GENERAL COMMENTS
Active futures contracts were higher for live cattle and feeder cattle Friday, supported by broadly higher cash trade in all regions. Hog futures were roughly steady after Thursday afternoon's mostly neutral Hogs and Pigs report.
LIVE CATTLE:
June cattle closed up $1.12 at a new contract high of $162.12 Friday, also a sixth consecutive higher close, and capped a stellar gain of $5.52 on the week. Even before this week's higher cash trade developed, cattle futures traded higher as outside markets calmed down, helped by no fresh news of further banking problems. Thursday's cash trade put the focus back on fundamentals as live cattle traded $3 to $4 higher in the South and around $170 in the North, up $6 from a week ago. Northern dressed trade took place around $270, roughly $5 higher than last week.
USDA estimated Friday's cattle slaughter at 120,000, up 12,000 from a week ago and 5,000 more than expected Friday morning. So far in 2023, total slaughter is down 2.3%, but beef production is down 4.0%, the result of lighter cattle. In addition to active slaughter, boxed beef prices held up well this week, helped by a boost on Friday afternoon. Choice beef ended the week at $282.07, up $2.29 on the week and selects ended at $270.72, up $1.97 on the week. As long as retail beef demand remains active, cattle prices should continue to find bullish support.
MONDAY'S CATTLE CALL: Steady to lower Monday, a cautious start to the week after Friday's bullish surge.
FEEDER CATTLE:
May feeder cattle also traded higher Friday, closing up 80 cents at 205.25, but short of its contract high of $207.02. In the case of feeders, this week's cash trade was also compelling and helped lift prices higher, but an 11-cent jump in May corn, related to a lower-than-expected corn stocks total for March 1, slightly dampened the bullish enthusiasm for feeders.
South Dakota is encountering a winter storm Friday that is expected to move eastward and stress livestock. Another similar storm is expected to cross the northern Plains later next week. Technically speaking, May feeder cattle survived a brief sell-off earlier this month, related to bank failures, but have strong fundamental arguments, supporting the current uptrend. As I've often said, everyone knows more feeder cattle will be needed in the months ahead. The latest CME Feeder Index was up 99 cents at $193.34 for Thursday, March 30.
LEAN HOGS:
June lean hogs ended up 2 cents at $91.62 Friday, a quiet response to Thursday afternoon's mostly neutral report from USDA. The bearish parts of the report revised the Dec. 1 inventory up 1.28 million head and showed hogs above 180 pounds were up 2% from a year ago. In response, April hogs closed down $1.20 Friday at a new contract low of $75.25. National negotiated cash hogs were also hit in Friday afternoon's Daily Direct report, falling to 71.90 cents. The national market formula price fell to 73.24 cents. The slightly bullish part of the report showed May-May farrowing intentions less than expected and down 1% from a year ago. June-August farrowing intentions were even more supportive at down 3% from a year ago. August lean hogs were up 65 cents at $94.42 Friday.
One positive for hog prices lately has been the active slaughter pace. USDA estimated Friday's slaughter at 472,000, however, down from last week's 482,000 and less than the 480,000 estimated Friday morning. So far in 2023, the hog slaughter is up 1.7% from a year ago, and that doesn't seem to be enough to accommodate the hogs available. Pork production is up 1.1% from a year ago. Friday afternoon's carcass value was pegged at $77.28, down $3.77 from last Friday afternoon and pressured Friday by losses in ribs and bellies, evidence of retail sluggishness that we're not seeing in beef. CME's most recent lean hog index was projected down 31 cents at $75.46 for Thursday, March 30, 2023.
MONDAY'S HOG CALL: Steady in June with little help for cash prices expected anytime soon.
No comments:
Post a Comment