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.
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