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.
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