GENERAL COMMENTS:
The livestock complex closed mostly lower as the support that was helping push the lean hog complex higher dwindled throughout the day and the cattle complex grew weary of supporting the contracts anymore ahead of seeing what develops in this week's cash market. Asking prices are noted at $200 in the South but otherwise, the market is silent. March corn is down 4 cents per bushel and March soybean meal is down $2.70. The Dow Jones Industrial Average is up 106.84 points.
LIVE CATTLE:
It was a mixed day for the live cattle complex because although the futures contracts closed lower, the market was still able to successfully walk away with some fundamental wins. For starters, it was relieving to see the choice cut close higher after it dipped slightly lower Tuesday afternoon. Although traders may be getting anxious that no cash cattle trade has developed yet, it's positive fundamentally to see feedlot managers confident in their ability to market cattle later in the week as that continues to show that they still possess the majority of the market's leverage and aren't desperate to unload cattle. Asking prices are noted in the South at $200, but otherwise not a word was heard from the cash cattle complex throughout the day. February live cattle closed $1.87 lower at $193.70, April live cattle closed $2.25 lower at $195.52 and June live cattle closed $2.30 lower at $190.47.
Wednesday's slaughter is estimated at 122,000 head -- incomparable to last week but 7,000 head more than a year ago.
Boxed beef prices closed higher: choice up $2.82 ($328.61) and select up $1.46 ($306.89) with a movement of 181 loads (120.55 loads of choice, 26.51 loads of select, 14.87 loads of trim and 19.38 loads of ground beef).
THURSDAY'S CATTLE CALL: Higher. I believe trade will be higher again this week as packers are still short bought – but in rallying bull markets like this, the hardest part is pinpointing how much higher prices will be. And how refreshing it is to see true price discovery again in the fed cattle market.
FEEDER CATTLE:
The feeder cattle contracts were not going to be risking it all while the live cattle contracts traded lower throughout the day. Upon seeing the retreat in the live cattle complex, the feeder cattle contracts followed suit as traders weren't willing to risk much at all at these historically high prices. But once again, please note how there is a stark difference between today's close on the CME versus the attitude, moral and sheer prices being seen in the countryside. Traders may have been skeptical about advancing the board without the support of the live cattle contracts, but buyers in the countryside aren't holding back. At Winter Livestock Auction in La Junta, Colorado compared to their last sale feeder steers traded $8.00 to $12.00 higher across all weight classes. Feeder heifers sold $6.00 to $11.00 higher across all weighted classes. Feeder cattle supply over 600 pounds was 48%. The CME feeder cattle index 1/7/2025: up $0.57, $272.86.
LEAN HOGS:
So much for the lean hog market's momentum earlier today! Ahead of today's noon hour, the complex was trading fully higher but as the afternoon played out, time passed and traders' belief that the market should be trading higher ran thin. February lean hogs closed $0.30 higher at $79.47, April lean hogs closed $0.65 lower at $85.07 and June lean hogs closed $0.62 lower at $98.72. But the one positive note about today's hog complex was the higher end again in pork cutout values as the carcass closed $2.13 higher mainly thanks to the $3.48 jump in the ham. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.38 with a weighted average price of $78.51 on 6,087 head. Pork cutouts totaled 418.42 loads with 379.46 loads of pork cuts and 38.95 loads of trim. Pork cutout values: up $2.13, $90.53. Wednesday's slaughter is estimated at 490,000 head -- incomparable to last week but 15,000 head more than a year ago. The CME lean hog index 1/6/2025: down $0.42, $81.59.
THURSDAY'S HOG CALL: Lower. At this point, it's likely that packers have secured the vast majority of their needs this week in the cash complex.
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