GENERAL COMMENTS:
It's a mixed market environment for the livestock sector as the feeder cattle contracts trade higher but the live cattle and lean hog contracts both venture lower. The market isn't likely to see a lot more support develop until next week as traders step out early for the long weekend. March corn is down 11 1/4 cents per bushel and March soybean meal is down $5.40. The Dow Jones Industrial Average is down 0.12 points and NASDAQ is up 83.12 points.
LIVE CATTLE:
The market's sorry export report really put a damper on the cattle contracts. February live cattle are down $0.30 at $140.42, April live cattle are down $0.15 at $145.17 and June live cattle are down $0.25 at $139.27. But after the exciting week the live cattle contracts have had, it's OK that the market is veering lower ahead of a long holiday weekend. The most impressive factor of the week has been the tenacity of the cash cattle market. Here we sit, Thursday at noon, and still cattle haven't sold in the South. Rumor has it Southern feedlots are willing to roll their cattle over into next week if packers don't up their bids. Throughout the week dressed cattle in the North have traded from $218 to $226, mostly at $220 to $222 which is $3.00 to $5.00 higher than a week ago. If there's one thing I'm incredibly excited for in 2022 it is the regained confidence, regained leverage and regained spirit of feedlots! Asking prices in the South are pinned at $140-plus and, for the cattle left in the North, they are asking $224-plus.
Beef net export sales of 6,300 metric tons (mt) for 2021 were down 48% from the previous week and 55% from the prior four-week average. The three largest buyers were Japan (2,600 mt), South Korea (1,800 mt) and China (1,000 mt).
Boxed beef prices are mixed: choice down $0.65 ($265.06) and select up $0.80 ($257.89) with a movement of 55 loads (30.25 loads of choice, 5.47 loads of select, 11.95 loads of trim and 7.28 loads of ground beef).
FEEDER CATTLE:
The feeder cattle contracts were drifting lower, following in the shadow of the live cattle contracts, but upon seeing the 11-cent regression in the corn market the complex couldn't help itself but to trade higher. January feeders are up $0.70 at $166.57, March feeders are up $0.70 at $168.75 and April feeders are up $0.60 at $171.72. Once trade gets underway next week, it's likely sale barns see tremendous demand as order buyers look at the opportunity in the live cattle market and jump wildly into feeder cattle and calves.
LEAN HOGS:
The lean hog contracts are frolicking into the New Year with an overabundance of support. The complex seems somewhat unengaged and somewhat tired after having rallied aggressively into Wednesday's close. But the fact that Prop 12 will go into play come Monday leaves everyone on edge as the market has much to figure out. This morning's lousy export report only added salt to the wounds. Pork cutout values are doing wild things again, but make sure to check in on the afternoon's pork cutout close before you put a lot of clout in the midday figure. February lean hogs are down $0.90 at $82.92, April lean hogs are down $0.57 at $87.95 and June lean hogs are down $0.37 at $98.67.
Pork net export sales of 3,200 mt for 2021 were down 89% from the previous week and 90% from the prior four-week average. The three largest buyers were Mexico (14,700 mt), Japan (2,500 mt) and Nicaragua (100 mt).
The projected CME Lean Hog Index for 12/29/2021 is down $0.45 at $71.75 and the actual index for 12/28/2021 is up $0.38 at $72.20. Hog prices are not available due to confidentiality reasons, but we do know 5,545 head have traded and the five-day rolling average sits at $60.51. Pork cutouts total 233.43 loads with 219.91 loads of pork cuts and 13.52 loads of trim. Pork cutout values: up $9.25, $93.54.
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