Monday Closing Livestock Market Update - Cattle Ready to Rally

GENERAL COMMENTS:

Upon seeing a bullish Cattle Inventory report, the cattle contracts closed higher and are excited to see what the market has to offer in the year ahead. The lean hog market closed higher, but cash hog prices closed sharply lower. Hog prices closed lower on the National Direct Afternoon Hog Report, down $6.58 with a weighted average of $68.53 on 3,117 head and a five-day rolling average of $71.99. March corn is down 10 cents per bushel and March soybean meal is up $7.70. The Dow Jones Industrial Average is up 406.39 points and NASDAQ is up 469.31 points.

LIVE CATTLE:

The market performed beautifully throughout Monday's trade for feedlots. Corn prices veered lower, the futures market traded confidently, Monday's slaughter was aggressive at 120,000 head and the Cattle Inventory report shared bullish findings 

There's a chance Monday's slaughter could be revised lower, so before we become too overly confident, we need to wait to see if any revisions are made on Tuesday. But if Monday did indeed process 120,000 head -- feedlots can once again breath as maintaining currentness was vital to their success in this spring's live cattle market rally. It's hard to push prices higher if there's ample supply and, thankfully, by the end of 2021 the market was extremely current. Technically speaking the market sits in a fantastic position to pursue higher prices, but the cash cattle market needs to perform as well. Feedlots will meet pushback from packers this week as they have some cattle committed with time. But if feedlots can present a united front and demand higher prices from both regions (all states) then higher prices aren't completely out of the question. New showlists appear to be mixed, higher in Texas, but lower in Kansas and Nebraska/Colorado. Monday's slaughter is estimated at 120,000 head -- 5,000 head more than a week ago and 4,000 head more than a year ago. February live cattle closed $0.87 higher at $139.57, April live cattle closed $1.42 higher at $144.52 and June live cattle closed $1.07 higher at $139.07.

Last week Southern live deals were marked at $135 to $138, mostly $136 to $137, steady to $1 lower than the prior week's weighted averages. Northern dressed business was marked at $217 to $218, mostly $218, generally steady with the previous week's weighted average basis Nebraska.

Last week's negotiated cash cattle trade totaled 79,756 head. Of that 79% (63,122 head) were committed for the nearby delivery, while the remaining 21% (16,634 head) were committed for the deferred delivery.

Boxed beef prices closed lower: choice down $0.02 ($290.40) and select down $0.14 ($283.27) with a movement of 88 loads (51.33 loads of choice, 17.52 loads of select, 8.43 loads of trim and 10.35 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady to somewhat higher. Packers are going to fight this week's rally as they know higher cash prices are in their future but paying higher cash prices and seeing weakening box prices is a tough pill for them to swallow.

FEEDER CATTLE:

Monday served as a beautiful storm for the feeder cattle market as the Cattle Inventory report shared that there are fewer beef cows in the country and fewer beef heifer replacements and steers as well. Also, let's not forget the corn market even closed lower. All these factors led to a sharply higher close in the feeder cattle market. March feeders closed $3.40 higher at $163.02, April feeders closed $3.15 higher at $168.45 and May feeders closed $2.97 higher at $172.90. The market is likely to see more support than last week as the bullish inventory report will help spur optimism. The storm front that's blowing across the U.S. could wreak havoc on sale barns as moisture deters some producers from bringing their stock to the sales and keeps some buyers from showing up. But given the drought condition much of the U.S. is in, no one is complaining about moisture. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, on a run of 11,500 head at their midsession point, compared to last week, feeder steers were selling unevenly steady, while feeder heifers were trading steady to $3.00 higher. Steer calves were trading unevenly steady, but heifer calves were trading $2.00 to $4.00 higher. The CME Feeder Cattle Index 1/28/2022: down $0.22, $158.44.

LEAN HOGS:

The cash hog market endured an utter beating in Monday's market as the complex fell by a chilling $6.58 and only sold 3,117 hogs. Pork cutout values closed lower as well. But, all-in-all, the futures market held its own and closed mostly higher. February lean hogs closed $0.55 higher at $ $88.47, April lean hogs closed $0.77 higher at $95.70 and June lean hogs closed $0.25 lower at $105.52. With the wide spread in cash hog prices and the swings in pork cutout values, the lean hog market continues to yearn for a stable trajectory. Pork cutouts totaled 352.53 loads with 313.52 loads of pork cuts and 39.01 loads of trim. Pork cutout values: down $1.88, $94.51. Monday's slaughter is estimated at 475,000 head -- 27,000 head more than a week ago and 2,000 head less than a year ago. The CME Lean Hog Index 1/27/2022: up $0.86, $80.61.

TUESDAY'S CASH HOG CALL: Steady. After a huge drop in the cash hog market, it's likely packers are still apprehensive about diving into the hog market after Monday's fallout and simply let the market trade sideways.

Monday Midday Livestock Market Summary - Contracts Rally, Ready for More Positive News

GENERAL COMMENTS:

It's a Monday full of higher prices for the entire livestock complex. The cattle market is rallying on the hope that Monday's Cattle Inventory Report shows a reduction in beef cow numbers and a smaller calf crop. This bodes well for cow-calf producers who have cattle to sell as a tight supply of calves to be marketed should drive prices higher amid such excellent demand. March corn is down 9 cents per bushel and March soybean meal is up $5.60. The Dow Jones Industrial Average is up 135.22 points and NASDAQ is up 315.65 points.

LIVE CATTLE:

The live cattle market has so much to absorb today and throughout this week. Not only will market participants be watching how daily trade transpires, but they'll also be watching for Monday's Cattle Inventory report (specifically the total number of beef cows, and the year's calf crop) along with daily slaughter speeds throughout the entire week. Monday's slaughter is anticipated to be around 117,000 to 118,000 head, with the chance that processing speeds could hit 120,000 head by the week's end. If this happens, then optimism can again flourish as feedlots will work diligently to keep their showlists current. February live cattle are up $1.22 at $139.92, April live cattle are up $1.65 at $144.75 and June live cattle are up $1.50 at $139.50. The live cattle complex is leaning into the new week with optimism as the market expects the Cattle Inventory Report will show a smaller beef cow herd, which should drive prices higher from the grassroot cow calf producers, all the way through the end marketing of fat cattle amid such strong beef demand. The report is expected to show few beef cows, but how many fewer is the big question. The bigger the decrease, the stronger the market's rally could become. New showlists appear to be mixed, higher in Texas, but lower in Kansas and Nebraska/Colorado.

Last week Southern live deals were marked at $135 to $138, mostly $136 to $137 steady to $1 lower than the prior week's weighted averages. Northern dressed business was marked at $217 to $218, mostly $218, generally steady with the previous week's weighted average basis Nebraska.

Last week's negotiated cash cattle trade totaled 79,756 head. Of that 79% (63,122 head) were committed for the nearby delivery, while the remaining 21% (16,634 head) were committed for the deferred delivery.

Boxed beef prices are mixed: choice down $0.04 ($290.38) and select up $1.80 ($285.21) with a movement of 38 loads (20.77 loads of choice, 6.51 loads of select, 7.06 loads of trim and 3.60 loads of ground beef).

FEEDER CATTLE:

The feeder cattle market is anxiously waiting to see how the day's inventory report bodes for this year's calf crop and the market is rallying in anticipation that the report will show fewer calves to be marketed, which should in the end deem higher prices for producers. March feeders are up $3.40 at $163.02, April feeders are up $3.15 at $168.45 and May feeders are up $2.87 at $172.80. While the market is fully fixated on the upcoming report, it's only helping boost the market's morale that corn prices are trending lower as the cost of feeding cattle has gone up significantly.

LEAN HOGS:

The lean hog market is rallying as cash hog prices are higher and pork cutout values are higher as well. February lean hogs are up $0.42 at $88.35, April feeder are up $0.95 at $95.87 and June lean hogs are up $0.40 at $106.17. Largely, the hog market is rallying upon excellent consumer demand. This helps producers grow a positive outlook as supplies of market ready hogs are only going to grow thinner and thinner -- which you can see is helping boost the contracts from May through August 2022 as they all trade above $100.00.

The projected CME Lean Hog Index for 1/28/2022 is up $1.54 at $82.15 and the actual index for 1/27/2022 is up $0.86 at $80.61. Hog prices are higher on the National Direct Morning Hog Report, up $2.17 with a weighted average of $66.69, ranging from $64.00 to $89.00 on 2,575 head and a five-day rolling average of $65.01. Pork cutouts total 194.94 loads with 169.09 loads of pork cuts and 25.85 loads of trim. Pork cutout values: up $3.27, $99.66.

Monday Morning Livestock Market Update - Complex Faces End of the Month Uncertainty

GENERAL COMMENTS:

Trading activity may be subdued Monday due to it being the end of the month, but also as traders are uncertain over cash activity this week. Last week, cash cattle were steady to $1.00 lower. There is not much expectation for anything better than steady cash this week. Increasing feed prices will have feedlots wanting to move cattle. Packers would like to increase slaughter to take advantage of strong profit margins but may not need to increase bids to accomplish the task. They already have some purchased ahead reducing their need to be aggressive. Boxed beef prices increased on Friday with choice up $1.31 and select up $4.31. Monday, the annual cattle inventory report will be released with a decline in the nation's herd expected from a year ago.

Hog futures closed higher in part due to packers bidding more aggressively for hogs on Friday. The National Direct Afternoon report showed cash up $1.29. Packers need hogs with slowly improving chain speeds, good demand and tightening supplies. Weekly export sales showed international demand is alive and well. However, cumulative sales for far this year continue to run behind the level of last year. This is expected to increase as the year progresses and become more closely aligned with last year. Cutouts showed weakness on Friday posting a declined of $1.80. April futures are carrying an unusually strong premium to cash for this time of year as the trade anticipates higher prices.

	BULL SIDE		BEAR SIDE
1)	Slaughter pace is slowly improving, which should keep packers bidding no less than steady cash this week.	1)	Higher feed prices will increase the desire of feedlots to move cattle rather than hold them for higher cash that may not materialize. Cash activity might take place earlier again this week.
2)	Cattle futures closed the chart gaps and continued higher. This may trigger further technical buying.	2)	Cattle futures are bumping up against a downtrend line which may be difficult to penetrate under the current market environment.
3)	Hog futures are correcting some of the overbought technical position of the market. Further weakness that could develop due to end of the month trading, may bring buyers back in more aggressively.	3)	Hog futures still need to correct the overbought technical nature of the market. There remain chart gaps below the market.
4)	Cash has been strong last week as packers needed hogs and aggressively paid up for them. This is expected to continue.	4)	Slaughter levels still have a way to go before being back up to the historical usual. This may leave cash choppy for the near term.

Friday Closing Livestock Market Update - Cattle, Hogs Both Expect Lighter Saturday Kills

GENERAL COMMENTS:

The livestock futures rallied aggressively into Friday's close and ultimately the live cattle, feeder cattle and lean hog contracts all closed higher amid a technical push. Hog prices closed higher on the National Direct Afternoon Hog Report, up $1.29 with a weighted average of $75.11 on 5,377 head. March corn is up 10 3/4 cents per bushel and March soybean meal is up $6.50. The Dow Jones Industrial Average is up 564.69 points and NASDAQ is up 417.79 points.

From Friday to Friday, livestock futures scored the following changes: February live cattle up $0.78, April live cattle up $1.00; March feeder cattle down $3.68, April feeder cattle down $2.82; February lean hogs up $1.72, April lean hogs down $0.03.

LIVE CATTLE:

With Friday's rejuvenated boxed beef prices, the futures market traded higher and, overall, the morale throughout the cattle complex closed on a stronger note. February live cattle closed $0.87 higher at $138.70 April live cattle closed $1.47 higher at $143.10 and June live cattle closed $1.30 higher at $138.00. It was extremely encouraging to see the jump April live cattle made -- not only did the contract manage to close higher but it closed slightly above $143.00. As the market waltzes into February next week, all eyes and ears will be fixated on the cash market and processing speeds. While box prices showed some topping nature this past week, the prices packers are receiving are still extremely lucrative. This will hopefully encourage them to get chain speeds back to full capacity sooner rather than later. Feedlots are crossing their fingers that this is indeed the case, as they want to keep supplies of market-ready cattle in their favor. Throughout the week Southern live deals were marked at $135 to $138, mostly $136 to $137, steady to $1 lower than last week's weighted averages. Northern dressed business was marked at $217 to $218, mostly $218, fully steady with last week's weighted average basis Nebraska.

Friday's slaughter is estimated at 117,000 head -- 3,000 head more than a week ago but 3,000 head less than a year ago. Saturday's slaughter is estimated at 57,000 head -- 4,000 head less than a week ago and 5,000 head less than a year ago. This week's estimated weekly slaughter is pinned at 643,000 head -- 7,000 head more than a week ago and but 20,000 head less than a year ago.

Boxed beef prices closed higher: choice up $1.31 ($290.42) and select up $4.31 ($283.41) with a movement of 77 loads (53.92 loads of choice, 7.65 loads of select, 11.01 loads of trim and 4.30 loads of ground beef). Throughout the week choice cuts averaged $290.97 (up $0.10 from last week) and select cuts averaged $282.07 (up $1.99 from last week). The week's movement of cuts, grinds and trim totaled 567 loads.

MONDAY'S CASH CATTLE CALL: Steady to somewhat higher. While processing speeds aren't completely back to normal, chain speeds have made progress and packers will eventually need cattle. To their advantage is the fact that they have cattle committed with time, which could undermine the cash cattle market next week. But as chain speeds get running, packers will eventually have to get more aggressive in the market again.

FEEDER CATTLE:

Considering the corn market's 10-cent rally in the nearby contracts and the soybeans market's 20- to 21-cent rally in its nearby contracts, one would have thought the feeder cattle complex would have dodged lower before the week's end. But the complex held strong and closed fully higher. March feeders closed $0.12 higher at $159.62, April feeders closed $0.20 higher at $165.30 and May feeders closed $0.60 higher at $169.92. The market rallied as the complex found support after trading lower earlier in the week at the 100-day moving average. Demand throughout the countryside has been weaker for feeders but impressive for calves. At Woodward Livestock Auction in Woodward, Oklahoma, compared to last week on a run of 4,050 head, feeder steers traded $2.00 to $4.00 lower and feeder heifers traded $4.00 to $7.00 weaker. Steer calves traded $5.00 to $10.00 higher and heifer calves traded steady to $4.00 stronger. The CME Feeder Cattle Index 1/27/2022: unavailable at this time.

LEAN HOGS:

The lean hog market grew stronger as Friday's trade played out. By the day's end the market closed fully higher. It's mind-blowing to see the spread in cash hog prices as the market's lowest bid is a measly $63.00 but the market's highest bid jumped to $90.00, as packers who need hogs need them in a BAD way. Supplies of market-ready hogs are expected to grow thinner and thinner and, with the technical support that the market is seeing, the market closed with strong morale. It's disappointing to see that Saturday's kill is anticipated to be lighter than a week ago, but overall speeds are improving (slowly). February lean hogs closed $0.90 higher at $87.92, April lean hogs closed $0.25 higher at $94.92 and June lean hogs closed $0.60 higher at $105.77. Pork cutouts totaled 248.05 loads with 225.17 loads of cuts and 22.88 loads of trim. Pork cutout values: down $1.80, $96.39. Friday's slaughter is estimated at 468,000 head -- 23,000 head more than a week ago and 18,000 head less than a year ago. Saturday's kill is projected to be around 209,000 head -- 9,000 head less than a week ago and 42,000 head less than a year ago. The CME Lean Hog Index 1/26/2022: up $0.55, $79.75.

MONDAY'S CASH HOG CALL: Steady to somewhat higher. With the market slowly increasing processing speeds, it's likely Monday's cash market is strong as packers look to secure supplies.

Friday Midday Livestock Market Summary - Cattle Lean Confidently Into Afternoon While Hogs Retreat

GENERAL COMMENTS:

The lean hog complex has slowed its upward quest as the weekend nears, but the cattle contracts are rallying into Friday afternoon, thrilled to have gained some much-needed support. The feeder cattle contracts could still close lower as the market closely watches the rallying corn and soybean markets. March corn is up 10 3/4 cents per bushel and March soybean meal is up $4.20. The Dow Jones Industrial Average is up 104.62 points and NASDAQ is up 216.00 points.

LIVE CATTLE:

Upon seeing some midday boxed beef prices higher, the live cattle complex stretched its position to trade fully higher and head into Friday afternoon with confidence. Overall, it's been a lukewarm week for the live cattle market. Though processing speeds have improved, they still aren't back to full capacity. Not to mention boxed beef prices trended lower throughout most of the week and the cash cattle market saw very little interest. February live cattle are up $0.92 at $138.75, April live cattle are up $1.37 at $143.00 and June live cattle are up $1.23 at $137.92. While the market balances the supportive and non-supportive factors, it is encouraging to see the April live cattle contract trading well above $140. The cash cattle market hasn't seen any renewed interest and it's likely the week's business is done.

This week Southern live deals have been marked at $135 to $138, mostly $136 to $137, steady to $1 lower than last week's weighted averages. Northern dressed business has been marked at $217 to $218, mostly $218, fully steady with last week's weighted average basis Nebraska. Beef cutouts are expected to be lower with light to moderate box movement.

Boxed beef prices are higher: choice up $1.54 ($290.65) and select up $3.90 ($283.00) with a movement of 55 loads (38.30 loads of choice, 4.55 loads of select, 8.97 loads of trim and 3.55 loads of ground beef).

FEEDER CATTLE:

The feeder cattle contracts are rallying as the market clings to the support that seeped in from the live cattle complex, even though both corn and soybean prices are trading higher. The feeder cattle market nosedived in the nearby contracts to the support level at the 100-day moving average and has traded mostly sideways ever since. The market stands a chance at closing mildly higher by the day's end if the live cattle contracts continue to trade positively. But it likely won't be much better than steady as demand has been touch-and-go throughout the countryside and inputs are back to rallying. March feeders are up $0.55 at $160.05, April feeders are up $0.40 at $165.50 and May feeders are up $0.80 at $170.12.

LEAN HOGS:

After a topsy-turvy week, the lean hog complex is trading lower into Friday afternoon. The lean hog market had a volatile week where cash prices saw huge spreads, pork cutout values continued to jet higher and then close lower the next day, and the futures market ran with vigor early in the week but has now taken a more cautious approach in the second half of the week. February lean hogs are up $0.07 at $87.10, April lean hogs are down $0.20 at $94.47 and June lean hogs are down $0.07 at $105.10. It's likely the day closes lower and the market doesn't find support nor a clear trajectory until next week (hopefully).

The projected CME Lean Hog Index for 1/27/2022 is up $0.86 at $80.61, and the actual index for 1/26/2022 is up $0.55 at $79.75. Hog prices are lower on the National Direct Morning Hog Report, down $4.12 with a weighted average of $64.52, ranging from $63.00 to $77.50 on 2,660 head and a five-day rolling average of $64.15. Pork cutouts total 167.80 loads with 152.69 loads of pork cuts and 15.11 loads of trim. Pork cutout values: down $0.15, $98.04.

Friday Morning Livestock Market Update - Month-End Positioning May Dominate Futures

GENERAL COMMENTS:

With cash business mostly finished for the week, traders had little to go on as far as market news was concerned. Activity Friday and Monday may be more affected by it being the end of the month. June and August live cattle just could not muster sufficient strength to close the chart gaps that are ever so close to being filled. If they are filled, it could result in renewed selling pressure due to steady to $1.00 lower cash this week and continued weakness of boxed beef. Choice cuts were down $0.35 with select down $0.62. Weekly export sales of beef were neutral at 14,300 mt. January feeder cattle are now off the board with March taking over as the lead month, which showed the greatest pressure.

Hog futures eliminated the gains of the week as traders seemed to be more interested in taking some profits before the end of the month rather than anticipate higher cash and tighter supplies. That may be true as time moves forward but may not be the focus Friday and Monday. Cash was strong Thursday with the National Direct Afternoon report up $5.53. Cutouts also performed well gaining $3.59 led by strong ribs, hams and bellies. This should support the market, but it may not until the calendar rolls to February. Export sales were strong at 49,100 mt. China was back in as the second largest buyer just slightly behind Mexico. Saturday slaughter is estimated at 205,000 head.

	BULL SIDE		BEAR SIDE
1)	Chart gaps still need to be closed above the market. This may keep futures from falling lower in the near term.	1)	Weakness of boxed beef does not bode well for cattle prices. Packers will not want to bid higher due to lower profitability.
2)	With the slaughter pace slowly improving, packers may not reduce bids any more than they have. They may need to purchase cattle more aggressively to keep plants running efficiently.	2)	High feed prices will push feedlots to move cattle as quickly as possible rather than feed any longer than necessary. Holding out for higher cash may only result in lower profitability.
3)	Strong cash and higher cutouts should make the current weakness in hog futures temporary.	3)	Hog futures were ripe for a price correction and this correction may continue through the end of the month as it relieves an overbought condition.
4)	There are numerous empty hog barns at the present time with limited ability to fill those barns. Hog supplies are expected to tighten.	4)	Slaughter pace is slowly improving but still has a long way to go to get back to average levels. This may keep sufficient hogs available to packers leaving them less aggressive in the market.

Thursday Closing Livestock Market Update - Lower Trend Blankets Futures

GENERAL COMMENTS:

The livestock complex closed lower Thursday as traders left the marketplace to fend for itself. Hog prices closed higher on the National Direct Afternoon Hog Report, up $5.53 with a weighted average of $73.82 on 5,396 head. March corn is down 1 3/4 cents per bushel and March soybean meal is up $4.20. The Dow Jones Industrial Average is down 7.31 points and NASDAQ is down 189.34 points.

LIVE CATTLE:

Live cattle futures had a less than exciting day as the market closed lower. Cash cattle trade saw no interest and boxed beef prices waned lower again. February live cattle closed $0.22 lower at $137.82, April live cattle closed $0.27 lower at $141.62 and June live cattle closed $0.35 lower at $136.70. While it's somewhat disappointing to see the futures market close lower, given the rally Wednesday, it's relieving to see the complex chop mostly sideways as opposed to giving back all of what Wednesday secured. There could be a little more cash cattle trade before the week's end, but largely its looking like this week's business is done. Asking prices for cattle left on showlists are around $137-plus in the South and $219-plus in the North. So far this week, Southern live deals have been marked at $136 to $138, mostly $136 to $137, steady to $1 lower than last week's weighted averages. Northern dressed transactions have been marked at $218, also fully steady with the prior week, basis Nebraska. Thursday's slaughter is estimated at 118,000 head -- 2,000 head more than a week ago and 3,000 head less than a year ago.

Actual slaughter data for the week ended 1/15/2022: steers averaged 922 pounds (down 6 pounds from the week before) and heifers averaged 851 pounds (steady with the last report).

Beef net export sales of 14,300 metric tons (mt) for 2022 were primarily for South Korea (6,200 mt), Japan (3,900 mt) and Mexico (600 mt).

Boxed beef prices closed lower: choice down $0.35 ($289.11) and select down $0.62 ($279.10) with a movement of 136 loads (94.30 loads of choice, 17.48 loads of select, 7.15 loads of trim and 16.92 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady. Given that cattle have traded in both the North and the South, any trade that develops on Friday will likely be for steady prices with the week's trend.

FEEDER CATTLE:

With boxed beef prices lower, live cattle futures lower and uncertainty regarding what corn prices are going to do, the feeder cattle complex closed lower. March feeders closed $1.30 lower at $159.50, April feeders closed $1.10 lower at $165.10 and May feeders closed $0.80 lower at $169.32. Demand throughout the countryside hasn't been as strong because buyers ran to the market early in 2022 and filled the majority of their orders. Now those who still need to buy are hesitant as the corn market has climbed well past $6.00 per bushel, making feedlot cost of gains drastically higher. At Torrington Livestock Auction in Torrington, Wyoming, compared to last week on a run of 6,392 head steer calves traded steady to $4.00 lower. Heifer calves under 500 pounds traded steady, heifer calves weighing 500 to 600 pounds traded $3.00 to $5.00 higher, and heifer calves over 600 pounds traded $3.00 to $6.00 lower. The CME feeder cattle index 1/26/2022: down $0.45, $159.05.

LEAN HOGS:

Oh, silly us. We thought Wednesday's hog market was mind-boggling. Well, the market all but laughed, handed producers its beer and said, "Watch this." The spread in cash hog prices has now jumped to a $25.00 difference. With the hiccup in production and the back-and-forth jumps in pork cutouts, it's tough telling why some producers are getting $87.00 in the cash market for their hogs, while others are lucky to be getting $62.00. My belief is that as the market goes from juggling slow processing speeds to trying to get somewhat back to normal now that more workers are present, packers are having to bid and scrap over hogs based on their own individual/regional needs as opposed to being more uniform in their bidding. Pork cutout prices did close higher with gains steady throughout most of the cuts. But the futures market closed lower with February lean hogs $1.00 lower at $87.02, April lean hogs $1.77 lower at $94.67 and June lean hogs $1.30 lower at $105.17. Pork cutouts total 253.74 loads with 225.87 loads of pork cuts and 27.87 loads of trim. Pork cutout values: up $3.59, $98.19. Thursday's slaughter is estimated at 475,000 head -- 18,000 head more than a week ago and 18,000 head less than a year ago. The CME Lean Hog Index 1/25/2022: up $0.75, $79.20.

Actual slaughter data for the week ended 1/15/2022: live and dressed carcass weights remained steady. Live weights averaged 294 pounds and for dressed weights hogs averaged 219 pounds.

Pork net sales of 49,100 mt for 2022 were primarily for Mexico (17,300 mt), China (16,900 mt) and Canada (3,000 mt).

FRIDAY'S CASH HOG CALL: Lower. Ahead of the weekend, I tend to believe that packers will be less aggressive in the cash market as Saturday kills can be hit or miss.

Thursday Midday Livestock Market Summary - Futures Chopping Sideways

GENERAL COMMENTS:

Neither the live cattle nor lean hog contracts are overly thrilled with Thursday's export report, even though the report unveiled a lukewarm finding. With the lag in processing speeds, it's hard for either market to get excited about anything for the time being. March corn is down 2 1/2 cents per bushel and March soybean meal is up $2.50. The Dow Jones Industrial Average is up 243.77 points and NASDAQ is down 19.94 points.

LIVE CATTLE:

Live cattle futures are trading without much excitement thus far Thursday, moving mostly sideways. The cash cattle market isn't finding much more interest, despite only selling a small sampling of cattle. February live cattle are down $0.07 at $137.98, April live cattle are down $0.02 at 4141.87 and June live cattle are down $0.15 at $136.90. While this week's market has been hit-or-miss on support from traders, it's important to keep a long-term perspective. The live cattle complex has taken mostly a defensive position as the market hates seeing feedlots lose currentness, hates seeing cash cattle trade lower and despises the fact that processing speeds are lagging. But 99% of the time, fundamentals end up winning the coin toss and in the next couple of months it's going to be undeniably apparent that supplies are sparse. In the meantime, feedlots and cattle enthusiasts are trying to cling to whatever market position they can hold onto before things become favorable once again.

Beef weekly net export sales of 14,300 metric tons (mt) for 2022 were primarily for South Korea (6,200 mt), Japan (3,900 mt) and Mexico (600 mt).

Boxed beef prices are lower: choice down $1.03 ($288.43) and select down $0.38 ($279.34) with a movement of 65 loads (42.98 loads of choice, 9.93 loads of select, 5.19 loads of trim and 6.52 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are not having a rock 'n roll day as the market merely skips sideways, waiting for a strong signal that would either send the market higher or lower. In the meantime, the live cattle complex isn't lending much support as its contracts are trading lower along with a lower boxed beef market. On the corn front, the corn contracts are trending mildly lower, but given that the complex is still trading around $6.25 per bushel, the feeder cattle contracts aren't comfortable with its price point. March feeders are down $0.50 at $160.30, April feeders are down $0.52 at $165.67 and May feeders are down $0.20 at $169.92.

LEAN HOGS:

After rallying aggressively earlier in the week, the lean hog complex is struggling to find any support Thursday. February lean hogs are down $1.12 at $86.90, April lean hogs are down $2.12 at $94.32 and June lean hogs are down $1.60 at $104.87. After such an ambitious rally over the last two weeks, it's not surprising to see the lean hog market stabilizing and catching its breath as the complex looks for added support in its long-term quest. Pork cutout values have pinged higher and lower throughout the week, which hasn't added strong support. And, while the cash market has been mostly supportive, without processing speeds at full capacity, it's hard to get overly excited on the cash front. The market does find some peace in seeing China as a buyer in Thursday's export report.

Pork net export sales of 49,100 mt for 2022 were primarily for Mexico (17,300 mt), China (16,900 mt) and Canada (3,000 mt).

The projected CME Lean Hog Index for 1/26/2022 is up $0.55 at $79.75, and the actual index for 1/25/2022 is up $0.75 at $79.20. Hog prices are higher on the National Direct Morning Hog Report, up $5.83 with a weighted average of $68.64, ranging from $62.00 to $83.00 on 3,578 head and a five-day rolling average of $63.34. Pork cutouts total 130.53 loads with 111.91 loads of pork cuts and 18.63 loads of trim. Pork cutout values: up $6.05, $100.65.

Thursday Morning Livestock Market Update - Cattle Strength May Be Short-Lived

GENERAL COMMENTS:

Live cattle uncovered sufficient buying interest to close the chart gap in some futures contracts but not in all. Feeder cattle showed similar technical buying with nearby contracts unable to close the gaps while later contracts did. Much of what took place Wednesday was technical in nature and not fundamental. After cash business taking place at steady money on Tuesday, some trading took place $1.00 lower Wednesday. We cannot expect anything much different to develop the rest of the week. Not only did cash not support the rally, but boxed beef declined. Choice was down $2.92 with select down $3.60. This does make one feel warm and fuzzy for the rest of the week. Futures may follow through Thursday but likely only to close the chart gaps that remain. Pressure could then resume unless there is support from weekly exports.

It was a little disappointing to see some weakness in hog futures, even though there was a strong possibility of a price correction. Some spread unwinding took place putting pressure on closer months. Cash fell back on the National Direct Afternoon report with a loss of $3.84. Cutouts increased $2.14 helping to offset cash weakness. Traders will see what weekly export sales show before making further decisions for Thursday's trading. The market seems solidly supported even though slaughter pace is not yet back up to par. Saturday slaughter is projected at 205,000 head.

	BULL SIDE		BEAR SIDE
1)	Cattle futures were able to move higher despite steady to weaker cash and cutouts. Further technical buying may develop.	1)	The strength of cattle futures was not supported by cash or boxed beef.
2)	Some contracts have yet to fill chart gaps above the market. This may result in higher futures to begin Thursday.	2)	Mediocre export sales could keep the trend lower as it could affect overall demand.
3)	Selling pressure took place in nearby hog futures, but not until April was able to establish a new contract high.	3)	Hog futures may see a significant correction if weekly export sales are low. More pork would be available to the domestic market.
4)	Prop 12 is on the back burner again, leaving business as usual with strong demand absorbing a lot of pork.	4)	Hog futures are overbought and ripe for a price correction. Lower cash for a few days might trigger heavier selling.

Wednesday Closing Livestock Market Update - Cattle Trade With Confidence, While Hogs Chop Sideways

GENERAL COMMENTS:

It was a technically supportive day for the cattle contracts, but the cash side of the market dipped lower as packers pushed cash prices down $1.00 from Tuesday's trade. After an aggressive week, the lean hog complex is looking for follow-through support, which could come from Thursday's export numbers. Hog prices closed lower on the National Direct Afternoon Hog Report, down $3.84 with a weighted average of $68.29 on 4,631 head. March corn is up 7 cents per bushel and March soybean meal is up $8.50. The Dow Jones Industrial Average is down 129.64 points and NASDAQ is up 2.82 points.

LIVE CATTLE:

While it was refreshing to see stronger trade in the futures, cash trade through the countryside did not improve. February live cattle closed $0.95 higher at $138.05, April live cattle closed $1.80 higher at $141.90 and June live cattle closed $1.62 higher at $137.05. After dancing around the 100-day moving average in both the February and April live cattle contracts, Wednesday's support helped create some distance from the market's moving average and pushed prices higher. The problem with Wednesday's trade is that, with boxed beef prices seasonally topping, cash prices are seeing pushback. Southern live deals were marked at $136 to $138, mostly at $136 to $137, which is steady to $1.00 lower than Tuesday. Northern dressed trade was marked at $218, which is fully steady. Trade volumes for the week remain light, so some more clean-up trade could develop. But with packers having cattle committed with time and running slower chain speeds, they may not need that many. 

Wednesday's slaughter is estimated at 118,000 head -- 3,000 head more than a week ago and 2,000 head less than a year ago.

Boxed beef prices closed lower: choice down $2.92 ($289.46) and select down $3.60 ($279.72) with a movement of 132 loads (88.67 loads of choice, 15.03 loads of select, 5.03 loads of trim and 22.87 loads of ground beef).

THURSDAY'S CASH CATTLE CALL: Steady with the week's trend. Seeing that packers bought cattle and worked the market $1.00 lower Wednesday, it's likely any more buying will be simply steady with the week's trend.

FEEDER CATTLE:

Despite the corn market closing higher, the feeder cattle contracts rallied through Wednesday's close. March feeders closed $0.95 higher at $160.80, April feeders closed $0.92 higher at $166.20 and May feeders closed $0.92 higher at $170.12. Even though the feeder cattle market doesn't like how high corn prices have gotten, the market was encouraged to see the live cattle contracts trading higher and throughput picking up speed. The latter half of the 2022 live cattle market offers a nice premium when compared to today's live cattle market and feeders are looking at this market and continue to be bullish as they believe the market's fundamentals of fewer cattle amid excellent demand will lead prices to higher planes. At Bassett Livestock Auction in Bassett, Nebraska, compared to last week on a run of 4,500 head, steers weighing 550 pounds traded $10.00 higher and steers weighing 650 to 700 pounds traded $2.00 to $4.00 stronger. Heifer offerings weighing 450 to 500 pounds traded $8.00 to $9.00 higher and heifers weighing 550 to 650 pounds traded steady. The CME Feeder Cattle Index 1/25/2022: down $0.27, 159.50.

LEAN HOGS:

If you're one who struggles with restless nights, unable to shut your mind down, DON'T begin to look at the current lean hog market. The market rallied aggressively Tuesday as technical pushed prices higher and upon hearing that Prop 12 won't be enforced until six months after the rules are finalized. But come Wednesday, the complex seemed to cool down and merely catch its breath. The futures market closed mixed, pork cutouts closed higher, and the cash market closed lower -- so all-in-all the market chopped sideways. What's extremely odd is the spread in cash hog prices. Did you see the $21 spread from the highest offer to the lowest offer? Pork cutouts totaled 313.72 loads with 283.10 loads of pork cuts and 30.62 loads of trim. Pork cutout values: up $2.14, $94.60. Wednesday's slaughter is estimated at 475,000 head -- 18,000 head more than a week ago and 18,000 head less than a year ago. Tuesday's hog slaughter was revised to 471,000 head -- 5,000 head less than what was originally stated. The CME Lean Hog Index 1/24/2022: up $0.13, $78.45.

THURSDAY'S CASH HOG CALL: Steady. With that wide $21 spread in the cash market, it's likely one of the ends tightens up and narrows the price spread. But with processing speeds lagging, it is unlikely prices see much more upward potential until throughput improves.

Wednesday Midday Livestock Market Summary - Contracts Find Technical Support

GENERAL COMMENTS:

Cattle futures are finally seeing some support from traders after a tough start to the week. Meanwhile, after an exhilarating day of trade , Tuesday, the lean hog complex is chopping sideways. March corn is up 3/4 cent per bushel and March soybean meal is up $7.70. The Dow Jones Industrial Average is up 363.84 points and NASDAQ is up 329.68 points.

LIVE CATTLE:

Boxed beef prices are pulling back for the second day in a row, which points to the conclusion that boxes are topping. As packers take note of the boxed beef market, they've also cut into the cash market and been able to buy cattle in Kansas for $136, which is $1.00 lower than Tuesday's trade and $1.00 lower than last week's average. Throughout the week Southern live cattle have traded at mostly $137 and Northern dressed trade has taken place at $218. While it's frustrating to see the lower trend in the cash market, hopefully the support that's building in Wednesday's futures complex keeps the market from dipping much lower. February live cattle are up $0.90 at $138.00, April live cattle are up $1.70 at $141.80 and June live cattle are up $1.47 at $136.90. It's likely boxes will indeed close lower by the afternoon, which will be important to monitor. But equally as important is noting how the day's slaughter performs. The pullback in boxes is normal for this time of year.

The Fed Cattle Exchange Auction listed a total of 2,904 head (Texas 1,438 head, Kansas 987 head, Iowa 203 head, Nebraska 120 head, Oklahoma 121 head, California 35 head), all of which went unsold, as they did not meet the reserve prices, which ranged from $130 to $138.50. Opening prices ranged from $125 to $136.50, high bids ranged from $130 to $138.50. Another auction is scheduled for Thursday.

Boxed beef prices are lower: choice down $0.88 ($291.50) and select down $1.23 ($282.09) with a movement of 73 loads (44.99 loads of choice, 8.59 loads of select, 5.03 loads of trim and 14.35 loads of ground beef).

FEEDER CATTLE:

After dropping below the 100-day moving average in the March contract, the feeder cattle contract seems to be finding support. Even though the corn market is posting a mild rally, the entire feeder cattle complex is trading higher. March feeders are up $1.05 at $160.90, April feeders are up $0.80 at $166.00 and May feeders are up $0.62 at $169.82. It's helping that the live cattle market is also trading confidently into Wednesday afternoon. And even though the cash cattle market is only trading steady with last week, it does come as a sigh of relief to see processing speeds inching higher to 118,000 head.

LEAN HOGS:

After an exciting rally earlier in the week, the lean hog complex is chopping sideways through Wednesday's trade. February lean hogs are down $0.45 at $87.00, April lean hogs are down $0.92 at $96.30 and June lean hogs are down $0.15 at $106.42. After an exhilarating day of stronger trade and then hearing the news that Prop 12 rules won't be enforced until six months after the rules are finalized, the lean hog market seems to be coasting through Wednesday and catching its breath.

The projected CME Lean Hog Index for 1/25/2022 is up $0.75 at $79.20 and the actual index for 1/24/2022 is up $0.13 at $78.45. Hog prices are higher on the National Direct Morning Hog Report, up $1.56 with a weighted average of $62.81, ranging from $61.00 to $77.00 on 2,765 head and a five-day rolling average of $61.48. Pork cutouts total 177.85 loads with 164.18 loads of pork cuts and 13.67 loads of trim. Pork cutout values: up $3.42, $95.88.

Wednesday Morning Livestock Market Update - Slaughter Pace Impacts Prices

GENERAL COMMENTS:

As much as many hope cattle futures will find a bottom, it remains elusive. Prices did not suffer the losses that that feeder cattle did, but they failed to attract strong buyer interest. Boxed beef prices declined with choice down $1.12 and select down $1.47. As expected, feedlots wanted to sell cattle and when packers floated steady bids, they took them. Limited trade took place in the South at $137 and in the North at $218. Cash activity was not widespread, but it could have been. Steady cash may be as good as it gets now that packers see that steady prices may get the job done and then some as packers continue to purchase for immediate slaughter and future delivery.

There is nothing stopping the hog market. It was rising on its own demand and tightening supplies. Then, Prop 12 came back into the limelight with a court in California suspending the enforcement of the law, which moves the enforcement of it back at least six months. Depending on what the Supreme Court decides, it may never be fully enforced, leaving business as usual. Traders seems to have anticipated this as hogs have been in a strong uptrend since shortly after the beginning of the year. Cash was strong yesterday with the National Direct Afternoon report price up $6.44. It was not surprising to see cutouts down again posting a loss of $3.20. Cutout prices have been very choppy for some time making it difficult to predict. Slaughter pace seems to be picking up significantly.

	BULL SIDE		BEAR SIDE
1)	It appears cash cattle may be no worse than steady this week as increased slaughter has packers needing cattle.	1)	Cash cattle began trading already Tuesday, which is never a good sign for cash potential. It sets the stage for the rest of the week.
2)	Both live and feeder cattle have chart gaps above the market that will be filled at some point.	2)	Corn price keeps on trending higher, increasing the cost of feeding cattle. This leaves feedlots more willing to move cattle rather than hold onto them and lose more money.
3)	Strong cash indicates good demand and the need for packers to procure hogs for increasing slaughter pace to meet that demand.	3)	Hog future may have risen too high, too fast and could face a price correction soon. This could trigger heavy selling.
4)	The implementation of Prop 12 has been delayed, keeping pork moving to California without difficulty.	4)	The delay of Prop 12 may not result in increased demand. It may keep demand steady. A market pushed by emotion generally corrects to get in line with fundamentals.

Tuesday Closing Livestock Market Update - Pork Cuts, Boxed Beef Prices Tip Lower

GENERAL COMMENTS:

It was a split day for the marketplace as cattle futures closed mostly lower, but the lean hog market continued to demand support and kept trading higher. A California judge ruled that Prop 12 enforcement should be halted on sales of pork, which helped boost the lean hog market's spirits and aided in the higher close. Hog prices closed higher on the National Direct Afternoon Hog Report, up $6.44 with a weighted average of $72.13 on 9,755 head. March corn is down 1 cent per bushel and March soybean meal is down $1.90. The Dow Jones Industrial Average is down 66.77 points and NASDAQ is down 315.83 points.

LIVE CATTLE:

I was rooting for the cash cattle market to wait to trade until at least Wednesday, but some early trade broke loose and both live and dressed cattle traded steady with last week's market. Southern live deals were marked at $137 and Northern dressed cattle were sold at $218, both fully steady with last week's market. Tuesday's trade was only a light sampling, so come Wednesday the market fully expects more cattle to trade. It's likely Wednesday will see cattle trade for steady prices as the futures market isn't granting the complex any supportive favors. Also, with boxed beef prices cooling off, the market will likely trade steady. February live cattle closed $0.77 higher at $137.10, April live cattle closed $0.02 higher at $140.10 and June live cattle closed $0.15 lower at $135.42. 

The market did see a positive step made in terms of processing speeds as Tuesday's slaughter is estimated at 118,000 head. The more progress that can be made on throughput the better as feedlots are starting to grow wary about currentness. Tuesday's slaughter is estimated at 118,000 head -- 1,000 head more than a week and year ago.

Boxed beef prices closed lower: choice down $1.12 ($292.38) and select down $1.47 ($283.32) with a movement of 143 loads (95.70 loads of choice, 13.58 loads of select, 13.38 loads of trim and 20.32 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL: Steady. Given that cattle have sold in both the North and the South, prices will likely trend steady with the week's tone.

FEEDER CATTLE:

The corn market closed higher, but the deferred contracts walked away with the bigger gains and nearby contracts traded only $0.01 to $0.03 higher. Still, the jump in corn prices and the weaker undertones in the cattle market all aided in the feeder cattle contracts demise by Tuesday's close. March feeders closed $1.40 lower at $159.85, April feeders closed $1.10 lower at $165.27 and May feeders closed $1.12 lower at $169.20. It's unlikely the feeder cattle market will see much support from either the technical or fundamental side of the market as external influences remain unfriendly to the market's success. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, compared to last week on a run of 12,274 head, feeder steers and heifers traded $3.00 to $5.00 lower. Steer calves traded unevenly steady and heifer calves traded $3.00 to $5.00 lower. Continued cold and dry conditions across the region have many of the cattle coming to the market in thin condition. The CME Feeder Cattle Index 1/24/2022: down $0.69, $159.77.

LEAN HOGS:

The lean hog market continued its upward climb Tuesday on continued support in the cash hog market and a California court halted the enforcement of Prop 12, which moves back the enforcement of the law by six months once the rules are finalized. The Supreme Court's next conference is scheduled for Feb. 18. The entire lean hog complex rallied throughout Tuesday, but it wasn't only the deferred contracts that saw immense support, but also the nearby contracts. February lean hogs closed $1.12 higher at $87.45, April lean hogs closed $1.92 higher at $97.25 and June lean hogs closed $0.62 higher $106.57. Pork cutouts totaled 347.08 loads with 311.70 loads of pork cuts and 35.39 loads of trim. Pork cutout values: down $3.20, $92.46. Tuesday's slaughter is estimated at 476,000 head -- 8,000 head more than a week ago and 27,000 head more than a year ago. Monday's hog slaughter was revised to 448,000 head -- which is 7,000 head less than what was originally stated. The CME Lean Hog Index 1/21/2022: up $0.81, $78.32.

WEDNESDAY'S CASH HOG CALL: Higher. With the findings on the Prop 12 legislation, the cash market could see more interest in Wednesday's market as packers look to procure all the hogs the market can stomach.

Tuesday Midday Livestock Market Summary - Meat Prices Show Topping Signs

GENERAL COMMENTS:

Tuesday's market has shown a dip in both boxed beef and pork cutout prices. The market could grow stronger before the day's end, but it's not unlikely that prices are peaking. March corn is up 8 cents per bushel and March soybean meal is down $0.30. The Dow Jones Industrial Average is down 293.66 points and NASDAQ is down 367.24 points.

LIVE CATTLE:

Historically speaking, the boxed beef market has rallied into the first two to three weeks of January as retailers restock their coolers. But as February approaches the market levels out. That's exactly what we are seeing in Tuesday's beef market. February live cattle are up $0.17 at $136.50, April live cattle are down $0.35 at $139.75 and June live cattle are down $0.22 at $135.35. The big concern is how much will boxed beef prices dip? Wanting the product to be more affordable for customers is a valid plea. But on the same token, if boxed beef prices dip too much, many packers may opt to run slow processing speeds, which would drastically hinder the market's ability to fully capture a spring rally. There's been a little bit of cash cattle trade in the South at $137, which is fully steady with last week's trad; but largely the market has yet to be tested and it is likely cash cattle wait to trade until Wednesday.

Asking prices are noted in the South at $138 and the North has yet to signal what they're hoping to get.

Boxed beef prices are lower: choice down $0.16 ($293.34) and select down $0.14 ($284.65) with a movement of 84 loads (52.02 loads of choice, 8.50 loads of select, 7.31 loads of trim and 15.80 loads of ground beef).

FEEDER CATTLE:

With the corn market trading comfortably in the $6.20 per bushel range, the feeder cattle complex is nauseous. If feeders were trading substantially higher, the market could stomach the cost of these higher inputs. But making cattle pencil in today's market takes a crafty mind and one who likes to look risk right in the eye. January feeders are down $0.07 at $158.40, March feeders are down $2.15 at $159.10 and April feeders are down $1.75 at $164.62.

LEAN HOGS:

Even with the morning cash trade and morning pork cutout values showing some weakness, the lean hog futures are rallying into Tuesday afternoon. February lean hogs are up $0.87 at $87.20, April lean hogs are up $1.55 at $96.87 and June lean hogs are up $0.72 at $106.67. The market is still rallying on the excitement of what could come. With African swine fever plaguing numerous foreign countries, the U.S. market is crossing its fingers that export opportunities will only get more and more plentiful.

The projected CME Lean Hog Index for 1/21/2022 is up $0.81 at $78.32 and the actual index for 1/20/2022 is up $0.72 at $77.51. Hog prices are lower on the National Direct Morning Hog Report, down $0.56 with a weighted average of $61.25, ranging from $60.00 to $75.00 on 2,650 head and a five-day rolling average of $64.82. Pork cutouts total 204.20 loads with 184.07 loads of pork cuts and 20.13 loads of trim. Pork cutout values: down $0.12, $95.54.

Tuesday Morning Livestock Market Update - Cattle Continue to Struggle

GENERAL COMMENTS:

The cattle complex gapped lower at the open and did not look back. The positive aspect was that live cattle futures closed about a $1.00 off their lows, with feeder cattle about $2.00 off their lows. Futures moved as expected in reaction to the Cattle of Feed report, which showed higher numbers than expected and the third consecutive month of higher placements. With more cattle and higher weights, it will take some time for these to work through the system. There were no bids or offers placed Monday, providing no indication of potential cash for the week. Boxed beef continued higher with choice up $1.09 and select up $2.46. The Commitment of Traders report showed funds as net buyers of 236 contracts bringing their net long positions to 62,177 contracts.

Hogs continued to roll higher for contracts in the first half of the year. Spread trading was evident with the June contract the recipient of the greatest buying interest. This pushed futures over $106 for a time but ended up closing just shy of the level at $105.95. The combination of $3.00 higher cash on the National Direct Afternoon report and cutouts increasing $2.37, kept support under the market through the first half of the year. Packers being aggressive at the beginning of the week bodes well for cash today as good demand and increasing slaughter pace needs to be satisfied. The Commitment of Traders report showed funds as net sellers of 9 contracts bringing their net long positions to 48,795 contracts.

	BULL SIDE		BEAR SIDE
1)	All live cattle and feeder cattle contracts left a gap on the open that will be closed at some point.	1)	The cattle complex may struggle for a while as it deals with higher placements and higher weights.
2)	Cattle futures rebounded significantly from their lows possible, indicating the market has the report already factored in.	2)	Packers are not expected to be very aggressive with their bids this week. Feedlots will want to move cattle as grain prices continue to increase.
3)	Strong cash at the beginning of the week is a good sign that packers need hogs sooner rather than later. Increasing slaughter pace requires more hogs with packers aggressively looking for supply.	3)	Hog futures are overbought and ripe for a price retracement.
4)	Technical traders are not shy about buying into an overbought market feeling any weakness will be short lived.	4)	Cumulative pork export sales for far for 2022 are running significantly below last year and 2020. China has been more interested in purchasing beef rather than pork.

Monday Closing Livestock Market Update - Cattle Trade Sheepishly

GENERAL COMMENTS:

It was a tough day for the cattle contracts, as the market absorbed Friday's USDA Cattle on Feed report and tried to make sense of the spike in placements all while battling a weaker-toned market throughout the rest of the sector. Meanwhile, the lean hog complex rallied higher as excellent meat demand is helping push the complex higher and higher. Hog prices are higher on the National Direct Afternoon Hog Report, up $3, with a weighted average of $65.69 on 4,065 head. March corn was up 4 3/4 cents per bushel, and March soybean meal was up $1.20. The Dow Jones Industrial Average was up 99.13 points, and the NASDAQ was up 86.21 points.

LIVE CATTLE:

Much like Dorothy, the Tin Man and the Scarecrow chanted "Lions and tigers bears, oh my!" as they warily skipped down the Yellow Brick Road, feedlots are chanting "Weak through-put and heavier carcass weights and a doubtful cash cattle market, oh my!" as they keep a wary eye on the current cattle market. There's been dark cloud hanging over the live cattle market ever since the dawn of 2022, and cattlemen are growing worried about how the market will fare during its attempt at a spring rally. Thankfully, processing speeds are showing improvement, but just maintaining currentness is a dire concern for feedlots, as they don't want to have just an average rally this spring -- they were hoping for a real chance at driving prices well above $140.

Monday's market traded weaker throughout the day, and February, April and June contracts all either closed below their 100-day moving averages or came extremely close to doing so. February live cattle closed $1.60 lower at $136.32, April live cattle closed $2.02 lower at $140.07, and June live cattle closed $1.72 lower at $135.57. The cash cattle market didn't see any interest, and it's likely that trade holds off until after Wednesday. 

Monday's slaughter is estimated at 115,000 head -- 2,000 head more than a week ago and down 1,000 head from a year ago.

Boxed beef prices closed higher: choice up $1.09 ($293.50) and select up $2.46 ($284.79) with a movement of 80 loads (58.51 loads of choice, 9.53 loads of select, 3.45 loads of trim and 8.59 loads of ground beef).

TUESDAY'S CASH CATTLE CALL: Steady to somewhat weaker. Given that processing speeds still aren't back to full capacity, packers will likely try to push the market lower again this week.

FEEDER CATTLE:

Following the weaker tone of the cattle complex and the corn market's slightly higher close, the feeder cattle contracts kept with their lower plummet throughout the day. January feeders closed $1.80 lower at $158.47, March feeders closed $2.05 lower at $161.25 and April feeders closed $1.75 lower at $166.37. The market's lower push drove both the January and March contracts to close below the 100-day moving average. At West Point Livestock Auction in West Point, Nebraska, compared to last week, on a run of 2,290 head, feeder steers weighing less than 500 pounds sold $5 to $6 higher, while those weighing more than 500 pounds traded steady to $2 higher. Feeder heifers weighing less than 600 pounds sold steady to $5 higher, and those weighing more than 600 pounds traded $2 to $4 lower. The CME feeder cattle index 1/21/2022: not available at this time.

LEAN HOGS:

Early in Monday's trade, the lean hog contracts were faced with some modest pushback, but as the noon hour approached, the market grew stronger and stronger and, ultimately, the nearby contracts closed higher before the day's end. February lean hogs closed $0.12 higher at $86.32, April lean hogs closed $0.37 higher at $95.32, and June lean hogs closed $1.17 higher at $105.95. The jump in pork cutout prices continues to help spur on the momentum throughout the futures market and could aid in supporting this rally for a healthy stint of time. The biggest jumps in Monday's pork cutout market were seen in the picnic ham prices (up $7.77) and in the bellies (up $10.71). Pork cutouts total 342.46 loads with 304.65 loads of pork cuts and 37.81 loads of trim. Pork cutout values: up $2.37, $95.66. Monday's slaughter is estimated at 455,000 head -- 60,000 head more than a week ago and 34,000 head less than a year ago. The CME lean hog index 1/20/2022: up $0.71, $77.51.

TUESDAY'S CASH HOG CALL: Higher. With processing speeds higher than a week ago and pork cutout values still growing stronger -- it wouldn't be surprising to see packers aggressively buying more hogs.

Monday Midday Livestock Market Update - Hogs Look for Continued Support While Cattle Veer Lower

GENERAL COMMENTS:

The livestock complex is a mixed bag heading into Monday afternoon. Lean hog futures are partly keeping with last week's rally, but the cattle futures are trending lower as the market frets over last week's Cattle on Feed report. March corn is down 1 1/4 cents per bushel and March soybean meal is down $2.10. The Dow Jones Industrial Average is down 975.42 points and NASDAQ is down 593.98 points.

LIVE CATTLE:

Live cattle futures are taking a jolting ride to lower prices as the market reacts emotionally to Friday's Cattle on Feed report. February live cattle are down $2.10 at $135.82, April live cattle are down $2.80 at $139.30 and June live cattle are down $2.40 at $134.90. If feedlots get anxious and sell early this week, packers are undoubtedly going to push for lower prices. But if feedlots can stand united and push trade to the latter half of the week, the market stands a better chance at trading steady to potentially higher. The Cattle on Feed report may have your spirits weakened as a 6% jump in placements seems unmanageable -- but remember that given the year producers have face, where else were the cattle supposed to go? Thankfully, the market saw the lighter weight feeders more heavily placed than heavier cattle, which means those cattle won't be marketed until summer, so the spring rally won't be oversupplied. New showlists appear to be mixed: higher in Kansas, but lower in Texas, Nebraska and Colorado.

The majority of business took place on Tuesday and Wednesday last week, with just a little scattered trade on both Thursday and Friday. Northern dressed deals had a range of $217 to $218, mostly $218, generally steady with the prior week's weighted averages, a good many of these cattle are set for delivery in the weeks of Jan. 31 and Feb. 7. Southern live trade had a full range of $135.50 to $137, mostly $137, $1 to $1.50 higher than the previous week's weighted averages.

Last week's negotiated cash cattle trade totaled 74,145 head. Of that 72% (53,164 head) were committed for nearby delivery, while the remaining 28% (20,981 head) sold for deferred delivery.

Boxed beef prices are higher: choice up $0.35 ($292.76) and select up $1.69 ($284.02) with a movement of 26 loads (17.93 loads of choice, 4.39 loads of select, 0.02 loads of trim and 3.80 loads of ground beef).

FEEDER CATTLE:

With the live cattle complex trending lower and placements already taking up a large majority of feed bunk space, the feeder cattle complex is trending in a worried fashion. January feeders are down $2.00 at $158.27, March feeders are down $4.47 at $158.82 and April feeders are down $3.77 at $164.40. Adding to the market's disgruntled attitude is the fact that nearby corn prices are still trading well above $6.00 a bushel. So it wouldn't be surprising to see feeder cattle buyers hesitant in sale barns early this week.

LEAN HOGS:

After a long period of hem-hawing around and wondering whether the market should keep with last week's robust rally, lean hog futures have begun to trade mildly higher in the nearby contracts. February lean hogs are up $0.35 at $86.55, April lean hogs are down $0.07 at $94.92 and June lean hogs are up $0.45 at $105.25. With the cash market seeing support, and with pork cutout values seeing interest at midday, traders are hopeful the market will continue to see demand and keep with its quest of higher prices.

The projected CME Lean Hog Index for 1/20/2022 is up $0.72 at $77.51 and the actual index for 1/19/2022 is down $0.06 at $76.79. Hog prices are higher on the National Direct Morning Hog Report, up $1.36 with a weighted average of $61.81, ranging from $60.00 to $75.00 on 2,405 head and a five-day rolling average of $65.44. Pork cutouts total 210.15 loads with 182.67 loads of pork cuts and 27.48 loads of trim. Pork cutout values: up $8.89, $102.18

Monday Morning Livestock Market Update - Cattle Expected Lower

GENERAL COMMENTS:

The Cattle on Feed report was bearish all the way around. On feed numbers were 1% higher than a year ago and above expectation for slightly lower numbers. Placements were significantly bearish as 6% more cattle were placed in feedlots in December than a year ago. This was over 4% more than the average trade estimate. Marketings were even with last year but about 1% below the trade estimate. This has been the subject of much discussion over the weekend with some disbelief as to the numbers but also some ideas as to why placements were large. Either way you look at it, there are more cattle on feed and placed in feedlots than expected. These cattle will need to be worked through the system. This may be a tall order in the near term as slaughter pace remains lower than desired. This has not likely already been factored in the market leaving it vulnerable to further liquidation. Beef exports sales were an improvement at 12,800 mt but may not be enough to offset the implications of the report. Boxed beef took a breather Friday with choice down $0.57 while select gained $0.15. Futures are expected to struggle to begin the week.

Hog futures are on a tear with traders very aggressive. Stronger cash indicates packers are willing to pay more for available hogs. Even though slaughter pace has been less than desired, hogs have not backed up in the market. Cutouts were up $1.05 on Friday indicating strong demand. Weekly export sales were very good at 38,700 mt. April through August futures contracts made new highs again with June and July nearing $105. Hog slaughter is showing signs of increasing, which should also provide support to the market as packers will need to increase their purchases. Traders may begin the week with some caution waiting for indication of packer aggressiveness.

	BULL SIDE		BEAR SIDE
1)	Cattle supplies are expected to tighten over time. The slight backup of cattle and higher weights will need to be worked through.	1)	The Cattle of Feed report was not supportive to the market over the near term. There will be a lot of cattle to work through over the next months.
2)	Improving slaughter pace could keep packers more aggressive bidding no less than steady cash.	2)	Packers may bid lower cash this week, especially since they see plentiful cattle supplies.
3)	The trend is up in hog futures keeping traders actively purchasing.	3)	Hog futures cannot go up forever. With futures overbought, it is ripe for a price retracement.
4)	Large export sales even without China buying indicates strong demand for pork internationally. This is coming at a time when pork supply is tightening.	4)	April hog futures have a chart gap remaining $9.00 below the market. These gaps generally are filled before the end of the contract.

Friday Closing Livestock Market Update - Lean Hogs Push to New Highs

GENERAL COMMENTS:

Lower U.S. hog inventories in 2021 plus Friday's report of 38,700 metric tons (mt) of pork export sales for last week were enough to send hog futures to new high ground Friday, even to new contract highs for April and June contracts. Meanwhile, live cattle futures did well to finish the day with modest losses, staying mostly neutral in a week that had a lot of bearish headwinds for cattle. March feeder cattle did not hold up as well, closing down $1.65 Friday and ending down $3.07 on the week.

From Friday to Friday livestock futures scored the following changes: February live cattle up $0.05, April live cattle down $0.02; January feeder cattle down $2.42, March feeder cattle down $3.07; February lean hogs up $5.30, April lean hogs up $6.50.

LIVE CATTLE:

For anyone looking at the news this week, there were plenty of reasons for cattle to trade lower. U.S. stocks fell lower with ongoing concerns about higher interest rates in 2022, along with some disappointing earnings reports. U.S. cases of coronavirus remain far above levels seen previous to this winter and are limiting cattle slaughter. Crops in southern Brazil and Argentina finally received some rain this week, but corn prices jumped higher anyway with traders concerned about Russian troops on Ukraine's border. In spite of all the bearish news, February live cattle closed down 40 cents at $137.92 Friday and was up a nickel on the week. It is also impressive that February cattle prices continue to hold above support at $136, the site of their 100-day average. The April and June contracts were down $1.07 each on Friday but remain above their recent levels of support.

The best we can say on cattle prices' behalf is that it appears the market was encouraged by this week's slight increases in the daily slaughter pace and remains optimistic about returning to higher levels soon. Unless there is some unexpected surprise late Friday, this week's cash trade took place at mostly $137 in the South and $218 in the North. Northern trades were roughly steady with a week ago, but also included trades for early February, when slaughter may be even higher. Friday morning's report from USDA showing 12,800 mt of beef export sales last week was not especially impressive, but it was interesting China was the top buyer, taking 3,900 mt. USDA estimated Friday's slaughter at 114,000, up from 113,000 a week ago. Saturday's slaughter was estimated at 61,000, up from 50,000 last week. For the week, cattle slaughter was estimated at 636,000, up from 618,000 last week. 

Boxed beef prices have been gradually increasing since mid-December and posted another higher week. Choice boxed beef finished at $292.41, up $8.10 from a week ago. Selects ended at $282.33, up $8.36 from a week ago.

After Friday's close, USDA said 12.037 million head of cattle were on feed as of Jan. 1, 2022, more than expected and up 1% from a year ago. It was also the second highest Jan. 1 inventory on record. December placements were up 6% from a year ago, more than expected and the most since the series began in 1996. Marketings were only slightly higher than a year ago and the second highest for December on record. While the report is bearish for Monday's prices, it is worth noting the placement weights fell in categories that were generally lower than a year ago, so deferred contracts may absorb more of the bearish pressure.

MONDAY'S CASH CATTLE CALL: $1.00 to $2.00 lower. An early bearish response to Friday's on-feed report could moderate by the end of the session.

FEEDER CATTLE:

It is fair to say the bearish news mentioned above did have more of a price impact on feeder cattle this week. This week's 20-cent gain in March corn and ongoing concerns that cattle are gaining weight, while the slaughter pace has slowed, are two of this week's stronger bearish concerns. March feeder cattle closed down $1.65 at $163.30 but did manage to hold above its 100-day average at $162.70. The January feeder contract expires Thursday, Jan. 27 and closed down $0.90 at $160.27, below the CME Feeder Cattle Index, posted at $161.20 on Wednesday. The more forward looking May feeder contract was down 80 cents on the week, but continues to project a more bullish future, ending at $171.92.

LEAN HOGS:

After a nearly six-month decline in cash hog prices that took the Swine Formula Base to a low of $68.83 at Thanksgiving, hog futures prices have turned sharply higher and are having some success in pulling cash prices higher as well. February hogs closed up $1.27 Friday, finishing the week up $5.30 at a new three-month high of $86.20. April and June contracts were even more impressive posting weekly gains of $6.50 and $4.87 as both closed at new contract highs of $94.95 in April and $104.77 in June.

USDA's Daily Direct Hog Report for Friday afternoon showed the Swine Formula base at $77.71 with a head count of 164,156, up $1.65 on the week. The negotiated weighted average ended at $62.69 with a head count of just 3,716. Helping to add to the bullish scenario for hogs, USDA said early Friday that 38,700 mt of pork were sold for export last week with Japan taking over half of the total. USDA also showed bullish influence from the retail sector. Pork cutouts were up $1.05 Friday at $93.29 on 242.78 loads. Butts and hams showed the largest gains of just over $8.00 each. For the week, pork cutouts were up $4.22, chopping higher since Thanksgiving. Similar to cattle, hog slaughter has also slowed lately, but was estimated at 445,000 for Friday, up from 422,000 a week ago. Saturday's slaughter is estimated at 218,000, up from 149,000 last week. For the entire week, USDA estimated 2.44 million head of hogs slaughtered, up from 2.366 million a week earlier. New U.S. cases of coronavirus are down from their recent peak in early January and may be subsiding, but it is too early to be confident.

MONDAY'S CASH HOG CALL: Steady. After Friday's upward surge in hog futures, the tone is clearly bullish, but a quieter Monday to start the week would not be a surprise.

Friday Midday Livestock Market Summary - Cattle Futures Sag Lower; Hogs Push New Highs

GENERAL COMMENTS:

Most of Friday's commodity board was painted red, including the active futures contracts of live cattle and feeder cattle. It has been a fairly quiet week for cattle on the futures board as markets are cautious about the lower slaughter pace and this week's higher corn prices. Hog prices are having a much more bullish week, supported by low inventories and a good week of pork export sales reported Friday morning. March corn is up 3 cents per bushel and March soybean meal is down $8.20. The Dow Jones Industrial Average is down 60 points and NASDAQ is down 92 points.

LIVE CATTLE:

Cattle contracts started lower Friday and have kept a low profile during the four-day week, following Martin Luther King Jr. Day. February live cattle are down $0.45 at $137.87, April live cattle are down $0.97 at $142.20 and June live cattle are down $0.85 at $137.52. This week's cash cattle trade was mostly seen at $137 in the South, up $1.00 to $1.50 from last week's weighted averages. In the North, trades have been mostly steady, near $218. If there is light trade remaining Friday, we haven't seen it yet.

Thursday's carcass weights were steady for steers at 928 pounds and four pounds lower for heifers at 851 pounds. Steer weights are up 16 pounds from a year ago and present some concern during this time of high coronavirus cases and lower slaughter rates. Thursday's slaughter did show some improvement however, estimated by USDA at 116,000 -- up from 114,000 the previous week. 

Friday morning's choice boxed beef prices were down $0.26 at $292.72 and selects were up $0.49 at $282.67 with 46 total loads. Boxed prices are on track for gains of roughly $8 to $9 from last Friday, continuing to climb higher since mid-December.

FEEDER CATTLE:

March feeders are down $1.35 at $163.60 and the January contract is down $0.60 at $160.57, set to expire Thursday, Jan. 27. Wednesday's CME Feeder Index was listed at $161.20. With dry weather concerns in South America and the conflict in Ukraine giving corn prices a boost this week, feeder cattle appear to be headed for a lower close, both for Friday and for the week. This week's lower stock market and ongoing concerns about the slower pace of cattle slaughter backing up cattle are also not helping feeder prices. With so many bearish headwinds this week, it says something about underlying demand to see March feeder cattle still holding above their 100-day average at $162.80.

LEAN HOGS:

February lean hogs are up $1.32 at $86.25, April lean hogs are up $1.20 at $95.20 and June lean hogs are up $1.12 at $104.95. Futures prices continue to look much more bullish than cash with the April and June contracts on track to finish the week with new contract highs. The projected CME Lean Hog Index for Thursday, Jan. 20 is $77.51, up from the actual index of $76.79 for Wednesday. Friday morning's Pork Market Formula price from USDA's morning hog report showed a weighted average price of $78.80 with a head count of 112,085, steady with Thursday morning's price. The negotiated weighted average was at $60.45 with a head count of 2,865, down from $61.14 Thursday. Overall, cash hog prices bottomed near Thanksgiving and have been slowly increasing since, following the bullish trail of much higher futures prices. USDA's morning report showed pork cutouts up $8.05 at $100.29 on 132.06 loads. Bellies, hams and butts were the popular cuts pushing the carcass value higher. If Friday morning's values hold, pork cutouts would be up roughly $11 on the week.