GENERAL COMMENTS
It was a wild day for the cattle contracts as some feeder cattle and live cattle contracts both reached new contract highs. The lean hog market neglected to find the support necessary to turn its market around. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.13 with a weighted average of $77.91 on 3,957 head. May corn is down 2 3/4 cents per bushel and May soybean meal is up $12.10. The Dow Jones Industrial Average is up 45.29 points.
LIVE CATTLE:
It was another prosperous day for the live cattle complex as traders took the momentum from last week's cash market and applied it to Monday's trade. The live cattle contracts again closed higher, and the spot April contract carved out yet another new contract high. April live cattle closed $0.67 higher at $166.10, June live cattle closed $0.32 higher at $161.00 and August live cattle closed $0.57 higher at $160.47. Cash cattle prices will likely be higher again this week as feedlot managers know and understand that packers will need cattle in order to avoid becoming short bought. Monday's slaughter is estimated at 125,000 head, 1,000 head more than a week ago and 3,000 head more than a year ago. New showlists appear to be mixed, his week, higher in Texas and Nebraska/Colorado.
Last week's negotiated cash cattle trade totaled 90,533 head. Of that, 77% (69,296 head) were committed for the nearby delivery, while the remaining 23% (21,237 head) were committee for the deferred delivery.
Boxed beef prices closed mixed: choice up $0.88 ($290.20) and select down $0.39 ($276.47) with a movement of 94 loads (52.99 loads of choice, 14.15 loads of select, 18.13 loads of trim and 8.45 loads of ground beef).
TUESDAY'S CATTLE CALL: Higher. Cash cattle trade will be higher again this week as feedlots won't likely settle on anything else.
FEEDER CATTLE:
The feeder cattle contracts soared higher right from Monday's get-go and closed with the same energetic spirit. Feeder cattle traders saw the near perfect combination of weaker corn prices amid higher cash cattle prices and didn't look back to hesitate. Thankfully, the market's bold technical move was then complimented by strong fundamental interest as buyers continue to aggressively buy both calves and feeders in sales throughout the countryside. March feeders closed $2.07 higher at $192.07, April feeders closed $2.57 higher at $198.60 and May feeders closed $2.30 higher at $203.25. The spot April contracts close of $198.60 is a new contract high! At Joplin Regional Stockyards in Carthage, Missouri, at their midsession point on a run of 9,000 head, compared to last week, feeder steers over 500 pounds were trading $4.00 to $8.00 higher, and feeder heifers were trading $3.00 to $7.00 stronger. Feeder cattle supply over 600 pounds was 39%. The CME Feeder Cattle Index for March 3: up $1.78, $187.21.
LEAN HOGS:
The lean hog contracts closed mostly lower, although a few of the deferred contracts did find mild support ahead of the day's end. What the lean hog market lacks right now more than anything is a clear picture of its demand outlook. We know and understand that by the third quarter supplies should tighten and that demand is expected to be greater, but the time between now and then remains questionable in its demand understanding. On Wednesday, the market will receive the latest WASDE report which could give the market more clarity on what its demand outlook really is. April lean hogs closed $1.07 lower at $83.47, June lean hogs closed steady at $100.62 and July lean hogs closed $0.12 higher at $102.97. Pork cutouts totaled 264.42 loads with 231.29 loads of pork cuts and 33.13 loads of trim. Pork cutout values: up $1.76, $87.33. Monday's slaughter is estimated at 469,000 head, 13,000 head less than a week ago and 3,000 head more than a year ago. Friday's hog slaughter was revised to 467,000 head. The CME Lean Hog Index for March 2: up $0.06, $78.71.
TUESDAY'S HOG CALL: Higher. Given that pork cutout values closed higher Monday afternoon packers could show the cash market a little more interest by Tuesday.
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