GENERAL COMMENTS:
It was a mixed day for the livestock complex as cattle contracts closed lower, thanks to pressure from the corn complex and trader hesitancy. Meanwhile, the lean hog contracts saw mixed interest as nearby contracts closed lower but deferred months closed higher. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $1.49 with a weighted average price of $74.16 on 1,978 head. May corn is up 5 1/4 cents per bushel and May soybean meal is up $1.20. The Dow Jones Industrial Average is down 97.35 points.
LIVE CATTLE:
The live cattle complex couldn't rally as the market seemed somewhat exhausted from Friday's big run. The market saw some pressure in its nearby contracts but deferred contracts traded just slightly below steady with Friday's close. It's disappointing to see Monday's slaughter cut to only 116,000 head. As packers try to manage fed cattle supplies, backing supplies up by limiting chain speeds is an effective tactic for them. April live cattle closed $1.77 lower at $186.67, June live cattle closed $1.42 lower at $182.57 and August live cattle closed $0.77 lower at $181.92. New showlists appear to be mixed: higher in Texas but lower in Kansas and Nebraska/Colorado. Monday's slaughter is estimated at 116,000 head -- 6,000 head less than a week ago and 8,000 head less than a year ago.
Last week's negotiated cash cattle trade totaled 71,697 head. Of that, 79% (56,501 head) were committed to nearby delivery and the remaining 21% (15,196 head) were committed to the deferred delivery. Last week, southern live cattle sold for mostly $183, steady with the previous week's weighted average, and northern dressed cattle traded for mostly $290, $2 lower than last week's weighted average.
Boxed beef prices closed mixed: Choice up $1.02 ($306.30) and select down $0.57 ($295.17) with a movement of 77 loads (48.58 loads of choice, 14.33 loads of select, 3.50 loads of trim and 10.26 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Feedlots will likely attempt to price cattle higher this week, but with packers continuing to cut processing speeds, prices will likely remain steady.
FEEDER CATTLE:
With the corn complex closing $0.05 higher, feeder cattle contracts closed $1 to $2 lower as the market lacked support from the live cattle market and felt slightly pressured by the corn sector's move. March feeders closed $1.42 lower at $251.55, April feeders closed $2.25 lower at $255.75 and May feeders closed $2.40 lower at $257.77. Regardless of what the board did, the fundamental demand for feeders and calves remains extremely high as limited supplies continue to drive prices higher. At Oklahoma National Stockyards in Oklahoma City, at its midsession point and compared to last week, feeder steers and heifers were trading $3 to $6 higher and steer and heifer calves were selling $8 to $10 higher. It was noted at the sale that with spring right around the corner, grass calves orders were in top demand. Feeder cattle supply over 600 pounds was 68%. The CME feeder cattle index March 1: Down $0.62, $246.38.
LEAN HOGS:
The lean hog complex closed mixed as the market's nearby contracts suffered but deferred months closed higher. April lean hogs closed $1.80 lower at $86.27, June lean hogs closed $0.07 higher at $102.12 and July lean hogs closed $0.30 higher at $103.30. The nearby contracts seemed currently about corn prices and immediate demand while the deferred months seemed confident that strong export sales will keep the market robust. Pork cutouts totaled 273.54 loads with 243.67 loads of pork cuts and 29.87 loads of trim. Pork cutout values: Down $1.63, $92.82. Monday's slaughter is estimated at 493,000 head -- 1,000 head more than a week ago and 28,000 head more than a year ago. The CME lean hog index Feb. 29: Up $0.11, $80.26.
TUESDAY'S HOG CALL: Steady. Given that packers were active in Monday's cash market, it likely means they'll have to remain active again come Tuesday as they didn't fulfill all their needs.
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