GENERAL COMMENTS:
The cattle contracts are delighted to see the corn market's regression, and both the live cattle and feeder cattle contracts are rallying into Thursday afternoon. Upon seeing China from Thursday's export report, the lean hog market isn't as impressed with the day and is trending lower. March corn is down 10 1/2 cents per bushel, and March soybean meal is down $9.10. The Dow Jones Industrial Average is up 14.66 points, and the NASDAQ is down 231.37 points.
LIVE CATTLE:
It's too bad that the cash cattle market already saw the market trade, as it would have stood a better chance of selling cattle steady come Thursday when the board was trading higher. February live cattle are up $0.22 at $136.80, April live cattle are up $0.20 at $140.72, and June live cattle are up $0.30 at $136.55. The cash cattle market has yet to see any renewed interest, and given that processing speeds aren't back to full capacity, packers could be essentially done trading for the week. Southern business this week has ranged from $134 to $137, mostly $136 to $137, steady to generally $2 lower than last week's weighted averages. Northern dressed trade has been at mostly $218, $2 lower than last week's weighted average basis Nebraska.
Beef net sales for 2022 market year, which began Jan. 1, totaled 9,700 metric tons (mt) primarily for Japan (2,600 mt), Mexico (1,400 mt) and South Korea (1,400 mt).
The Fed Cattle Exchange Auction listed a total of 2,350 head, of which none actually sold, 197 head were scratched from the auction and 2,153 head were listed as unsold, as they did not meet the reserve prices, which ranged from $125 to $138. Opening prices ranged from $120 to $135 and high bids ranged from $134 to $136. The state-by-state breakdown looks like this: TX 1,128 total head, all of which went unsold; KS 983 total head, all of which went unsold; CA 42 total head, all of which unsold; OK OK 197 total head, all of which were scratched from the auction.
Boxed beef prices are higher: choice up $1.88 ($281.81) and select up $1.35 ($272.33) with a movement of 77 loads (39.92 loads of choice, 7.88 loads of select, 14.33 loads of trim and 15.16 loads of ground beef).
FEEDER CATTLE:With the corn market retreating after seeing Wednesday's WASDE report, the feeder cattle contracts are rallying amid phenomenal buyer interest in the countryside and upon the relief of waning corn prices (for the time being anyway). January feeders are up $0.37 at $162.25, March feeders are up $0.85 at $165.87 and April feeders are up $1.05 at $169.82. The further you look into 2022, the market gets more and more excited to lift the live cattle and feeder cattle contracts position, which looks incredibly exciting for country feeders and feedlots.
LEAN HOGS:Shortly after the holiday run, retails try to gauge what demand is going to be like in the weeks ahead and begin to slowly restock their coolers. Amid the reduction in processing speeds, pork cutout values (and boxed beef values) have grown as the retail sector yearns for product. We know not to put the cart ahead of the horse, but a $15.05 jump in pork cutout values is hard not to talk about. With cash hog prices up again even though processing speeds aren't back to full bore, it wouldn't be surprising to see the afternoon's cutout value stronger -- but the real question is how much stronger will it be? The lean hog contracts aren't very lively following Wednesday's less-than-thrilling WASDE report, and upon not seeing China again in the export report. February lean hogs are down $1.25 at $77.60, April lean hogs are down $0.22 at $85.12 and June lean hogs are down $0.15 at $97.60.
The projected lean hog index for 1/12/2022 is up $0.46 at $74.60, and the actual index for 1/11/2022 is down $0.07 at $75.06. Hog prices are higher on the National Direct Morning Hog Report, up $0.53 with a weighted average of $65.28, ranging from $62 to $71 on 4,793 head and a five-day rolling average of $65.08. Pork cutouts total 184.34 loads with 165.00 loads of pork cuts and 19.34 loads of trim. Pork cutout values: up $15.05, $99.51.
Pork new sales for 2022, which began on the Jan. 1, totaled 19,800 mt primarily for Mexico (10,100 mt), Japan (3,100 mt) and South Korea (2,100 mt).
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