Livestock Contracts are Unsupported, Trading Lower
It’s been a depressing Friday for the livestock futures as the market can’t seem to win traders’ interest whatsoever in any of the livestock contracts.
Livestock futures continue to grind lower, showing no interest in trading higher as traders are sidelined, not wanting to support the contracts until more fundamental clarity arises. The cash cattle market is still painfully quiet with just a few bids of $114 offered in Kansas and Texas. May corn is down 4 1/2 cents per bushel and May soybean meal is down $3.10. The Dow Jones Industrial Average is down 137.51 points and NASDAQ is up 214.38 points.
Continuing with the same depressed trade as Thursday, the live cattle futures are still trading lower and the cash cattle market has yet to attract any substantial interest. April live cattle are down $1.27 at $120.40, June live cattle are down $1.00 at $118.47 and August live cattle are down $1.10 at $117.05. Largely, traders are stepping back, not interested in supporting the futures even though this week’s slaughter is expected to be the biggest of the year thus far, and boxed beef prices are higher. Bids of $114 have surfaced in Kansas and Texas but feedlots are bound and determined to get at least $115 to $116 in the South and $185 or more in the North. This week’s trade could be light if business doesn’t pick up before the day’s end.
The Fed Cattle Exchange Auction on Friday listed a total of 790 head (Texas 662 head, Kansas 54 head, Oklahoma 74 head), of which none sold as they did not meet the reserve prices of $115. Opening prices were at $113.50, high bids ranged from $113.50 to $114.50.
Boxed beef prices are higher: choice up $0.85 ($241.24) and select up $0.99 ($229.78) with a movement of 31 loads (21.30 loads of choice, 2.71 loads of select, 4.82 loads of trim and 1.99 loads of ground beef).
Following the last two days of noteworthy growth, feeder cattle futures are now back to trading lower as trader interest has grown null. March feeders are down $1.45 at $138.97, April feeders are down $2.05 at $143.02 and May feeders are down $1.67 at $145.55. Given the questions that still linger around the live cattle market, the feeder cattle contracts are on edge about the short-term. With cost of gains high and the cash cattle market having a hard time drawing any packer interest, the feeder cattle market sits skeptically, waiting to see where the market trends.
The big question on everyone’s mind is has the hog rally seen its peak? Futures are trading lower, but cash prices are still rallying. Wednesday afternoon pork cutouts closed lower, but Thursday afternoon cutouts closed higher yet again! Whatever the market is or isn’t, it’s hard to deny that in the last three days the market hasn’t seen unified support throughout the futures, cash and pork cutout values like it did earlier in the week. Next week’s trade could be pressured as there’s been some pullback late this week. April lean hogs are down $1.37 at $89.92, June lean hogs are down $0.85 at $94.90 and July lean hogs are down $0.77 at $94.70.
The projected CME Lean Hog Index for 2/25/2021 is up $0.75 at $80.70, and the actual index for 2/24/2021 is up $0.82 at $79.95. Hog prices are higher on the National Direct Morning Hog Report, up $2.15 with a weighted average of $77.28, ranging from $70.00 to $82.00 on 4,368 head and a five-day rolling average of $73.32. Pork cutouts total 139.63 loads with 120.98 loads of pork cuts and 18.66 loads of trim. Pork cutout values: down $0.52, $94.61.