GENERAL COMMENTS:
It was an exhilarating day for the cattle complex as both the live cattle and feeder cattle markets closed higher. Still, no cash cattle trade developed but Tuesday's sharply higher close could lead to higher prices when cattle do trade. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $4.58 with a weighted average price of $65.45 on 2,244 head. March corn is down 4 cents per bushel and March soybean meal is down $2.30. The Dow Jones Industrial Average is up 141.24 points.
LIVE CATTLE:Traders poured themselves into the market Tuesday as strong cattle market fundamentals continue to highlight a bright future for the market. The cash cattle market hasn't presented any new news and trade is likely delayed until the second half of the week. However, beef demand continues to lend support to the market and could help feedlots keep prices at least steady. February is a tough month for beef demand historically but at this point, prices remain strong.
February live cattle closed $3.27 higher at $183, April live cattle closed $3.72 higher at $186.07 and June live cattle closed $2.65 higher at $183.12. Today's break-out move gave the live cattle complex another shot of energy as everyone was wondering if Monday's weaker end meant that a top had been established for the move. But Tuesday's rally quickly shut down that thought and once again opened up conversation to wonder how much higher prices are going to go. Some early asking prices have been noted in Kansas at $181 to $182, but no cattle have traded. Tuesday's slaughter is estimated at 125,000 head -- 2,000 head less than a week ago but steady from a year ago.
WEDNESDAY'S CATTLE CALL: Higher. Given that the board is showing continued support, it's likely that feedlots will try to push prices higher again this week. It will be a tough match against packers as they're already running slightly slower processing speeds than a week ago, so a battle between the two wills is fully expected again this week.
FEEDER CATTLE:The feeder cattle complex wasn't going to be caught asleep at the wheel. Traders actively traded the live cattle complex combined with cheap corn and strong countryside demand and all helped encourage feeder cattle contracts to close higher too. March feeders closed $3.92 higher at $246.67, April feeders closed $3.45 higher at $251.70 and May feeders closed $3 higher at $256.32.
At Oklahoma National Stockyards in Oklahoma City, feeder steers and steer calves sold steady to $4 higher compared to last week. Feeder heifers traded $5 to $10 higher and heifer calves sold $1 to $5 higher. It was noted that some six and seven weight calves are already being bought for grass. Feeder cattle supply over 600 pounds was 69%. The CME feeder cattle index Feb. 5: Up $0.10, $239.58.
LEAN HOGS:The lean hog market didn't see the same support as the cattle complex as most contracts and pork cutout values closed lower. Packers did, however, pay more attention to the cash market as over 2,000 head sold and prices closed $4.58 higher. February lean hogs closed $0.92 lower at $73.47, April lean hogs closed $0.95 lower at $81.25 and June lean hogs closed $0.85 lower at $95.20. The market needs a shot of support which could come on Thursday in the morning's WASDE report if 2024 sees greater exports. Pork cutouts totaled 360.79 loads with 300.91 loads of pork cuts and 59.88 loads of trim. Pork cutout values: down $1.37, $86.23. Tuesday's slaughter is estimated at 492,000 head -- steady from a week ago and 18,000 head more than a year ago. The CME lean hog index Feb. 2, 2024: Up $0.44, $73.56.
WEDNESDAY'S HOG CALL: Higher. If packers upped the market by $4.58 today, it's likely that they're short-bought and need more hogs.
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