GENERAL COMMENTS
It was a mixed day for the futures complex with both the live cattle and feeder cattle markets trading higher while the lean hog complex trailed lower. Come Thursday, the market's focus will be on export data and any developments in the cash cattle arena. Hog prices closed lower on the Daily Direct Afternoon hog report, down $0.80 with a weighted average of $71.58 on 7,830 hogs. May corn closed down 1 cent at $6.528 and May soybean meal closed down $6.80 at $450.6. The Dow Jones Industrial Average is up 80.34 at 33,482.72.
LIVE CATTLE:
It was a promising day for the live cattle complex as the contracts closed higher, boxed beef prices rounded out the day stronger and feedlots passed on bids that were offered well below their asking prices. Last week's cash cattle market was on fire, advancing as much as $5.00 higher in some parts, but that's not to say that the flame is out for this week and that prices can't trade higher yet again. With a market equation that's comprised of thin front-end supplies and hungry customers, prices should in evidently go higher. Throughout the day, bids of $168 were offered in Kansas and Texas, but that's $2.00 below asking price. Early asking prices are noted at $170 in the South and $272-plus in the North. April live cattle closed $0.80 higher at $168.4, June live cattle closed $0.08 higher at $160.30 and August live cattle closed $0.20 higher at $159.975. Wednesday's slaughter is estimated at 123,000 head, 4,000 head less than a week ago and 2,000 head less than a year ago.
Boxed beef prices closed higher: choice up $0.68 ($288.62) and select up $0.21 ($278.16) with a movement of 101.95 loads (74.55 loads of choice, 12.59 loads of select, 3.25 loads of trim and 11.56 loads of ground beef).
THURSDAY'S CATTLE CALL: Higher. Feedlots are after higher prices. How much higher will cattle trade this week compared to last? That's the unknown at this point.
FEEDER CATTLE:
It's quite odd that the feeder cattle complex grew sheepish ahead of closing, given that the live cattle contracts rallied through the day's end and given that corn prices closed merely sideways. But as traders continue to long for support, waiting to see how cash cattle prices fair later this week can seem like a long-drawn out process. April feeders closed $0.13 lower at $197.825, May feeders closed $0.18 lower at $202.1 and August feeders closed $0.28 lower at $219.225. At Winter Livestock Auction in La Junta, Colorado, compared to last week, feeder steers under 700 pounds sold steady to $5.00 higher with a full advance seen on those weighing 600 to 700 pounds, steers over 700 pounds sold steady to $5.00 higher with even larger gains seen on steers weighing above 800 pounds. Feeder heifers weighing 400 to 700 pounds sold $10.00 to $15.00 higher, and heifers over 700 pounds sold $2.00 to $4.00 higher. Slaughter cows sold steady to $2.00 higher and slaughter bulls traded $2.00 higher as well. Feeder cattle supply over 600 pounds was 54%. The CME Feeder Cattle Index for April 3: up $0.27, $193.29.
LEAN HOGS:
The lean hog complex struggled again throughout Wednesday's market and unfortunately traders can't even look to the day's cash prices or pork cutout values for a little fundamental support. Pork cutout values closed mildly lower (down just $0.29) as steady gains over most of the cuts helped outweigh the bearish blow that bellies took as they closed $9.26 lower from Tuesday's end. It's not that surprising, leading up to a long holiday weekend, that packers aren't being wildly aggressive in the cash market given that product cut prices aren't glamourous and that we're coming up on a long holiday weekend, which will affect kill schedules. And not to forget, supplies of hogs are ample right now. Hog producers are hopeful that Thursday's export report will garnish something supportive, but even if it does, it may not be enough to give the market footing in this lower trend. June lean hogs closed $1.20 lower at $88.37, July lean hogs closed $1.32 lower at $91.42 and August lean hogs closed $1.20 lower at $1.20 lower at $92.45. Pork Cutouts totaled 305.12 loads with 265.63 loads of pork cuts and 39.49 loads of trim. Pork cutout values are down $0.29 at $76.56. Wednesday's slaughter is estimated at 477,000 head, steady with last week but 25,000 head more than a year ago. The CME Lean Hog Index for April 3: down $0.52, $74.68.
THURSDAY'S HOG CALL: Steady. At this point, packers have been pretty clear that they're not going to be overly aggressive in the cash market ahead of the long holiday weekend.
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