices closed higher: choice up $0.71 ($287.91) and select up $2.80 ($273.64) with a movement of 97 loads (60.13 loads of choice, 13.07 loads of select, 14.06 loads of trim and 9.68 loads of ground beef).
THURSDAY'S CATTLE CALL: $2.00 to $3.00 higher. With beef demand showing no sign of weakening, prices will be higher again this week.
FEEDER CATTLE:
The feeder cattle complex closed higher as the market rallied on the corn complex's weakness and on the hope that cash cattle prices will trade higher. March feeders closed $1.10 higher at $187.97, April feeders closed $0.95 higher at $191.75 and May feeders closed $0.75 higher at $195.62. Friday's Cattle on Feed report is expected to unveil lighter on feed numbers and fewer placements than a year ago. If that is indeed the case (which it should be) the feeder cattle market will likely be able to trade higher early next week as the cattle market's strong fundamentals continue to drive prices higher. At Ozarks Regional Stockyards in West Plains, Missouri, compared to last week, feeder steers and heifers traded steady to $3.00 higher. Steer and heifer calves traded $3.00 to $7.00 higher. Feeder cattle supply over 600 pounds was 50%. The CME Feeder Cattle Index for Feb. 21: up $0.01, $182.60.
LEAN HOGS:
The lean hog complex struggled to gain footing in Wednesday's market as traders were leery of advancing the contracts any more after Tuesday's aggressive run, and as they needed to see how pork demand fared through the afternoon. Pork cutouts did indeed close higher Wednesday afternoon which came with the loin gaining $1.57 and the butt gaining $1.45. April lean hogs closed $2.55 lower at $86.55, June lean hogs closed $1.47 lower at $103.80 and July lean hogs closed $1.15 lower at $106.00. Pork cutouts totaled 234.37 loads with 209.99 loads of pork cuts and 24.39 loads of trim. Pork cutout values: up $0.04, $83.05. Wednesday's slaughter is estimated at 428,000 head, 55,000 head more than a week ago and 46,000 head more than a year ago. The CME Lean Hog Index for Feb. 20: up $0.35, $76.76
THURSDAY'S HOG CALL: Lower. Given that packers bought aggressively in Tuesday's market, and then turned around showed very little interest in Wednesday's market, it likely means that they're done buying for the week.
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