GENERAL COMMENTS:
It was a revitalizing day for the livestock complex as all three livestock markets closed higher and seemed to regain some much-needed footing in this week's market. Hog prices closed $2.51 higher on the Daily Direct Afternoon Report, on 10,661 head and a five-day rolling average of $67.55. No substantial cash cattle trade developed and it's likely that trade holds off until Thursday to really get underway. July corn is down 6 3/4 cents per bushel and July soybean meal is down $7.60. The Dow Jones Industrial Average is down 271.41 points.
LIVE CATTLE:
The live cattle complex was able to keep with its steady, sideways chop through Wednesday's market, although all the contracts did end on a higher note. As the market patiently waits to see what this week's cash cattle trade amounts to, traders are encouraged that largely no cash cattle trade has developed yet and that feedlots are waiting the week out to see what the latter half of the week could bring. Bids of $172 were offered throughout the day in Kansas and dressed bids of $285 were offered in Nebraska. Asking prices are noted at $176 in the South but remain unestablished in the North. Trade will likely develop on Thursday as packers will want to get cattle procured before Friday. June live cattle closed $0.55 higher at $164.57, August live cattle closed $0.45 higher at $163.40 and October live cattle closed $0.45 higher at $167.42. Wednesday's slaughter is estimated at 122,000 head, 3,000 head less than a week ago and 2,000 head less than a year ago.
The Fed Cattle Exchange Auction held Wednesday reported six lots (with all lots in Texas), totaling 1,194 head of cattle. One lot containing 135 head sold at $174.50. Opening prices were at $172, high bids were at $172 to $174.50, reserve prices were $174.50 to $175.
Boxed beef prices closed higher: choice up $1.61 ($309.24) and select up $0.32 ($287.94) with a movement of 97 loads (58.14 loads of choice, 13.62 loads of select, 13.44 loads of trim and 12.26 loads of ground beef).
THURSDAY'S CATTLE CALL: Higher. Given that feedlots have held out this long, it's likely that they're committed to getting higher prices this week.
FEEDER CATTLE:
Wednesday's market was the shot of support that the feeder cattle complex desperately needed to regain its upward momentum. Between the $0.05 to $0.06 regression in corn prices, to the higher tone see in the live cattle contracts, feeders felt confident that there was enough support in the market to justify trading higher once again. I'd also like to note that in numerous sale barn reports, many auction reporters are sharing that they can't accurately test all classes of the market as receipts are becoming thinner and thinner. May feeders closed $0.85 higher at $210.27, August feeders closed $1.45 higher at $230.95 and September feeders closed $1.85 higher at $233.72. At Winter Livestock Auction in Dodge City, Kansas, compared to last week, feeder steers weighing 700 to 900 pounds sold steady to $2.00 higher. Feeder heifers weighing 600 to 950 pounds sold steady to $2.00 higher. Slaughter cows sold steady to $3.00 lower, and slaughter bulls traded $5.00 to $6.00 lower. Feeder cattle supply over 600 pounds was 95%. The CME Feeder Cattle Index for April 25: up $0.05, $201.31.
LEAN HOGS:
It was a smoking hot day for the lean hog complex as not only did the futures contracts explode before closing, but the market also saw strong demand in the cash market. June lean hogs closed $3.22 higher at $90.27, July lean hogs closed $2.67 higher at $92.52 and August lean hogs closed $2.32 higher at $93.35. It was interesting to see packers as aggressive as they were in the cash market given that they like to play the cash market cautiously when pork cutout values are unstable. Over the last couple weeks, packers have been extremely quiet in the cash market, which may have pressured them into supporting this week's market more than usual. Pork cutout values did close slightly lower, but not enough lower today the market closed disappointedly. Pork cutouts totaled 272.83 loads with 236.78 loads of pork cuts and 36.05 loads of trim. Pork cutout values: down $0.04, $78.37. Wednesday's slaughter is estimated at 477,000 head, 1,000 head more than a week ago and steady with a year ago. Tuesday's slaughter was revised to 470,000 head. The CME Lean Hog Index for April 24: up $0.02, $71.18.
THURSDAY'S HOG CALL: Lower. Given that packers have now supported the cash market for two days, it's likely that they've procured the vast majority of the hogs they need and will not support the market as much on Thursday.
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