GENERAL COMMENTS:
Heading into Wednesday, keeping an eye on slaughter speeds remains incredibly important as Tuesday's speeds were stronger. Hog prices closed $4.08 higher on the National Direct Afternoon Hog Report, with a weighted average of $66.19 on 5,175 head. March corn is up 3 1/4 cents per bushel and March soybean meal is down $15.50. The Dow Jones Industrial Average is down 543.34 points and NASDAQ is down 386.85 points.
LIVE CATTLE:
You may not have liked to see the lower close throughout the futures market, but what stings even more is the fact that cattle were bought in the North with time. Thankfully it was only a small sampling, but some dressed trade was reported in the North for mostly $218 (which is fully steady); but the majority of those cattle were committed for the weeks of Jan. 31 and Feb. 7. There was also some trade in the South at mostly $137, which is $1.00 to $1.50 lower than last week. There are couple of conclusions that can be drawn from this. First, it's too soon to get too excited about Tuesday's slaughter of 117,000 head before we see how the rest of the week performs. While Tuesday did indeed process more cattle than a week ago, Monday's slaughter was just 113,000 head still. But, given that packers are buying cattle for deferred delivery, that could mean they know processing speeds are going to pick back up and they want to pad their position ahead of the cash market gaining momentum. February live cattle closed $0.30 lower at $137.67, April live cattle closed $0.27 lower at $141.85 and June live cattle closed $0.55 lower at $137.07.
Tuesday's slaughter is estimated at 117,000 head -- 3,000 head more than a week ago and 2,000 head less than a year ago. Monday's slaughter is estimated at 113,000 head -- steady with a week ago and 2,000 head more than a year ago.
Boxed beef prices closed higher: choice up $1.63 ($289.49) and select up $1.34 ($278.39) with a movement of 124 loads (68.08 loads of choice, 16.74 loads of select, 12.46 loads of trim and 26.49 loads of ground beef).
WEDNESDAY'S CASH CATTLE CALL: Steady. With processing speeds still in question, it's likely the cash cattle trade is steady.
FEEDER CATTLE:
The feeder cattle contracts rounded out Tuesday fully lower as the futures complex neglected to find any substantial interest technically. Also, nearby corn contracts closed mildly higher, which pushed feeders into continuing their sideways-to-lower chop. The feeder cattle contracts still are optimistic in the deferred months. But the nearby contracts are worried about finding relief amid a hesitant live cattle market. January feeders closed $1.25 lower at $161.45, March feeders closed $0.95 lower at $165.42 and April feeders closed $0.77 lower at $169.57. At Oklahoma National Stockyards in Oklahoma City, Oklahoma, on a run of 15,073 head, compared to a week ago feeder steers and heifers traded steady to $2.00 higher. Steer calves traded steady to $3.00 lower and heifer calves traded steady to $3.00 higher. The CME Feeder Cattle Index 1/17/2022: down $0.41, $161.30.
LEAN HOGS:
The lean hog complex rallied on seeing stronger processing speeds Tuesday and on aggressiveness in the cash market as well. February lean hogs closed $0.70 higher at $81.60, April lean hogs closed $0.82 higher at $89.27 and June lean hogs closed $0.45 higher at $100.35. The market is optimistic that better-than-anticipated export opportunities will come its way as African swine fever continues to be a problem for foreign countries. If Thursday's export report is bullish at all, the market will likely keep its positive tone. Pork cutouts totaled 331.76 loads with 310.05 loads of pork cuts and 21.71 loads of trim. Pork cutout values: down $4.73, $87.21. Tuesday's slaughter is estimated at 468,000 head -- 15,000 head more than a week ago and 29,000 head less than a year ago. Monday's slaughter is estimated at 402,000 head -- 46,000 head less than a week ago and 20,000 head less than a year ago. The CME Lean Hog Index 1/14/2022: down $1.58, $75.90.
WEDNESDAY'S CASH HOG CALL: Steady. A $4.08 jump in the cash market is aggressive! If the market wouldn't have jumped as aggressively on Tuesday, then I'd feel comfortable saying there may be room for more upside as packers see stronger chain speeds and want to move full steam ahead. But with pork cutouts weaker, they may just trade steady come Wednesday.
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