GENERAL COMMENTS:
It's been an eventful morning for the cattle complex as the fed cash cattle market is seeing prices develop substantially higher as dressed cattle have begun to be reported at $315 and Southern cattle are being reported at $197 -- both are new all-time market highs. March corn is down 9 cents per bushel and March soybean meal is down $12.10. The Dow Jones Industrial Average is up 241.83 points.
Friday's export report shared that beef net sales of 1,400 mt for 2024 were up 29% from the previous week but down 71% from the prior 4-week average. The three largest buyers were Japan (1,300 mt), China (400 mt), and Italy (100 mt). Pork net sales of 7,500 mt for 2024 were up 6% from the previous week but down 60% from the prior 4-week average. The three largest buyers were Mexico (8,500 mt), Japan (600 mt) and Dominican Republic (400 mt).
LIVE CATTLE:
As if the rally on Thursday wasn't enough, traders have once again plunged into the live cattle complex, guns-a-blazing, as they've pushed several of the nearby contracts to new contract highs. So what's the driving force behind this newfound momentum, you ask? I believe it's the sober realization that so long as demand remains as plentiful as it was in 2024, the cattle complex (aside from any black swan events) is almost guaranteed to have another fruitful year as supplies are thin. Feedlot managers/cow-calf producers aren't squandering their time to shine as they hold the lion's share of the market's leverage. February live cattle are up $2.10 at $195.70, April live cattle are up $1.40 at $197.45 and June live cattle are up $0.42 at $191.77. And if the board's excitement wasn't enough to put a little pep in your step – the cash cattle market's success this morning surely will as some light traded trade is being reported at $315 which is $8.00 higher than last week's weighted average, and some more Southern live cattle trade has developed now at $197 which is $4.00 to $5.00 higher than last week's weighted average. Depending on where the week's weighted average falls, it's likely that the prices of $197 live and $315 dressed set new records for the fed cash cattle market.
Boxed beef prices are higher: choice up $1.46 ($324.94) and select up $1.83 ($296.06) with a movement of 84 loads (41.26 loads of choice, 12.96 loads of select, 18.34 loads of trim and 11.72 loads of ground beef).
FEEDER CATTLE:
With the help of the live cattle complex trading higher and this week's fed cash cattle market trading higher as well -- the nearby feeder cattle contracts are continuing to rally into Friday's noon hour with ease. January feeders are up $0.87 at $267.33, March feeders are up $0.40 at $266.60 and April feeders are up $0.25 at $266.77. Aside from the January 2025 contract, most of the nearby feeder cattle contracts have scored new contract highs as traders continue to push the market higher thanks to the relentless support of traders and their belief that fundamental support through 2025 should keep the market strong and elevated.
LEAN HOGS:
The lean hog complex isn't seeing the same level of support that the cattle contracts are as its market is trading mostly lower. And while one would usually expect higher pork cutout values to lend some support -- the market is instead trading lower as traders yearn to not only see higher daily prices but also to see consistency which has been nearly unattainable for the market as of late. February lean hogs are up $0.22 at $81.35, April lean hogs are down $0.07 at $86.47 and June lean hogs are down $0.27 at $99.15.
The projected lean hog index for 1/2/2024 is down $0.87 at $83.12, and the actual index for 12/31/2024 is down $0.28 at $83.99. Hog prices on the Daily Direct Morning Hog Report average $79.69, ranging from $77.00 to $81.00 on 4,033 head and a five-day rolling average of $79.65. Pork cutouts total 188.34 loads with 169.64 loads of pork cuts and 18.70 loads of trim. Pork cutout values: up $2.23, $91.55.
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