Renewed Support Sparks Higher Trade in Livestock Contracts
Heading into Friday’s afternoon trade the livestock contracts are met with renewed support after a difficult week of immense pressure.
Luckily traders have opted to ease back into the livestock contracts with most willing to invest in the feeder cattle contracts upon slightly weaker nearby corn prices. There’s still a lot of time to pass before the day closes, but if the market can hold is support and head into next week with some modest gains from Friday — hopefully the week will be given an opportunity at least to trade mildly higher amid bearish pressures. March corn is down 2 1/4 cents per bushel and March soybean meal is down $0.40. The Dow Jones Industrial Average is down 125.46 points and NASDAQ is down 79.60 points. Nothing feels better than a little redemption before the week’s close.
The live cattle contracts are soaking up all the market’s interest as the complex trades fully higher into the afternoon. It’s encouraging to see the market’s higher trade, which is complemented by another day of higher boxed beef prices and gaining open interest levels.
Meanwhile the cash market was disappointing this week as live cattle in the South gave up $1.00 to $2.00 and dressed cattle in the North traded roughly $4.00 lower. Friday’s cash cattle market has been extremely quiet without any new bids hitting the table and no rush on feedlots to sell more cattle before the day’s close. February live cattle are $0.50 higher at $112.57, April live cattle are $0.97 higher at $118.20 and June live cattle are $1.17 higher at $116.12.
Boxed beef prices are higher: choice up $0.25 ($213.62) and select up $2.08 ($203.15) with a movement of 81 loads (45.75 loads of choice, 10.34 loads of select, 10.72 loads of trim and 14.32 loads of ground beef).
As the market’s attention rolls from the January feeder cattle contract to the March feeder cattle contract, thankfully in both markets a support plan around $132.50 to $133.25 has developed and the contracts aren’t seeming so pressured that they need to trade below such levels. Renewed support has invigorated the feeder cattle contracts and offered as much as $2.00 gains throughout the entire sector. January feeders are up $2.25 at $134.85, March feeders are up $2.60 at $135.97 and April feeders are up $2.40 at $138.40.
The nearby lean hog contracts are enjoying a modest rally like the cattle contracts while the deferred contracts trade just mildly lower. Still the market’s fundamentals remain split as the cash market continues to trade lower as supplies are ample and packers don’t have to work to find readily available hogs. It’s helpful though that the day’s cutout values are seeing renewed support again and hopefully the day will be able to keep its support through closing. February lean hogs are up $1.37 at $67.70, April lean hogs are up $0.52 at $72.60 and June lean hogs are up $0.15 at $84.47.
The projected lean hog index for 1/14/2021 is down $0.34 at $65.53 and the actual index for 1/13/2021 is up $0.39 at $65.87. Hog prices are lower on the National Direct Morning Hog Report, down $0.95 with a weighted average of $52.75, ranging from $46.00 to $55.00 on 4,650 head and a five-day rolling average of $54.20. Pork cutouts total 240.64 loads with 222.63 loads of pork cuts and 18.01 loads of trim. Pork cutout values: up $2.24, $82.79.