GENERAL COMMENTS:
The livestock complex is off to a brisk start to the new week as all three of the livestock markets are trading higher. So long as fundamental support again comes to fruition in this week's marketplace, the live cattle and feeder cattle contracts should have no issue keeping with this upward trend. May corn is up 4 at $6.703 and May soybean meal is up $5.10 at $464.8. The Dow Jones Industrial Average is down 6.03 at 33,880.44.
LIVE CATTLE:
The live cattle complex is back to rallying after closing lower last Thursday and Friday. Traders seem willing to look to the market's strong fundamentals for support early this week and, thankfully, once again boxed beef prices are off to an aggressive start this week. It is a little frustrating to see that 25% of last week's cash cattle trade was committed to the deferred delivery option as that slowly allows packers to build inventory and later suppress cash cattle prices. With supplies as thin as they are right now, the best market scenario for feedlots would be if all cattle would have been sold to the nearby delivery as that keeps showlists extremely current and allows for the cash market to continue to trade higher in the weeks ahead. Cash cattle prices are expected to be steady to somewhat higher again this week as phenomenal beef demand keeps packers engaged in the marketplace. April live cattle are $0.28 higher at $175.025, June live cattle are $0.48 higher at $164.2, August live cattle are $0.48 higher at $163.175.
Last week, Northern dressed deals ranged from $283 to $290, but mostly at $290, which is $11.00 higher than the previous week's weighted average. Southern live cattle traded for $170 to $180, but mostly at $175, which is $5.00 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 86,778 head. Of that, 75% (64,996 head) were committed to the nearby delivery, while the remaining 25% (21,782 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $2.98 ($305.60) and select up $5.54 ($289.41) with a movement of 59 loads (30.68 loads of choice, 7.06 loads of select, 7.92 loads of trim and 13.78 loads of ground beef).
FEEDER CATTLE:
Even with corn prices rallying up to $0.04 higher in the nearby contracts, the feeder cattle market remains confident heading into Monday's noon hour with the live cattle market's support. I was surprised to see traders' eagerness Monday morning, to the point where they gapped the April contract higher. But as the CME Feeder Cattle Index continues to print above $200/cwt, traders felt confident in running the contract early this morning with ample fundamental support encouraging them to do so. April feeders are $1.75 higher at $205.15, May feeders are $1.75 higher at $209.65 and August feeders are $0.65 higher at $224.6.
LEAN HOGS:
Could have last Thursday's lower end found a new bottom in the lean hog market? As the lean hog contracts continue to rally into the new week, it's seeming as though the support plane established last Thursday is holding up and continues to encourage traders to mildly work the hog contracts higher. Not much as changed for the market fundamentally, as ample hog supplies continue to battle sluggish demand market, but that's not seeming to affect traders Monday morning. June lean hogs are up $1.52 at $88.40, July lean hogs are up $1.00 at $90.65 and August lean hogs are up $0.80 at $91.32.
The projected lean hog index for April 14 is down $0.11 at $71.52 and the actual index for April 13 is down $0.32 at $71.63. Hog prices are unavailable on the Daily Direct Morning Hog Report due to packer submission issues. Pork cutouts total 153.08 loads with 127.00 loads of pork cuts and 26.08 loads of trim. Pork cutout values: up $1.23, $79.48.
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