GENERAL COMMENTS:
Although last Friday's Cattle Inventory report was about as bullish as it could be, the news that broke over the weekend about tariffs being placed on Mexico and Canada along with Mexico cattle imports soon to resume took a toll on the livestock contracts on Monday. March corn is up 6 3/4 cents per bushel and March soybean meal is up $2.60. The Dow Jones Industrial Average is down 122.75 points.
LIVE CATTLE:
The live cattle complex suffered the same stress that the rest of the livestock contracts did as Monday's market was a smorgasbord of incoming chaos. As traders attempted to sort through the weekend's news of tariffs going to be imposed on Mexico and Canada, and Mexico to soon again be importing cattle in the U.S. -- traders had a lot on their plate when the markets opened at Monday's start. February live cattle closed $1.62 lower at $202.97, April live cattle closed $2.15 lower at $200.15 and June live cattle closed $2.22 lower at $194.47. New showlists appear to be mixed, higher in Nebraska/Colorado, somewhat higher in Kansas, but lower in Texas. Monday's slaughter is estimated at 115,000 head -- 1,000 head more than a week ago and 8,000 head less than a year ago.
Last week Southern live cattle traded at mostly $208 which is $6.00 to $7.00 higher than the previous week's weighted average. Northern dressed cattle traded from $325 to $330, but mostly at $330 which is steady with the previous week's weighted average. Last week's negotiated cash cattle trade totaled 58,816 head. Of that, 87% (50,904 head) were committed to the nearby delivery, while the remaining 13% (7,912 head) were committed to the deferred delivery.
Boxed beef prices are higher: choice up $4.31 ($331.99) and select up $2.77 ($319.84) with a movement of 89 loads (48.84 loads of choice, 18.70 loads of select, 6.98 loads of trim and 14.08 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady. Given that packers were able to get the vast majority of last week's cattle committed to the nearby delivery, they'll likely use the board's weakness as leverage and try to get cattle bought for steady money this week.
FEEDER CATTLE:
To say it was a stressful day for the feeder cattle complex is beyond an understatement. And while chatter about tariffs did indeed affect the market, the biggest, unsettling news that seemed to affect the feeder cattle complex was APHIS's announcement over the weekend that Mexican cattle are again going to begin to be imported into the US any day now. What's frustrating about their announcement is that it comes with little detail: they don't say how the backlog of feeders is going to be imported, or when they will exactly begin to cross the board again. Nevertheless, the emotional turmoil sent the feeder cattle contracts spiraling lower even though just last week new all-time highs were scored in the fed cash cattle market yet again. March feeders closed $5.22 lower at $270.50, April feeders closed $5.30 lower at $269.82 and May feeders closed $5.15 lower at $267.97. At Joplin Regional Stockyards in Carthage, Missouri at their midsession point and compared to last week, feeder steers and heifers were selling $5.00 lower to $5.00 higher. Feeder cattle supply over 600 pounds was 65%. The CME feeder cattle index 1/31/2025: not available at this time.
LEAN HOGS:
Although there have already been positive conversations between President Trump and Mexico's President Claudia Sheinbaum Pardo, which have delayed the Mexico import tax going into effect for at least a month, the lean hog complex still dove sharply lower through Monday's close as hog producers are on pins-and-needles given that Mexico is the largest export market for US pork. April lean hogs closed $4.00 lower at $86.35, June lean hogs closed $3.65 lower at $99.35 and July lean hogs closed $3.22 lower at $100.32. It wasn't helpful either that pork cutout values closed slightly lower, as traders need to see strong and stable demand. Hog prices on the Daily Direct Afternoon Hog Report are unavailable because of confidentiality. However, we can see that only 2,179 head traded, and that the market's five-day rolling average now sits at $83.32. Pork cutouts totaled 346.24 loads with 314.19 loads of pork cuts and 32.05 loads of trim. Pork out values: down $0.94, $93.81. Monday's slaughter is estimated at 491,000 head -- 8,000 head more than a week ago and 3,000 head more than a year ago. The CME lean hog index 1/30/2025: up $0.42, $83.06.
TUESDAY'S HOG CALL: Steady/somewhat higher. Packers should show more interest in Tuesday's market given that they weren't overly aggressive on Monday.
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