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DTN Midday Livestock Comments 02/11 11:51
Pressure Abounds in the Cattle Contracts
Still no cash cattle trade has developed, but asking prices are noted in the
South at $206.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
The livestock complex is trading mixed into Tuesday's noon hour as the
cattle contracts are trading noticeably lower, all while the nearby lean hog
contracts continue to inch higher. Still no cash cattle trade has developed.
March corn is down 2 3/4 cents per bushel and March soybean meal is down $2.40.
The Dow Jones Industrial Average is up 29.86 points.
LIVE CATTLE:
Monday's higher trend was quickly forgotten about when Tuesday's market
opened up as the live cattle contracts have been pressured from the day's
start. Trying to pinpoint what exactly is driving the market lower remains a
challenging task as pressure is imploding from a number of different angles:
from traders liquidating some positioning through money-managed funds to the
concerns about what could develop with this new strain of bird flu to the
fundamental reality that cash prices could trade lower this week and that
February is typically a hard month for beef demand given that it's a long time
until grilling season. Nevertheless, the support plane that was thought to be
established last Friday (and was upheld and respected through Monday's close)
has been taken out through Tuesday's trade. February live cattle are down $2.37
at $199.50, April live cattle are down $2.35 at $195.77 and June live cattle
are down $2.10 at $191.10. Asking prices are noted in the South at $206 plus,
but are still not established in the North and no cash cattle trade has
developed yet.
Tuesday's WASDE report was supportive to the cattle and beef markets of
2025. Beef production for 2025 was increased by 775 million pounds as carcass
weights remain historically high and just last week APHIS announced that
Mexican cattle imports would resume, which ensures additional supply. All four
quarters of 2025 for projected steer prices also saw an increase as steers in
the first quarter are expected to average $205 (up $11.00 from last month),
second quarter prices are expected to average $200 (up $6.00 from last month),
third quarter prices are expected to average $198 (up $2.00 from last month)
and steers in the fourth quarter of 2025 are expected to average $200 (up $2.00
from last month). 2025 beef imports remained unchanged at 4,770 million pounds,
but beef exports for 2025 were raised by 200 million pounds to 2,795 million
pounds upon continued excellent global demand.
Boxed beef prices are lower: choice down $0.88 ($322.62) and select down
$1.62 ($312.30) with a movement of 84 loads (57.09 loads of choice, 14.38 loads
of select, zero loads of trim and 13.00 loads of trim).
FEEDER CATTLE:
Without the technical support of the live cattle contract's higher trade,
the feeder cattle contracts are also trading lower in a dramatic manner. March
feeders are down $3.47 at $264.65, April feeders are down $3.12 at $264.65 and
May feeders are down $2.92 at $263.40. Unfortunately with the spot March
contract currently trading below the market's 40-day moving average, it's
difficult to tell how far the market will fall. Still, the market's next
support plane is found substantially lower at $255.00.
LEAN HOGS:
The lean hog complex is trading mixed into Tuesday's noon hour as again the
nearby contracts are up against resistance, wanting to take out the long-term
resistance pressure at $92.00 but aren't confident that the market holds enough
gusto to do so. It isn't ideal for traders either that pork cutout values are
slightly lower this morning, but that could easily change by this afternoon.
April lean hogs are up $0.22 at $91.85, June lean hogs are down $0.17 at
$103.80 and July lean hogs are down $0.47 at $104.42.
The projected lean hog index for 2/10/2025 is up $0.44 at $86.19, and the
actual index for 2/7/2025 is up $0.36 at $85.75. Hog prices on the Daily Direct
Afternoon Hog Report average $86.53, ranging from $81.00 to $88.75, on 1,635
head with a five-day rolling average of $85.91. Pork cutouts total 215.36 loads
with 183.29 loads of pork cuts and 32.07 loads of trim. Pork cutout values:
down $0.69, $98.93.
Tuesday's WASDE report was mixed for the hog and pork markets of 2025. Pork
production for 2025 was increased by 20 million pounds thanks to higher carcass
weights. All in all, quarterly price projections for hog prices didn't change
much as only the first quarter of 2025 saw a slight increase as hog prices are
now projected to average $62 (up $1.00 from last month), second quarter prices
remained unchanged at $66, third quarter prices remained unchanged at $70 and
fourth quarter prices remained unchanged at $56. 2025 pork imports were
increased by 30 million pounds, and pork exports fell by 30 million pounds.
**
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13; 10:00-11:00 a.m. Friday, Feb. 14. All times Eastern Standard.
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