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.
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