Lean hog contracts were eager Tuesday and were fully higher in the day’s early hours. But, as time progressed, there’s been more push back than initially felt in the day’s open.
Early Tuesday, lean hog futures were bold and confident about their upward progression. But, as the day steps into Tuesday afternoon, more resistance is building, and the complex is growing a little more skeptical of its higher surge. Cattle futures could be trading mixed, but instead are fully lower with traders unsure of the near future. March corn is up 2 1/2 cents per bushel and March soybean meal is up $4.40. The Dow Jones Industrial Average is down 130.43 points and NASDAQ is down 254.33 points.
Even though we’re already seeing an uptick from last week in slaughter speeds, the live cattle market is pushed lower as uncertainty takes front and center stage. The market loves seeing boxed beef prices higher, but without confirmation as to which direction the cash cattle market will move, traders are leery of supporting the market as there are still too many unknown variables.
April live cattle are down $1.77 at $121.30, June live cattle are down $1.05 at $119.20 and August live cattle are down $0.90 at $117.52. The week’s cash cattle market is at an utter standstill without any bids developed thus far. Some early asking prices in the South have been noted at $116, but the North has yet to place their asking prices. With packers wanting to aggressively push this week’s slaughter to make up for some of the lost ground of last week’s processing, there could be some interest in the cash cattle market. But it won’t come easy nor at the prices desired. For the next couple of weeks packers have ample supplies of committed cattle already spoken for, which mitigates their need to dive into the cash cattle market headfirst.
Boxed beef prices are higher: choice up $0.65 ($240.63) and select up $1.10 ($231.08) with a movement of 72 loads (45.64 loads of choice, 12.66 loads of select, 6.14 loads of trim and 7.63 loads of ground beef).
The corn market is only having a modest rally, seeing a 4-cent rally in the nearby contracts, but the feeder cattle contracts have waved their white flag and are tracking back down to lower prices into Tuesday afternoon. March feeders are down $1.10 at $138.22, April feeders are down $1.02 at $142.25 and May feeders are down $1.37 at $144.70. After seeing Monday’s impressive CME Feeder Cattle Index (which jumped $3.01 higher) the futures market may be feeling pressured. But the demand through the countryside is roaring into the new week. As most sale barns in the Midwest and Southern Plains were closed last week, buyers are coming to market aggressively and looking to fill some orders after having a dark week.
The lean hog contracts ran into Tuesday, ready to take on the day. But as time has progressed, some minor resistance has crept into the complex. April lean hogs are up $0.67 at $85.80, June lean hogs are down $0.07 at $93.00 and July lean hogs are down $0.02 at $93.12. Looking at how far the market has come in the last month is nothing shy of a praiseworthy rally. But as traders look at the charts, some are beginning to wonder how much more upside does the market truly have? Once the market sees a dip in the pork cutout value, the market could grow bearish and begin to scale lower.
The projected CM Lean Hog Index for 2/22/2021 is up $0.42 at $78.16, and the actual index for 2/19/2021 is up $0.31 at $77.74. Hog prices on the National Direct Morning Hog Report are unavailable due to packer submission problems. Pork cutouts total 194.31 loads with 178.93 loads of pork cuts and 15.38 loads of trim. Pork cutout values: up $1.97, $94.08.