GENERAL COMMENTS:
It was a mixed day for the livestock complex as the feeder cattle market continued to rally but the live cattle and lean hog markets closed lower. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.42 with a weighted average price of $65.21 on 1,161 head. March corn is up 1 1/2 cents per bushel and March soybean meal is up $2.10. The Dow Jones Industrial Average is up 125.69 points.
LIVE CATTLE:
Traders weren't overly ambitious about live cattle contracts throughout Monday's trade as they tried to get their heads wrapped around last week's trade and its market implications. The big kicker Monday was the sharp reduction in slaughter as today's number only totaled 115,000 head as packers try to build up supply and forgo supporting the cash market as they did last week. February is historically a time in which boxed beef demand struggles so it's likely that slaughter speeds could be reduced in the weeks ahead as packers aim to strengthen their margins. February live cattle closed $0.37 lower at $184.25, April live cattle closed $0.80 lower at $185.92 and June live cattle closed $0.45 lower at $183.52. New showlists appear to be mixed, higher in Kansas but lower in Texas and Nebraska/Colorado. Monday's slaughter is estimated at 115,000 head -- 10,000 head less than a week ago and 8,000 head less than a year ago.
Last week, Southern live cattle traded for $182, $4 higher than last week's weighted average. Northern dressed cattle sold for $280 to $290, but mostly at $289, $10 higher than the previous week's weighted average. Last week's negotiated cash cattle trade totaled 83,088 head. Of that, 89% (74,030 head) were committed to the nearby delivery and the remaining 11% (9,058 head) to the deferred delivery.
Boxed beef prices closed higher: Choice up $0.04 ($294.08) and select up $1.94 ($287.02) with a movement of 89 loads (44.08 loads of choice, 7.85 loads of select, 29.38 loads of trim and 7.63 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Given the big gains last week, it's likely this week's market will trade steady at best.
FEEDER CATTLE:
The feeder cattle complex had another impressive day with all contracts closing higher, but the nearby contracts saw the biggest day-over-day gains. March feeders closed $1.67 higher at $248.82, April feeders $1.40 higher at $253.17 and May feeders $1.17 higher at $256.85. The power of last week's strong fat cattle trade helped propel the feeder cattle contracts higher. With countryside demand continuing to be as strong as it is, feeders have all the support they could ever hope for right now in the marketplace. At Joplin Regional Stockyards in Carthage, Missouri, at its midsession point and compared to last week, feeder steers were selling $2 to $5 higher and feeder heifers were trading $4 to $10 higher. Feeder cattle supply over 600 pounds was 60%. The CME feeder cattle index Feb. 9: up $3.01, $246.06.
LEAN HOGS:
It was another boring day for the lean hog complex as traders looked for support but came up empty-handed and consequently allowed contracts to drift lower. It looks like the spot April contract is finding support at $81, which could be the sideways trading line for the market until better demand surfaces. Pork cutout values were able to close higher as the big $5.23 gain in the ham and the $5.14 gain in the belly helped prop up the carcass price -- but traders want to see consistency and stable support, not just one day's higher close.
April lean hogs closed $0.02 lower at $81.12, June lean hogs closed $0.12 lower at $94.87 and July lean hogs closed $0.42 lower at $96.15. Pork cutouts totaled 223.74 loads with 188.87 loads of pork cuts and 34.87 loads of trim. Pork cutout values: Up $2.57, $88.54. Monday's slaughter is estimated at 491,000 head -- 4,000 head more than a week ago and 10,000 head more than a year ago. The CME lean hog index Feb. 8: Down $0.40, $73.60.
TUESDAY'S HOG CALL: Lower. Packers have shown the cash hog market very little interest lately and that's not likely to change overnight.
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