GENERAL COMMENTS:
The livestock complex closed mixed as traders were willing to advance the cattle contracts but not the hog complex following Thursday's disappointing export sales report. Still, no cash cattle trade developed. Hog prices closed higher on the Daily Direct Morning Hog Report, up $0.65 with a weighted average price of $89.78 on 3,462 head. May corn is down 3 1/2 cents per bushel and May soybean meal is down $0.70. The Dow Jones Industrial Average is up 22.07 points.
Thursday's export report showed beef net sales of 17,700 metric tons (mt) for 2024 were up 30% from the previous week and 27% from the prior four-week average. The three primary buyers were South Korea (5,400 mt), China (3,600 mt) and Japan (2,800 mt). Pork net sales of 21,800 mt for 2024 -- a marketing year low -- were down 54% from the previous week and 47% from the prior four-week average. The three primary buyers were Mexico (8,500 mt) China (3,000 mt) and Japan (2,900 mt).
LIVE CATTLE:
The live cattle complex had aspirations to trade substantially higher throughout Thursday's trade, but unfortunately, the market lacked enough support. to do so. What was interesting to note was the spot June contract's behavior. The market traded higher and lower throughout the day but closed mostly steady as traders weren't willing to go up against the market's resistance at $175.50, which is close to where the market's 100-day moving average is trading. This will remain key to watch as a close above the moving average will signal bullishness. Unfortunately, throughout Thursday's trade, the market didn't possess enough gusto to accomplish that feat with boxed beef prices trending lower and processing speeds lagging.
June live cattle closed $0.05 higher at $175.37, August live cattle closed $0.75 higher at $173.52 and October live cattle closed $1 higher at $176.72. No cash cattle trade developed throughout the day, although bids were offered in the South at $180 and the North at $290 to $291. Given that packers' bids were far below asking prices ($184 to $185 in the South and $295-plus in the North), feedlots weren't keen on trading cattle too early.
The month's Cattle on Feed report will be released tomorrow afternoon -- total on-feed numbers are expected to be higher with placements and marketings lower. Thursday's slaughter is estimated at 118,000 head -- 6,000 head less than a week ago and 10,000 head less than a year ago.
Boxed beef prices closed lower: choice down $1.01 ($295.80) and select down $1.61 ($289.27) with a movement of 143 loads (108.40 loads of choice, 14.69 loads of select, zero loads of trim and 19.56 loads of ground beef).
FRIDAY'S CATTLE CALL: Steady to somewhat lower. Even though the futures complex wants to trade higher, it's still unlikely that feedlots can get cattle moved higher this week as packers have slowly built supply up around them.
FEEDER CATTLE:
There's an old market saying, "feeders are leaders," and there was a change of roles between live and feeder cattle contracts on Thursday's afternoon. Earlier this week, the feeder cattle complex traded in the live cattle market's shadow -- unwilling to do anything without the go-ahead or support of the live cattle contracts. But during the afternoon, the live cattle market's support grew thinner while support for the feeder cattle market became bolder.
I believe the feeder cattle market's strength stems from the recent moisture across parts of cow-calf country. We can't overlook the continued strong support of feeder cattle sales in the countryside.
May feeders closed $2.27 higher at $242.55, August feeders closed $2.17 higher at $254.30 and September feeders closed $1.92 higher at $255.30. At Torrington Livestock Auction in Torrington, Wyoming, compared to last week, feeder steers and heifers traded $3 to $8 higher. The sale noted that internet bidding on grass-type cattle was especially strong. The start of green grass and good moisture in the area is keeping the market strong. The feeder cattle supply over 600 pounds was 53%. The CME feeder cattle index April 17: up $0.27, $242.63.
LEAN HOGS:
The lean hog complex couldn't shake the disappointing tone the market quickly adopted after seeing today's export report. The market closed with that same doggish tone. June lean hogs closed $0.02 lower at $102.70, July lean hogs closed $0.05 higher at $104.35 and August lean hogs closed $0.30 lower at $101.77. The afternoon carcass price was able to round out the day higher, but that's mostly because of the $19.78 jump in the belly. Pork cutouts totaled 303.71 loads with 285.96 loads of pork cuts and 17.75 loads of trim. Pork cutout values: up $0.41, $99.96. Thursday's slaughter is estimated at 486,000 head -- 2,000 head more than a week ago and 7,000 head more than a year ago. The CME lean hog index April 16: up $0.38, $91.36.
FRIDAY'S HOG CALL: Lower. Given that packers bought somewhat aggressively in today's market, it's likely they pay little to no attention to the cash market come Friday.
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