GENERAL COMMENTS:
Thus far it's been a favorable day for the cattle contracts as the market welcomes friendly export data and fully expects cash cattle prices are going to trade higher. The same can't be said for the lean hog market as it continues to plunge lower. No cash cattle sales have been reported at this point and bids remain obsolete as well. March corn is down 2 3/4 cents per bushel and March soybean meal is up $0.60. The Dow Jones Industrial Average is down 105.50 points.
Beef net sales of 20,600 metric tons (mt) for 2024 were primarily for South Korea (8,500 mt), China (3,400 mt) and Japan (3,000 mt). Pork net sales of 39,200 mt for 2024 were primarily for China (10,900 mt), Mexico (10,200 mt) and South Korea (6,900 mt).
LIVE CATTLE:
The live cattle complex is sporting another rallying day as the contracts continue to charge upward as traders expect this week's cash cattle market is going to trade higher. February live cattle are up $1.22 at $183.45, April live cattle are up $1.25 at $186.05, and June live cattle are up $1.07 at $183.27. No cash cattle trade has developed yet, and no bids have surfaced. Packer interest should improve throughout the day, although trade could be delayed until Friday.
Thursday's WASDE report was rather encouraging for the cattle and beef markets in 2024. Beef beef production for 2024 was increased by 75 million pounds from a month ago as the second half of the year's slaughter pace is expected to be more aggressive than originally thought. Quarterly steer prices were encouraging as all four quarters of 2024 saw a price increase from January's report. Steer prices in the first quarter of 2024 are now expected to average $176, which is $1.00 higher than a month ago; the second quarter is expected to average $180, which is $3.00 higher than a month ago; third quarter prices are expected to average $180, which is $2.00 higher than month ago; and the fourth quarter of 2024 is expected to average $184, which is $1.00 higher than last month's prediction. Imports for 2024 were raised by 355 million pounds as the reduced cow herd leaves fewer cattle to be marketed from our domestic herd. Oceania is expected to supply more imports. Exports for 2024 remained unchanged from January's data.
Boxed beef prices are mixed: choice down $0.88 ($294.10) and select up $0.48 ($285.90) with a movement of 68 loads (39.26 loads of choice, 12.83 loads of select, 3.47 loads of trim and 12.70 loads of ground beef).
FEEDER CATTLE:
It's a near perfect world Thursday for the feeder cattle complex as the futures see ample support from the live cattle contracts trading higher, feeder cattle demand in the countryside remains incredibly strong, fed cash cattle prices are expected to trade somewhat higher again this week, and corn prices continue to drift lower. March feeders are up $2.62 at $248.10, April feeders are up $2.10 at $253.30 and May feeders are up $1.92 at $257.65. It's likely that the market will close with this type of excitement given that its support is so widespread.
LEAN HOGS:
It's been another tough day thus far for the lean hog complex as the contracts continue to break lower, showing the support that was thought to be built around $81.00 may be no more. February lean hogs are down $0.10 at $73.27, April lean hogs are down $1.02 at $80.07 and June lean hogs are down $1.05 at $94.52. Thursday morning's export report was rather favorable to the hog complex as sales were high and China was an aggressive buyer and the morning's WASDE report was encouraging as well -- but even so, the market continues to trade lower.
Thursday's WASDE report favorable to both the lean hog and pork markets. Pork production in 2024 was reduced by 90 million as processing speeds have been slower than originally expected. Quarterly price projections were favorable for the market as all four quarters of 2024 saw price increases from what was anticipated in January's WASDE report. Now, in 2024 first quarter prices are expected to average $55.00, which is $4.00 higher than a month ago; second quarter prices are expected to average $62.00, which is $2.00 higher than a month ago; third quarter prices are expected to average $66.00, which is $1.00 higher than a month ago; and the fourth quarter in 2024 is expected to average $56.00, which is $1.00 higher than a month ago. Pork imports dropped by 20 million pounds from a month ago, while 2024 pork exports grew by 210 million pounds.
The projected CME Lean Hog Index for 2/7/2024 is down $0.02 at $74.00 and the actual index for 2/6/2024 is up $0.16 at $74.02. Hog prices are lower on the Daily Direct Morning Hog Report, down $1.28 with a weighted average price of $64.60, ranging from $60.00 to $67.50 on 902 head and a five-day rolling average of $64.29. Pork cutouts total 161.23 loads with 144.61 loads of pork cuts and 16.61 loads of trim. Pork cutout values: up $1.57, $85.56.
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