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.
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